VP Bank’s client advisory
VP Bank has a diversified business model with clearly defined business segments. The core activity consists in the business with affluent private clients and financial intermediaries. The product line is enhanced through comprehensive fund solutions for fund providers, asset managers and management companies. In Liechtenstein and Switzerland, VP Bank offers a broad universal banking line for retail clients, small to medium-sized companies and real estate companies.
VP Bank’s client advisors work with clients in the private banking, intermediaries and corporate segments. By assigning client advisors to clearly defined segments, the Bank ensures the best possible advisory quality and a focus on the respective needs of clients in each segment. Thanks to numerous synergies between the respective business segments, VP Bank clients benefit from attractive value added among the products and services.
For its advisory activity, VP Bank focuses on personalised support, quick decision-making capabilities, agility, flexible and sustainable solutions and a long-term approach. The strong net new money inflows in 2018 were generated by clients across all VP Bank’s segments and sites.
The quality of the customer service and support is regularly assessed by independent specialists. As part of the “Tops 2019” assessment published by Fuchsbriefe in Germany, VP Bank was rated “Very Good” for transparency and “Good” in the overall category. The ratings firm highlighted the well-informed advisory service, broadly diversified portfolio and outstanding transparency.
VP Bank markets
VP Bank’s activities revolve primarily around its defined target markets (see “Strategic orientation of VP Bank” on page 25). Additional growth potential is developed in other opportunity markets – mainly other regions in Europe. In 2018, for example, we successfully penetrated the Scandinavian market through the acquisition of fund clients of Carnegie Fund Services along with private banking clients of Catella Bank in Luxembourg.
VP Bank regularly ascertains its clients’ views and assesses its advisory quality, thereby gaining continuous insight as to how it can adapt its services to satisfy client needs more effectively. Internal processes on the delivery of services are also reviewed and optimised with help from client feedback. The Bank pays close attention to future client needs so that we can provide services that address them now or move in that direction. We constantly solicit client feedback through personal discussions, contact forms on the website and regular client surveys.
In the event of complaint situations, the Bank speaks directly with the clients to find ways to remedy the existing situation and determine the implications for managing the relationship going forward. This approach also satisfies the complaint resolution guidelines of the Financial Market Authority (FMA) Liechtenstein.
VP Bank’s services
VP Bank’s strengths are its comprehensive client support and the combination of diverse services. Complex client requirements are assessed systematically by taking into account the economic, legal and risk aspects along with operational considerations, and clients are kept constantly informed about the status.
The Bank’s service offerings start with basic services for account and custody management and payments. For private clients, we offer customised asset management and investment advisory, asset structuring, prevention and estate planning, financing and fund solutions.
In the investment solutions area, VP Bank has a broad range of investment advisory and asset management options. Clients can work together with their client advisor and investment specialists to put together an optimal portfolio that combines their own ideas along with proposals from the Bank. On-going portfolio monitoring ensures compliance with the client’s risk profile and specifications. A specialised advisory team offers clients support for their specific individual requirements.
In the asset management area, clients may choose between mandates for fund-based products and individual securities. They can also determine the frequency of the portfolio adjustments. VP Bank also offers a sustainability mandate that places further emphasis on environmental, social and corporate governance issues.
The lending business is aligned with the strategic business segments, i.e. intermediaries and private banking. The linkage between investment and financing solutions and the establishment of specialised solutions are key differentiation factors relative to traditional private banks. In the local lending business, VP Bank is very well positioned as a lender to retail and company clients.
In order to provide comprehensive support for our clients, VP Bank works together with outside specialists. We are thus able to recommend partners to our clients for asset structuring, prevention and estate planning, tax advisory, business advisory and business transactions.
Financial intermediaries and fund providers benefit from a diverse range of services customised just for them. Along with basic account and portfolio management, custody and order processing services, VP Bank offers special services tailored specifically to intermediaries for investment and regulatory advisory as well as fund solutions.
