Alongside high-net-worth clients, EFG in Switzerland focuses on serving the independent asset manager (IAM) segment. Why is the IAM segment of strategic importance for the bank?
The IAM industry is an important pillar of our Private Banking business in Switzerland. In total, we work with around 2,500 IAMs who manage approximately CHF 450 billion of Assets under Management. The industry has grown in recent years and the consolidation that many had predicted has not so far materialized.
EFG wants to consolidate and expand its position as a partner to IAMs in the Swiss market because we believe that we have the expertise and capabilities, as well as the right platform, to serve the needs of high-touch and high-tech IAMs.
We are investing continuously in this segment to make our IAM offering even more attractive. In 2019, for example, we entered into an important strategic partnership with the IAM software provider Expersoft. As a result, our IAM clients now can benefit from access to the multi-custody platform AMone.
Which type of IAMs does EFG focus on in Switzerland?
The IAMs we work with have different service models: They may be discretionary asset managers, fund managers or multifamily offices. In terms of size, they range from very small companies with only two or three employees to complex and well-structured organizations. With our personalised approach, robust IAM platform and highly specialised and experienced team, we are able to serve all these types of IAMs and to deliver solutions to meet their specific needs.
What is EFG’s key differentiating factor in the IAM segment in Switzerland?
Our bank’s business with IAMs has evolved from two very different approaches that were ‘inherited’ as a result of the integration of EFG and BSI. By combining a more platform-oriented model on the one hand with a solution-oriented model on the other, we have been able to create a unique approach to partnering with IAMs and to meeting the needs of their clients.
Our IAM clients benefit from the considerable knowhow and experience of our professional CROs, our robust IAM platform and our expanding service offering, as well as our state-of-the-art trading room, our team of dedicated investment specialists and our unique collaboration with Leonteq and Expersoft. Very few banks in the market can address every specific IAM and client request as efficiently and effectively as EFG.
Despite the consolidation that was widely predicted, the number of IAMs in Switzerland has remained stable in recent years. How is the sector adapting to the rapidly evolving operating environment and increased regulatory requirements such as FinSA and FinIA?
For many years, I also believed that the consolidation in this industry would happen and that the number of IAMs would decrease significantly. However, I was proved wrong – probably because I underestimated two factors: First, the number of new IAMs is still rising because clients value the unique selling proposition of the IAMs – primarily their independence and the continuity of the relationship. Second, IAMs have a lean business model and can easily adapt to regulatory and other changes. What we are seeing more and more is that IAMs, especially smaller ones, are relying on external partners in areas such as Compliance and IT to help them get in line with new regulatory requirements.
Against this backdrop, what are the most pressing challenges that the industry is facing and how have IAM needs evolved?
The challenge for IAMs is to keep their operating costs under control while investing in technology and complying with the new regulatory frameworks of FinIA and FinSA. For example, selecting, negotiating and implementing a third-party Portfolio Management System requires time and money. And not all IAMs have the necessary technology knowhow in-house. IAMs are currently evaluating the options in the market to see what best suits their needs. EFG IAM Desk can support them through our strategic partnership with Expersoft, which provides state-of-the-art IAM tools in Switzerland and abroad.
Technology is growing ever more important in the wealth management industry. How is this affecting the IAM segment?
Technology really is becoming a ‘game changer’ in the IAM industry. An IAM domiciled in Switzerland works with an average of six custodian banks. All the IAM processes need to be multi-custody enabled unless the IAM wants to rely on its own tools or on online banking platforms. And with the arrival of FinIA and FinSA, multi-custody capabilities have become even more crucial to keep costs and other resources under control.
Importantly, the Covid-19 pandemic is also accelerating the digitization process in the IAM industry, like many others, because IAMs need to work remotely and communicate with banks and their clients using more advanced technology-based collaborative tools.
The pandemic dominated every aspect of life in 2020. What were the biggest challenges you faced during the year?
The IAM business is a platform-driven business but it will always be a people business. Staying close to IAMs and helping them build and strengthen client relationships is the first priority for the IAM Desk Switzerland. Our bank responded very swiftly to the pandemic, providing the front with all the necessary tools to collaborate with partners internally and externally. In fact, thanks to our high operational resilience, we remained in contact with our IAMs at all times. Nowadays, a videocall with the IAM, our EFG experts and the CRO is the standard approach.
What about the outlook for 2021?
Collaborating with IAMs using digital tools will be of key importance again this year. We aim to launch further innovations to make the IAM-client-CRO relationship even more digital – for example, by making it possible to digitally sign key client documents.
Profile
Daniel Ioannis Zuercher joined EFG in August 2019 and has been Head IAM Switzerland and Global IAM Coordinator since 1.1.2020. He is based in Zuerich and leads the three IAM Desks in Geneva, Lugano and Zuerich. Before joining EFG, Daniel Ioannis held various management roles at Credit Suisse mainly in the IAM Desk and the COO area. Prior to that, he worked for PriceWaterhouseCoopers Consulting in Geneva serving Private Banks as Banking Consultant. Daniel Ioannis holds an MBA at University of St. Gallen and a Global Executive MBA from Columbia Business School and London Business School. He is married and has three children.