VP Bank’s client advisory
VP Bank’s success is based on its business with sophisticated private banking clients, intermediaries and fund providers. VP Bank offers private banking clients customised asset management, investment advisory and fund solutions. It is also an established partner for financial intermediaries and fund providers, which appreciate the bank’s years of experience, modern technology platforms and digital solutions.
Clients know VP Bank as a competent and reliable partner. That was amply demonstrated in 2017 when VP Bank took in substantial net new money at all sites and across all segments. The outstanding advisory quality was also confirmed by the German “Fuchsbriefe” rankings, in which VP Bank received the highest ranking of “Top Provider 2018” for its client care.
Personal contact with clients
VP Bank stresses the importance of advisors and specialists having personal contact with their clients, along with additional support from digital tools. Basic client needs are increasingly met using digital technology. For more complex client needs, the bank’s experienced and knowledgeable staff are available and can propose optimal solutions with help from digital applications. Automated and digital processes also help save time so that client advisors can serve their clients even more effectively.
In 2017, client advisors at the Liechtenstein and Zurich offices were equipped with tablets. These lightweight devices enable advisors to prepare for client discussions optimally, regardless of the location, and they allow for a more dynamic discussion while facilitating follow-up measures based on the issues discussed. For clients, the tablets provide improved and more detailed communications with VP Bank. Information sources can be quickly accessed and any client needs that arise during the course of the conversation can be addressed very flexibly. Given the positive results to date, client advisors at other VP Bank sites will be equipped with tablets in 2018, thereby optimising their client relations work.
New market penetration
VP Bank is successfully developing its target markets (Liechtenstein, Switzerland, Germany, Luxembourg, Russia, Ukraine, Singapore, Hong Kong, Indonesia, Malaysia and Thailand). The bank is also penetrating a handful of so-called opportunity markets that have tangible growth potential.
VP Bank launched its “Relationship Manager Hiring” project in 2016 and was therefore able to recruit new experienced client advisors in 2017. Before recruiting the advisors, the bank first identified the markets where they are needed.
Adjustments to the services line
VP Bank clients can choose from a broad range of investment solutions, including various investment advisory or asset management services. Along with investment solutions, VP Bank also offers support for asset allocation as well as prevention and estate planning. Clients can also take advantage of various financing solutions. VP Bank is a custodian for fund providers. Basic services such as account management, custody management and payments make up the foundation of the overall services line.
VP Bank regularly reviews its services to make sure they are still compatible with client needs. In 2017, adjustments were made to the investment advisory activity in particular, along with efforts to optimise the lending strategy and offer clients excellent financing solutions in the future.
In investment advisory, clients receive value added through optimal portfolio construction developed jointly with the bank. The portfolio construction looks at performance, risk and regulatory criteria while using the client’s own ideas and taking the bank’s recommendations into account. The bank also provides on-going portfolio monitoring to ensure that the client’s risk profile and specifications are satisfied.
The recently introduced tablet version of the advisory tools rolled out in 2016 enables even more agile investment advisory. With these tablets, different investment proposals can be simulated for the clients directly during the client meeting, with the advisors and clients then working together to make the necessary adjustments. This ap- proach allows the advisory service to be performed from anywhere, and the user-friendly visualisation software enables clients to get an immediate look at how even the most minute adjustments will affect their portfolios and performance. Clients can therefore make an informed assessment as to the various investment choices when discussing options with their advisors, who stand by them to provide continuous support.
The services making up the investment advisory activity were reoriented to reflect adjustments to the business model, thus ensuring a transparent and fair fee structure for advisory services. VP Bank introduced special advisory packages with clear and transparent pricing that bundle various investment advisory services for clients. The clients receive high-quality, detailed investment analyses and recommendations and can discuss them with the client advisor and carry out the recommendations transparently. Many clients therefore enjoy better performance and greater risk diversification.
The positioning of the lending business systematically follows that of the strategic businesses, i.e. intermediaries and private banking. The local lending activity offers loans to retail and corporate clients. The lending business provides VP Bank with a key differentiation factor relative to traditional private banks.
Starting in the summer of 2017, VP Bank has become an issuer of complex structured products for Asian clients in the market. These clients can therefore choose VP Bank as the issuer and counterparty for such products as forex options, securities options, accumulator and decumulator products on underlyings such as currencies, precious metals, equities and ETFs.
Focus, quality, agility and efficiency
VP Bank’s client advisors focus on one of the client segments: private clients, intermediaries or corporate clients. These clearly defined roles by segment ensure excellent advisory quality and focus on the specific client needs of each segment.
In order to accompany the intermediaries clients even more closely and comprehensively, VP Bank defined clear client care standards that were rolled out in 2017. In this highly regulated area, very close personal cooperation between the intermediaries and their client advisors is essential. To provide clients with even better support, VP Bank introduced the new “ProLink” intermediaries platform, which offers extensive around-the-clock information on all investment and regulatory matters. It also makes all client documents available for downloading, and new client accounts can be opened digitally.
