Private Banking: the role of the relationship manager, past and present in comparison

Private banking plays a crucial role in the Swiss banking industry, offering financial services to high-net-worth private clients.

One of the most important figures in this sector is the relationship manager (RM). This specialist is generally responsible for understanding clients' needs, providing a top-quality service and keeping clients informed about developments in the financial markets and their portfolios.

The role of the relationship manager has not only characterised the banking landscape of the past, but it is also a key player in the present and will remain so in the future. It is a central position that collaborates with the mid-office and the specialists. The aim of the RM is to identify business opportunities for the bank. The RM takes on the function of the client's 'trusted advisor', bringing value and relevance to the relationship. From the client's point of view, there are satisfaction factors (both financial and holistic), including improving the client's financial knowledge during portfolio construction; advising on optimal risk and return outcomes; the constant flow of information in the future, especially during the portfolio construction phase in times of crisis; access to other experts according to the client's exigencies; and proactively reviewing all needs related to the client's size.

UHNWIs and younger people are willing to pay more for a more comprehensive service, including holistic aspects. Indeed, more and more customers are looking for solutions that encompass not only banking assets, but all dimensions of their professional and family life. Values, trust and technology are the elements that can help make the difference compared to competitors. Furthermore, it is important to involve the whole family, especially younger members, to build a lasting relationship that goes beyond the individual.

In the 20th century, the type of customer relationship established by RM was based on the portfolio of financial assets. This relationship was minimal and conditioned by the client's financial (including real estate) wealth. Some RMs did not even have basic information about their clients and only knew the share of each asset class invested in the client's portfolio. There was no segmentation. The same financial products sold to many clients only changed their attitude after 2008 (following large losses in managed portfolios), when regulators introduced the appropriateness process. The portfolio was completely hidden from the client and was a 'property' of the bank. In the past, there was little awareness of the client's risk profile. In contrast, since the financial crisis, clients are much more involved in all wealth management processes. Compared to the past, the first big difference is the extension of services, which is the consequence of an in-depth knowledge of the client's needs, supported by regulation. AI is starting to become an essential tool for the relationship manager and will be even more so in the future. Today, the RM understands what part of the value chain can be delegated to the machine. It is still challenging to move to a fully digitalised approach.

The problem for many is to adapt the front office to the new approach, without losing trust. However, new requirements have been recognised, but more importantly, possibilities have arisen, for example, the involvement of artificial intelligence can provide personalised and more accurate results.

The figure of the RM is evolving towards a more personalised and technologically advanced model, but the relationship of trust and understanding of the client's needs remain key elements for success. The challenge for the future will be to maintain the balance between personalisation and technology to ensure high quality service and a lasting relationship with the client.

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