VP Bank’s clients
VP Bank is an internationally positioned private bank which focuses on providing customised portfolio management services and investment advice as well as financings and investment fund solutions on behalf of sophisticated private clients. Equally spoken, VP Bank also regards itself as an established, reliable partner for financial intermediaries who greatly appreciate the Bank’s modern technological infrastructure and decades of financial market savvy.
Business fields and client segments
Through its Private Banking, Intermediaries and Fund Solutions business divisions, VP Bank addresses a specified, limited number of target markets and client segments. Private banking services and the intermediaries business are performed at all VP Bank locations with bank status. In Liechtenstein and the neighbouring region, this offering is supplemented by retail banking services which include client-oriented package solutions. VP Bank also assists institutional and corporate clients, mainly in Liechtenstein and Eastern Switzerland, by financing their investment and working capital needs.
The clients of VP Bank benefit from user-friendly, innovative solutions in the areas of e-banking and mobile banking. Special account arrangements for youths, trainees and students are also on offer. The banking packages introduced in 2015, which cover the most important banking services associated with savings, debit/credit cards and online banking, are highly appreciated by clients who now benefit from these modern solutions, attractive prices and uncomplicated ways to conduct their banking business.
In the course of VP Bank’s holistic approach to investment advice, our teams can draw on Group-wide competencies and the skills of external partners in order to design bespoke solutions that fulfil all the client’s requirements. In this regard, a clearly defined allocation of the roles involved in client care ensures fine-tuned interaction between our client advisors and specialists in the fields of investment products and services, taxes, credits, funds and legal structures. The importance of interdisciplinary collaboration is steadily increasing as the clients of VP Bank are faced with ever more complex issues.
In 2016, VP Bank Group again invested extensively in enhancing the quality of client care and advice, fine-tuned the product and service offerings for the Bank’s various client segments and markets, as well as adapted its organisational structure to reflect the importance of the Intermediaries business. Our increased client acquisition activities resulted in remarkable successes especially in Asia, Russia, Liechtenstein, Switzerland and Germany.
VP Bank Group focuses squarely on closeness to the client and service quality. As part of the Bank’s feedback management effort, client advisors systematically document client’s reactions to the service they receive. Openness to feedback of this nature, professional complaint management and the will to work continuously on improving are evidence of VP Bank’s resolute client orientation.
In connection with this ongoing client dialogue, each year VP Bank receives and addresses close to 500 comments from its clients. The comments are made either to the client advisor directly or via the contact form available at the VP Bank website. With this ongoing process, VP Bank ensures the high quality of its services and fulfils the requirements of Liechtenstein’s financial market supervisory authority (FMA) regarding complaint handling.
Client satisfaction was also confirmed in the public domain: similar to the year before, Germany’s Elite Report awarded VP Bank its “cum laude” citation for excellence in financial advice.
A new client advisory approach
Individualised, portfolio-specific investment advice affords clients true added value. For that reason, VP Bank has added a digital dimension to its traditional advisory methods through the introduction of a computer-based application that reinforces our client advisors’ ability to provide systematic, high-quality investment advice. This tool also ensures that regulatory requirements, especially those relating to portfolio supervision, are comprehensively heeded. The advantages to the client from this new approach are obvious: enhanced transparency and understandability of the advice they receive, improved documentation, and a heightened sense of security thanks to continuous portfolio monitoring.
Adjustments have also been made to Bank’s traditional investment advisory business model, which still offers transparency and fairness in terms of the fees charged for these services. VP Bank has put together an array of advisory packages that bundle the individual services, each of which is clearly defined and priced in a way that clients always know what they are paying for.
The aforementioned advisory tool helps client advisors, together with their client, to analyse the portfolio from various perspectives, derive an appropriate investment strategy and then implement it appropriately. All the while, the portfolio is monitored for compliance with regulatory provisions, the particulars of the individual investments, as well as the client’s risk profile and specific instructions.
VP Bank’s open architecture concept enables clients to benefit from the “Best Manager Principle” in their selection of third-party investment funds. As to VP Bank’s analysts, they also work closely with an independent “Best Partner” in arriving at decisions on the most attractive stocks and bonds at any given time. The select circle of professional asset managers and research partners VP Bank collaborates with are amongst the best in the business, enjoy an outstanding reputation, and have long won the trust of market participants.
Included in our analysts’ recommendations are the products and services of leading financial institutions, as well as proprietary investment solutions developed by the Bank, itself.
Although the 2016 investment year ended on quite an upbeat note, it was nonetheless an extremely eventful and at times turbulent year. Right from day one, fears for the global economy drove the markets down with a ferocity not seen since the start of the financial crisis. However, market participants’ pessimism proved to be exaggerated. As the year progressed, the tactic of staying invested – or, as VP Bank recommended, selectively adding to positions – during the stress phase turned out to be the best route. The markets came away from the correction stronger than before, and most segments managed to recover. What remained was an enormous resilience, albeit one that was tested repeatedly during the course of the year.