A broad range of digital solutions for sharing data and information makes VP Bank a leading bank for intermediaries clients. These clients benefit in particular from the new e-banking platform, which was completely upgraded in 2018. The full panoply of features customised for intermediaries, such as user administration capabilities by the intermediaries themselves, was improved with optimised user navigation, new technologies and brand new layout. ProLink, the highly regarded intermediaries portal was also enhanced with new features, such that clients can take advantage of a comprehensive, real time information platform. A new interface compatible with the Electronic Banking Internet Communication Standard (EBICS) was also launched in order to standardise the sharing of payment transaction data.
Digitally supported client services
For client advisory, VP Bank relies on personal contacts between advisors and specialists. In so doing, the Bank can recognise the more complex client needs while anticipating future ones.
Digital tools support our client advisors with this process, from the client meeting preparation phase to the execution phase following the meeting. Tablets make it possible to simulate various investment proposals directly during the advisory meeting, make adjustments jointly and place orders. Portfolio adjustments thereby become much more transparent and tangible. It becomes possible to make well-informed decisions even during the client discussions, since the client advisor can provide immediate answers to questions and clarifications.
In addition to enhancing the transparency of investment proposals through simulations and adjustments, the tablets can also be used to gather the latest information during the period leading up to the client discussion, for example with the on-boarding process initiated directly on the tablets. Clients benefit from efficient communications with the Bank, and it is no longer necessary to input information manually after the fact. In 2019, tablets will also be provided to the client advisors in the Singapore office.
The use of digital tools makes it possible to resolve simple and recurring client needs efficiently, regardless of time and place. It also enables the advisors to focus on the more complex client needs during the personal discussions. VP Bank’s new e-banking offers intermediaries and private clients improved and efficient user administration, greater oversight capabilities and new features such as access to market data. The groundwork was also laid for a client portal offering access to market information and services such as payments, account queries, order placement and e-Post.
Structured advisory process
VP Bank’s clearly defined advisory process ensures that individual client needs are implemented professionally. It also provides client advisors with guidelines based on default solutions for recurring processes and activities, digital and other resources, quality requirements, the definition of responsibilities and collaboration between internal and external partners. These tools give the client advisor more time to support clients individually.
The steps in the advisory process include new client development, understanding, advising and implementing client preferences and long-term accompanying the implementation.
In 2018 we revised our advisory process for intermediaries and implemented it at the Group’s European sites. This process was then introduced in Singapore in early 2019. The on-boarding process in the intermediaries area was also restructured and standardised throughout the Group in 2018 in order to accelerate processes.
Details on the advisory process can be found in the online annual report.
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.
Compliance with regulatory provisions
In 2018, new regulatory provisions were introduced or enhanced, and all client-facing employees were given appropriate training. Processes were introduced in connection with the General Data Protection Regulation (GDPR) so that clients can exercise their rights as regards data protection. At the Liechtenstein site, the expansion of the European Market Infrastructure Regulation (EMIR) to the European Economic Area was implemented. Further measures in connection with the Markets in Financial Instruments Directive (MiFID) and the Automatic Exchange of Information were also undertaken. In particular, the MiFID provisions introduced in 2017 and implemented starting in 2018 improve investment protections for clients through increased transparency on costs, product suitability and order execution.
Continuous training for client advisors
Highly trained client advisors are the foundation for excellent support. VP Bank invests continuously in their training and continuing education. In 2018 several client advisors at the Liechtenstein and Swiss sites received their international certification from the Swiss Association for Quality (SAQ). These measures are further enhanced through on-going training on technical, economic and regulatory issues.
At 31 December 2018, VP Bank had client assets totalling CHF 41.5 billion, up 2.8 per cent from the previous year. It also held another CHF 7.0 billion in custody assets, bringing total client and custody assets to CHF 48.5 billion at the end of the reporting period (2017: CHF 46.4 billion.) Overall, VP Bank Group recorded net new client money totalling CHF 3,197 million.
Classification of client assets under management