VP Bank’s clients
VP Bank Group pursues a clearly defined business strategy, the most important element of which is closeness to its clients. Only those who are really in touch with their clients and know their requirements precisely are in a position to respond appropriately to the latest market developments.
In 2014, VP Bank Group again invested considerable sums in enhancing the quality of client advice and intensifying its market cultivation efforts at all locations. In connection with this focus on target markets and client segments, the “Apollo” project – as previously described in the Strategy Report – was launched in 2014, one of the goals of which was to redefine VP Bank’s various client groups. Distinct service models were developed for each specific group, which in turn facilitate greater client orientation, the optimal deployment of resources and heightened service quality.
A clear specification of the roles involved in client service regulates the interplay between relationship managers and specialists for investment products and services, tax matters, loans, funds and foundations. Within the framework of a holistic advisory approach, each team draws upon competencies at the Group level in order to devise individualised solutions that meet all requirements.
VP Bank Group offers customised portfolio management services and investment advice to private individuals and financial intermediaries. Our staunch adherence to the concept of open architecture means that clients benefit from the “Best manager” approach. Included in our investment recommendations are products and services of other leading financial institutions as well as the Bank’s own investment solutions. The advisory process encompasses each and every phase of a client’s life cycle, a differentiation that makes it possible to provide a precisely tailored range of products and services.
Client satisfaction
VP Bank Group focuses squarely on client satisfaction and service quality. For that reason, the Bank carries out client feedback management activities that include surveys of client satisfaction and regular reporting. Open feedback paths, professional complaint management and a continuous dialogue with clients are evidence of this resolute client orientation.
Within the scope of VP Bank’s customer relationship management efforts, the client advisors compile and regularly evaluate client feedback. Each year, the Bank receives and addresses close to 500 comments from its clients. More than two-thirds of those comments are positive in nature and pertain to the issues of investment advice, performance and client events.
Again in 2014, new measures and concepts for operational excellence were adopted, as already discussed in greater detail in the Strategy Report.
Client satisfaction was also confirmed in the public sphere: Germany’s business and finance journal “Fuchsbriefe” each year examines the quality of advice provided in the areas of private banking and private wealth management. In 2014, VP Bank was rated “Recommendable” and ranks amongst the top providers in the country-specific list.
Business fields and client segments
Through its Private Banking and Intermediaries business units, VP Bank addresses a defined and limited number of target markets and client segments. Private banking services and the intermediaries business are performed at all VP Bank locations. In Liechtenstein and the neighbouring region, this range is supplemented with retail banking services that include client-oriented package solutions.
VP Bank also caters to institutional clients and regional companies in need of capital-spending and operating finance in Liechtenstein and Eastern Switzerland. All these clients benefit from user-friendly, innovative solutions in the areas of e-banking and mobile banking. Youth packages for students and trainees round out the range of services on offer.
New challenges
The way of providing advice in the world of private banking is in transition. Where the primary emphasis in the past was on offering traditional investment advice, i.e. expertise on specific asset classes or individual stocks and bonds, increasing focus is today being placed on regulatory issues (MiFID, FATCA, the automatic exchange of tax information, EMIR, etc.). The advisory process is taking place within the tug of war between an array of new regulatory decrees and the individual investment and wealth objectives of clients.
VP Bank has risen to these challenges. In addition to comprehensive training sessions for client advisors, the Bank’s clients are also being counselled by teams of specialists who contribute, for example, their vast expertise in tax matters to the discussion, thereby demonstrating the overall competence of VP Bank.
Clients have a right to be served by an advisor who has a keen understanding of their requirements and individual circumstances and who can devise solutions that are best suited to the short term as well as the longer run. In 2014, VP Bank paid the utmost attention to that right on the part of intermediaries as well as its private clients. In today’s environment, staying focused on specific client groups and markets is of particular importance – and the client reactions prove that VP Bank is on the right path.
