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Raymond Ma

Direct descendant of  Swiss bank's founder believes family ties help cultivate long-term relationships with clients
In the corporate sector, there has been much debate  about whether family ownership enhances or destroys value. This debate is even more open to different opinions when the people running the firm are the descendants of the company founder.
However, to  Nicolas Pictet,  a sixth-generation direct descendant  of the banker who, in 1841, lent his name to a private bank  known today as Pictet & Cie, family ties are  crucial to its success.
On the one hand, the Swiss banker says that clients prefer the element of continuity bestowed upon having  at least one member of the family made partner  at the bank to perpetuate its values of quality service.
This same element of continuity also helps to attract and retain high quality people  because it gives them a feeling that they are working towards something greater than just making money.
The bank was  founded as De Candolle, Mallet & Cie in 1805 in Geneva. Because Jacob-Michel-Francois de Candolle,  one of the founders of the bank, had no sons, he turned to his wife's nephew, Edouard Pictet,  to assume his  mantle. Since then the bank has borne the name Pictet in at least part of its name in  one form or another.
It employs more than 2,800 people around the world, with more than   428billion Swiss francs (HK$3.199 trillion) in assets under management and custody  at the end of last year.
With a reputation for being closely controlled, it is one of only 14 private banks registered in Switzerland. Besides private banking, it also has other business lines such as asset management for  private and institutional clients, global custody and family services, and fund management.
It is a partnership with  eight general partners.   Nicolas Pictet  is one of the eight, overseeing Asia business development and recruitment.
Of the bank's 38 partners in its more than 200 years of history, 14 of them were Pictets.
Today, two Pictets  are  partners. Alongside  Nicolas, cousin Ivan also serves as the bank's senior partner. All partners hold unlimited liability in the event of a financial disaster.
In Asia, the bank operates out of Hong Kong and Singapore servicing the whole of Asia.
It has a staff of around 60, with about 12 private and institutional bankers based in each office, with the rest of the headcount filled by support staff.
Reflecting on the family-owned nature of his organisation,  Nicolas Pictet said that while he had the same surname as the bank, there was never any obligation for the bank to give him a job.
'Neither my father, nor my grandfather, nor my great-grandfather were with the bank. We have a system at Pictet which says that if you are a partner then when you retire they refund you what you put in as  capital, and we part ways.
'There is no way for a partner to ask the company to take their son. It's not like a limited company where you receive shares and give them to your son. So they are totally free to choose whoever they like,' Mr Pictet said.
Commenting on the market, Mr Pictet said he believed that the  credit crisis in the United States would accelerate a trend whereby clients were turning away from massive multipurpose private banking houses, and towards more specialised advisers to manage their money. He also expects that banks will try to move away from the product-driven sales, and focus more on providing quality service.
'If you want long-term [success] it is about building a good relationship with clients,' Mr Pictet said.
'If you ruin the cake by selling products to make a quick buck this way it is self-defeating. It is bound to fail one way or another and the client will feel cheated. I think this is a big problem we are facing in the financial industry - that most people distrust their banker.
'Clients [from other banks] say that 'what I am getting is not what I need. I feel like a lemon or an orange, I am squeezed for fees'.'
However, he also noted that this could be difficult for some banks that were under pressure from shareholders to achieve economies of scale at the expense of service quality.
'Shareholder pressure can have some very negative effects. Some relationship managers [in other banks] are getting, on a weekly basis, the return on assets they have to achieve as their goals.
'They get a warning from their manager if they are below [that threshold]. So what do they do? They sell anything that may sell [such as] products, trusts,' he said. 'A trust is not a product by definition. It is a long-term financial solution, and it has some very deep consequences, but it is sold as a product.'
As a result of these two trends, he believes that the war for talent will grow even more intense in the coming years, as the number of wealth management companies in Asia grows. But this pool of 'real private bankers' will remain constant.
He said  there would be a need for more well-rounded bankers with a high level of financial education.
In addition to addressing the client's private banking needs, they will also need to have a clear understanding of their legal and tax environment, and advise them on how to pass on their wealth to the next generation. With that in mind, Mr Pictet hopes to hire up to five such high-calibre professionals before the end of the year in Hong Kong.



Continuity is key to success