PRIVATE BANKING: A STEPPING STONE TOWARDS WEALTH MANAGEMENT

Irshad JACKARIA

The “Banking and Financial” industry worldwide is experiencing a renaissance, with changes in its financial and non-financial fundamentals. Bankers in most parts of the world have been experiencing tough times, since the financial crisis of 2007-2008. In Mauritius, we are at the culmination of an era with the end of the Conventional Banking cycle. And, now, we will need to enhance our professionalism, level of customer care, and product and services range in order to enter the next phase of our development. At term, we want to be recognised as a prestigious destination, of international renown, for, amongst others, private banking, investment banking and wealth management.

Wealth Management is actually an on-going service offered by a bank, via a specialised and dedicated department, with defined steps that involve an Investment Policy Statement (IPS), execution of a customised plan, review and management. It is a focused and targeted service that requires a client-centric emphasis on a cycle of activities. Wealth managers build relationships with clients to help them establish investment goals and objectives that are consistent with their risk tolerances, unique circumstances and long term multi-stage needs. While maintaining high ethical standards and adhering to the fiduciary duty due to the client, wealth managers use a holistic framework to consider a client’s extended portfolio, which includes both financial and non-financial assets. Wealth management, especially the narrow definition focused on the High Net Worth client, is based on highly personalised service, with a high degree of sophisticated analytical technological tools in the background.

Managing the affairs of the “affluents” to “ultra high net worth individuals” (uHNWI), who are the actual targets of Private and Wealth Banking, is a complex and comprehensive process, based on a fiduciary relationship. And, with investors being asked to assume greater responsibilities for their financial future, especially for retirement, lifetime and multi-generational planning, and the increasing number of multi millionaires, the demand for savvy wealth management will grow exponentially.

At date in Mauritius, in 2015, Wealth Management, in its true definition, is not yet being practised, even by banks that have “wealth management” departments. For now, it is just the appellation. The form is here, not the substance. Rather, they have embarked on transitory offers, in the name of Private Banking, that will get them to offer full-fledged wealth management in the years to come. At Knowledge of the ART, we believe that this will only be possible if, amongst others, we:

  • have more access to qualified and experienced personnel in “La Haute Finance”, like CFA Charterholders, Actuaries, Private Equity Specialists, Commodity Experts, Alternative Investment Experts, Estate Planning Lawyers and Shariah Scholars.
  • train support staff in practical finance.
  • adopt industry-wide a Standard of Professional Conduct, Code of Ethics and the Global Investment Performance Standard.
  • foster a culture of 3rd party verification by reputed firms for the management of internal affairs of financial institutions.
  • embark on a 6-star style education and sensibilisation program for the Affluent customers.

And for those who want to be part of the bandwagon of this AGV (Automotrice à Grande Vitesse), you will need to further enhance your technical knowledge in banking, pension and insurance, tax planning and investment products, strengthen your mathematical and quantitative competence for financial analysis and calculation, elevate your customer care attitude, intensify and magnify your communication and presentation skills, supplement your competences with purchasing, marketing and negotiating skills and enrich your emotional intelligence. HAVE FAITH, AND LET’S US GET TO WORK.