Efficiency in the advisory process
One of VP Bank’s major objectives in 2014 was to achieve a significant increase in efficiency. Various initiatives were launched in this regard:
- Electronic communication: ongoing optimisation of the e-channels as well as e-banking and the mobile banking application
- Development of needs-oriented service packages
- Client onboarding: automation of the client life cycle processes for optimising client-data compilation as well as account administration and balancing, with the goal of affording clients and advisors more time to focus on the essential and less on the formalities
In addition, a new advisory tool was evaluated in 2014. It is aimed at helping the client and the advisor to develop and implement the most suitable investment strategy, whilst also ensuring that all regulatory aspects have been taken into account. The use of this tool facilitates an easier and more transparent discussion with the client and enables better portfolio supervision. The tool is utilised during visits to the Bank as well as at the client’s preferred meeting location.
Crossborder banking
The legal and reputational risks involved in the crossborder financial services business have increased markedly in the recent past. Foreign supervisory authorities are keeping a keen eye on the legal conformity of foreign banks’ crossborder business activities, which include the acquisition, advising and serving of clients located abroad.
As VP Bank Group renders crossborder services, the Bank has regulated those activities in a binding “crossborder policy”. This directive serves as an adequate instrument for recognising, managing and controlling the related legal and compliance risks. It also lays down the principles as well as the ways and means by which the crossborder services and products of the Bank are to be offered. For each of its target countries, VP Bank provides its client advisors with country manuals which describe the local behavioural dos and don’ts from a legal standpoint.
Advisory process
For optimal client care, VP Bank conducts a five-stage advisory process.
1. Win the client
The prerequisites for successful client acquisition are systematic planning, preparation and execution, whereas VP Bank wins most of its new clients as a result of recommendations by existing clients.
2. Understand the client
Understanding the client represents the basis for providing professional advice. The quality and quantity of information received from the client through direct questioning or in written form are decisive factors in the ability to identify the client’s needs and to develop fine-tuned solutions.
3. Advise the client
Once the needs of the client have been determined, the task is to present solutions. In arriving at those solutions, alternatives are always borne in mind. The client is not only shown the solutions that are “the closest fit”, but also sensible possibilities in a broader context. VP Bank Group attaches great value to a team approach in devising solutions. Accordingly, specialists as well as other sources of expertise are included in this process.
4. Implement the client’s wishes
If the client agrees with the presented solution, implementation is the next step. The time taken for translating solutions into reality underscores VP Bank’s performance capabilities and devotion to achieving the exceptional. VP Bank considers it extremely important that the implementation of solutions is conducted in a timely manner or in keeping with agreed milestones that fulfil the expectations of the client.
5. Accompany the client
The advisory process does not merely end upon realisation of an agreed solution. A client profile changes continuously and is augmented to reflect new developments. By periodically comparing the client profile with the effects and performance of a previously agreed solution, genuine added value is generated for the clients.
Investment recommendations
The 2014 investment year followed closely in the footsteps of the previous year. Despite the persistently modest pace of economic growth, increasing geopolitical risks and higher valuations, most investment classes managed to record handsome gains. The lion’s share of those gains was attributable less to economic improvements than to the simple expansion of valuations. The broad-based bull markets were all the more remarkable in light of the fact that the US central bank began to normalise its previously expansive monetary policy.
In their annual outlook for 2014, VP Bank’s investment experts continued to advise maintaining exposure to equities, a strategy that paid off as many major stock indices rose to new all-time highs. However, the recommended cautious stance on government bonds – in anticipation of rising yields – was wide off the mark: a further decline in yields throughout the world caused even the highest-rated government bonds to record enormous price increases. Less surprising, however, were the continuation of the global bull markets and the further strengthening of the US dollar.
Client assets
As at 31 December 2014, VP Bank held client assets under management totalling CHF 30.9 billion (1.8 per cent more than in the previous year). Assets held in custody accounted for an additional CHF 7.6 billion. Total client assets at the close of the year thus amounted to CHF 38.6 billion. In total, VP Bank Group recorded an outflow of CHF 850 million in client assets (previous year: CHF 965 million inflow).
