Private banking has been tested by nearly two years of the Covid-19 pandemic. The industry passed with flying colors—and with considerable help from buoyant financial markets.The global rich stuck by their bankers, even as the profession’s traditional lifeblood—cozy personal interaction—abruptly stopped flowing. Assets under management at the top 25 global private banks swelled by 14% to $29 trillion in the year to June 30, 2021, according to consultant Aite-Novarica Group. “The biggest banks and wealth managers proved themselves quite resilient and robust,” says Meghna Mukerjee, the firm’s London-based senior analyst. “They have remained close to current clients and managed to bring in new clients.”
Indeed, high-net-worth individuals seemed to become more attached to private bankers as pandemic-related turmoil swept through their businesses, families and portfolios. DIY financial management went out of fashion; the family confidante came back in. “Our surveys show more than 80% of clients are satisfied or very satisfied with their banks,” says Nalika Nanayakkara, who leads EY’s wealth and asset management practice in New York. “Advisers are stepping up to be trusted advisers.”
A massive shift to online communication may prove a blessing for banks as a cost-cutting tool. “Productivity has gone up for many professional services,” says Jill Zucker, a senior partner at McKinsey & Company in New York. “There’s no travel time, and much less time lost running from meeting to meeting.” If the Zoom era lasts post-pandemic, which seems likely, banks may also save on compensation by shifting advisers out of the highest-cost financial capitals, she adds.
More good news: The pandemic, and the surprising bull market that accompanied it, ignited a worldwide investment fever among not-yet-rich individuals. US citizens alone opened 29 million new brokerage accounts, enthusiasm not seen since the 1990s, Zucker says.
That widens the feeder pool for private banks, and this year the best of them mastered new methods to fish in it. “The funnel has opened up,” Mukerjee says. “Through social media platforms, advisers can reach a whole new set of clients they weren’t looking for before.”
Read the whole review here: https://www.gfmag.com/magazine/december-2021/worlds-best-private-banks-2022