The memorable events in 2016 were of course the surprising political decisions in Great Britain (Brexit) and the USA (election of Donald Trump). But perhaps even more astonishing was the nonchalance the markets demonstrated in response to these surprises. Despite the challenging environment in the emerging markets, VP Bank recommended overweighting them – and in the end, they clearly outperformed the equity markets of the industrialised nations.
Although global yields rose noticeably in the fourth quarter, bond investments on the whole did rather well in 2016 – especially in the corporate bond area, where the downtrend in risk premiums persisted.
Quality and efficiency of advice
To ensure that all clients receive advice that is of consistently high quality, VP Bank has refined its advisory process even further. New quality standards have been defined and optimised – for example, core elements such as the advisory philosophy, the relevant norms, digital and other aids, quality specifications, the precise allocation of responsibilities, as well as the collaboration between internal and external partners, to name just a few. This clearly elucidated advisory process forms the foundation of a goal-oriented service model which VP Bank has developed to facilitate the seamless interplay between personalised advice, specialist know-how and digitally assisted discipline.
The efficiency campaign launched in 2015 started to bear fruit in 2016. The optimisation of VP Bank’s e-banking and mobile banking applications has resulted in an increase in the number of electronically conducted transactions. And thanks to the automation of the client lifecycle processes – e.g. the compilation, maintenance and deletion of client data – our client advisors have won valuable time that can be devoted to intensified client care.
The acquisition of clients represents the starting point for the advisory process. Most of VP Bank’s new clients come to the Bank at the recommendation of existing clients. Client care is accomplished via a systematic process that starts with a determination of the client’s specific needs and ends with a precisely tailored solution.
1. Understand the client
Right from the very start, VP Bank wants to gain a comprehensive familiarity with its clients. Here, the primary questions are:
- Who is sitting across from me at the table?
- What are the obvious characteristics of that person?
- What were his or her motivators in the past; what are they today?
- What goals do they wish to pursue?
- How can we as a bank support them in achieving those goals?
The quality and quantity of the information requested/ received from the client are decisive factors in the subsequent advisory process and crucial to its being conducted in a goal-oriented manner. A prerequisite for successful collaboration with corporate clients or intermediaries is having a solid understanding of their specific business model.
2. Advise the client
In devising the most appropriate investment solutions, alternatives and various scenarios 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 the development of solutions. Accordingly, specialists as well as other sources of expertise are included in this process at an early stage and, if need be, are also in direct contact with the client.
3. Implement the client’s wishes
If the client agrees to the presented solution, implementation is the next step. Quality and precise timing are crucial in this regard. 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 this implementation is conducted in a timely manner or in keeping with agreed milestones that fulfil the expectations of the client.
4. Accompany the client
The advisory process does not simply end upon realisation of an agreed solution. Client wishes and the client profile change continuously. By periodically comparing the past and present client profile as well as the effects and performance of a previously agreed solution – this through proactive contact with the client – VP Bank generates true added value for its clients.
Ongoing training and education of client advisors
Clients are entitled to have a client advisor who is totally cognisant of their needs, always has a comprehensive understanding of their financial situation, and can propose optimally tailored solutions that fulfil those needs. And again in 2016, VP Bank paid the utmost attention to that entitlement – both in terms of its intermediary clients and private customers. To that end, our client advisors regularly attend training sessions and continuing education courses in a variety of fields.
The foundation for outstanding quality in investment advice is cemented by the Liechtenstein Bankers Association directive which prescribes a binding, uniform base standard for the knowledge and competence of all client advisors at its member banks. The goal of this directive is to ensure that top quality investment advice is provided also in the years to come, and that members adhere to the stringent standards of the ICMA’s (International Capital Markets Association) quality charter on professionalism in private asset management. The directive also addresses the skills and capabilities that will become mandatory as of January 2018 under MiFID II. Through its advanced employee training and education measures, VP Bank – as a member of the Liechtenstein Bankers Association – is complying fully with the word and spirit this directive, which is aimed at putting Liechtenstein in a leadership position amongst the world’s major financial centres.
As one of the first banks in Liechtenstein able to make such a claim, VP Bank today has SAQ (Swiss Association for Quality) certified client advisors under its employ. Selected advisors at the Bank’s locations in Liechtenstein and Switzerland attended in 2016 a series of comprehensive training courses for international SAQ certification and graduated with a professional degree. During the course of 2017, these certification efforts will be continued, as will specialised courses in tax, compliance and the rendering of cross-border financial services.
The legal and reputational risks involved in the cross-border 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’ cross- border business activities, which include the acquisition, advising and servicing of clients located abroad.
As VP Bank Group renders cross-border services, the Bank has regulated those activities in a binding cross-border 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 cross-border 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 supervisory standpoint.
As at 31 December 2016, VP Bank held client assets under management totalling CHF 35.8 billion, a 2.8 per cent increase over the previous year. Assets held in custody accounted for an additional CHF 5.8 billion. Total client assets at the end of the year therefore amounted to CHF 41.5 billion (previous year: CHF 41.4 billion). On balance, VP Bank Group recorded a net inflow of CHF 7.0 million in new client assets.
Classification of client assets under management
Analysis by asset class
Analysis by currency