The global financial crisis has prompted wealthy individuals to ask their investment advisers more questions and even to query the relationship they have with their private banks. Scorpio Partnership, a London-based consultant for the wealth management industry, says more than US$1 trillion of the world's nearly US$13 trillion in managed private assets moved between banks last year. They reported that assets moved were generally transferred from large, integrated international banks to dedicated private banks or the private wealth management arms of banks that avoided exposure to toxic debts. Dedicated private banks claim the outflow of funds, and in some cases uncertainty over the balance sheets of large institutions, has done them a favour. They say the effectiveness of the integrated private banking business model has been put under scrutiny in the wake of the massive industry shake-up. However, international integrated banks say they can offer a more comprehensive suite of services to their clients and their strengths lie in the ability to provide their customers with wider investment choices. Pure-play private banks also argue that bigger is not necessarily better, and while integrated banks have scalable businesses, they are often unable to tailor services in the way that small players can. Furthermore, boutique banks say there could be a tendency for full-service banks towards selling their own investment products rather than picking the best on the market. This goes against the key aspect of asset allocation, which involves being flexible and opportunistic. Swiss-style banks such as Julius Baer believe they are able to differentiate themselves from the integrated model by providing a client-centric, holistic model. This includes a full product offering of open-architecture solutions encompassing advice and financial planning, as well as discretionary or advisory portfolio management to individuals and families. 'High-net-worth people are fleeing to security, and there is an increased appreciation of quality advice. Clients are also expecting higher standards of service and advice, as well as greater transparency and disclosure over products and services,' said Andrea Benenati, Julius Baer's chief executive for North Asia. 'Primarily, this means that Julius Baer can provide its clients with impartial advice and a suite of completely open-architecture investment solutions. Our business model eliminates any links to cross-selling. Consequently, our activities are firmly focused on private client asset management and client relationship,' Benenati said. As clients look closely at the performance of their banks (including their financial strength) full-service banks that protected their clients from losses are also enjoying the benefits. 'Even though the banking industry has faced some unusually tough times, JP Morgan Private Bank revenues have not dropped below 2007 revenues,' said Paul Scibetta, chief executive of JP Morgan Private Bank in Asia. Last year's revenue at JP Morgan Private Bank rose 20 per cent year on year to US$698 million, as resurgent markets boosted the assets of wealthy families. Scibetta believes JP Morgan's comprehensive integrated approach to serving clients has led to its success. 'In order to deliver the type of services sophisticated clients are looking for, you need product specialists spread across different asset classes and across regions. This reach enables the relationship managers and client-service specialists to tap the wider JPMorgan network to access the appropriate solutions that a client might need. Boutique-style banks will struggle to deliver this sort of service,' Scibetta said. 'Private banking clients are looking for broad, lifelong relationships with their banks, not just stocks or simple investment advice. They are looking for advice on succession planning for their business and family, how to manage credit lines efficiently and professional advice relating to their philanthropic activities. This requires a team approach and can be very complex to execute.' Citi Private Bank also believes its integrated business model works best for its clients. Aamir Rahim, the bank's Asia-Pacific chief executive, notes that to remain successful Citi, relies on strong institutional capabilities to cater to the requirements of clients who are becoming increasing demanding and more sophisticated. 'At Citi, for example, we provide top-tier advisory, structuring and manufacturing capabilities within an open-architecture platform. The ability to work in a team effectively and orchestrate the firm's considerable resources for the client's benefit helps ensure high-quality private banking advice,' Rahim said, adding that Citi's holistic model was adaptable and worked for all clients. In terms of trends changing to accommodate client attitudes, Rahim believes there will be a lot more transparency in the industry and this will govern everything from the products private banks market to the way they serve clients.