Consistent with the comprehensive advisory approach, the teams can use in-house competencies and external partners in order to come up with individualised solutions that satisfy all requirements. Clearly defined roles determine the interaction between client advisors and the respective specialists for investment products and services, tax, lending, funds and other units. The importance of interdisciplinary teamwork is growing steadily, as VP Bank must increasingly deal with the complex challenges of its clients.
VP Bank sets clear rules at each of its sites in order to keep legal and reputational risks in check with regulatory requirements, especially in cross-border services. During 2017, for example, regulations arising from the MiFID II directive were analysed in depth and covered in staff training sessions. VP Bank thereby ensured that all requirements can be satisfied as from the start of 2018.
VP Bank had already begun refining its advisory process in 2016 based on such core elements as the advisory philosophy, standards, digital and other support tools, quality requirements, the delineation of responsibilities and teamwork between internal and external partners. Those efforts led to further improvements in client advisory and care in 2017.
The advisory process begins with attracting new clients. Most new clients are referred by VP Bank’s existing clients.
VP Bank seeks to get to know the client and his or her complete financial situation, since this understanding is essential for providing targeted advice. For private banking clients, that raises a series of questions:
Who am I dealing with?
What distinguishes this person and what motivates him?
What are his goals?
As a bank, how can we support him?
In the case of intermediaries, the key is to understand the business model:
What is the intermediary’s business?
Who are its clients?
How is the intermediary positioned?
How does it do business?
How does it support its clients?
Where are its activities?
When proposing solutions, the bank systematically considers different alternatives and scenarios. Solutions are developed by teams made up of client advisors and specialists in direct contact with the client as needed.
Implement client preferences
The essence of VP Bank’s client care consists of the timely implementation of agreed-upon solutions or a clearly defined implementation timetable that meets the client’s expectations.
The advisory process does not end when the agreed-upon solution has been implemented. VP Bank periodically discusses the client’s preferences and profile with the client and adjusts the implementation accordingly.
Continuous education for client advisors
In order to uphold and further improve VP Bank’s usual excellent client care and advisory, the bank’s employees must receive continuing training and keep up with new trends and client needs. VP Bank paid very close attention to this need once again last year for both the intermediaries and private banking businesses.
VP Bank’s high-quality advisory is based on a directive approved by the Liechtenstein Banking Association, which serves as a binding, uniform basic standard that builds on the quality charter of the International Capital Markets Association (ICMA) for private asset managers. The directive also focuses on the knowledge and skills required under MiFID II as from January 2018. As a member of the Liechtenstein Banking Association, VP Bank provides the appropriate training and continuing education to ensure compliance with the directive and that Liechtenstein plays a leading role among financial centres.
VP Bank’s client advisors are certified by the Swiss Association for Quality (SAQ). As part of the international SAQ certification, nearly all advisors at the Liechtenstein and Swiss sites participated in extensive training and completed a professional course. In the future, specialised technical training sessions will also be offered for the services, tax, compliance and cross-border segments.
Client feedback management
VP Bank values a close client relationship and high service quality. Client feedback is therefore very important, as it enables the bank to better tailor its products and services to the needs of clients while recognising potential areas of improvement for internal processes. The bank’s openness to feedback, its professional approach to handling complaints and its willingness to work tirelessly on improvements all demonstrate its clear and uncompromising client focus.
As part of its dialogue with clients, VP receives feedback directly through client advisors or by way of a contact form available on the VP Bank website. This approach ensures that the actual performance reflects the high quality sought by clients. The bank therefore not only fulfils the requirements of the Liechtenstein Financial Market Authority (FMA) on complaint management but also makes a valuable contribution toward supporting the relationship management.
Under the bank’s open architecture, clients benefit from a “best manager approach” when selecting third-party funds. Analysts work closely with an independent best partner in the stock and bond selection process. The asset managers and research partners selected by VP Bank are always among the best in the branch, have an outstanding reputation and are trusted by market participants. Recommendations take into account both products and services of leading financial institutions as well as the bank’s own suitable investment solutions.
Looking back, 2017 was a simple year for investments. Following the Brexit referendum and US presidential elections, the markets were very fearful that in a year of major European elections another populist political movement could take power. This fear turned out to be just as unfounded as the fears of a complete shift in US policy under its new president.
Also, global economic growth was surprisingly strong. The fact that economists and equities analysts did not have to revise their economic growth / earnings forecasts downward, in contrast to previous years, provided added momentum to markets. While central banks did not implement new stimulus measures, the improved state of the economy meant that the expansive monetary policy alone acted as a quasi-stimulus.
Given the easing of political uncertainty and a better-than-expected economic trend, almost all of the asset classes recommended by VP bank enjoyed a splendid year.
At 31 December 2017, VP Bank had client assets under management totalling CHF 40.4 billion (13.0 per cent more than one year earlier). Meanwhile, assets held in custody totalled CHF 6.1 billion. Total client assets therefore stood at CHF 46.4 billion at the close of 2017, up from CHF 41.5 billion one year earlier. Overall, VP Bank Group recorded net inflows of client assets totalling CHF 1,894 million.
Classification of client assets under management