Swiss banker maintains steady course

The rallying cry across much of the finance sector is to go 'back to basics', with a renewed emphasis on prudence, conservatism and partly forgotten ethical standards.

It is a move Franco Cheng, managing director and head of wealth management at Pictet (Asia), fully supports but will not be introducing, for the simple reason that his own organisation has always stuck closely to those very basics which others are belatedly rediscovering.

'By definition, we are very careful and always prefer to grow organically,' Cheng said. 'The industry has fallen flat on its face because of an incredible amount of irresponsible leveraging over a number of years. Sometimes I feel the industry is putting too much blame on the products rather than on the advisers and their approach.'

In contrast to the seemingly carefree style that brought certain institutions to their knees, he stressed that Pictet sought to embody the virtues of an old-fashioned adviser. In a nutshell, that means preserving wealth, providing value on a long-term basis and ensuring that every client has a realistic understanding of the match between risk and reward. This has worked well for the Swiss-based institution for 200-plus years and is underpinned by the view that getting rich quick and going bankrupt are two sides of the same coin.

'We are good at achieving steady growth, not 'magic' returns over a short period of time,' Cheng said. 'We operate on a purely open architecture system and only advise clients to take on something if we believe it offers good prospects versus current market conditions.'

It helps, of course, that after the experiences of the past year or so, clients have become rather more realistic. High-net-worth individuals and the wider investing public are no longer expecting outlandish returns of, say, 300 per cent over three years. By and large, they have seen the perils of taking on too much leverage and, while not staying away completely from riskier investment vehicles, have learned their lessons and become much more considered in allocating capital for long-term value.