Uncontroversial, conservative, even dull: one of Zurich’s largest banks wants to overhaul the characteristics traditionally associated with Switzerland’s financial services industry.
Zeno Staub, chief executive of Vontobel, has ordered a rewrite of the bank’s job adverts to attract “people that have an opinion, that challenge our status quo,” he told the Financial Times. “We even dared to put in there: excite. We want to have fun.”
The change is part of Swiss banks’ efforts to stay ahead in the market for providing financial services and managing the wealth of the world’s richest families.
Switzerland’s biggest private banks, including Vontobel, have successfully expanded overseas, especially in emerging markets. But they face tough competition from international rivals, with ultra-low interest rates and costly additional regulation since the financial crisis further squeezing profit margins.
Previously, Vontobel’s job adverts emphasised employee benefits and career paths. But clients “want to interact with a partner that has a profile,” Staub said. “Safety and discretion are important, but Swissness also means quality.” He added, however: “Being Swiss alone is not enough to win tomorrow’s game.”
Vontobel, which is controlled by the extended Vontobel family and related foundations, is smaller than rivals UBS and Credit Suisse, but has grown rapidly in recent years, including via acquisitions.
It employs more than 1,600 — twice as many as 15 years ago. As well as private banking, it also has asset management and investment banking operations. Total client assets reached CHF208 billion ($213 billion) in 2017 — up from CHF52.2 billion in 2002.
Active vs passive
In the past, Swiss banks were prized by clients largely for their discretion and low profile. Until a decade ago – before the automatic exchange of tax information between countries – they were used to hide wealth. But they now have to compete also on investment performance and service.
Rivalry between Switzerland’s top private banks was highlighted in November when Boris Collardi quit as chief executive of Zurich-based Julius Baer to become partner at Geneva rival Pictet.
Staub’s recruitment plans fit with Vontobel’s aim to be an “active” investment manager for clients where possible – rather than falling back on increasingly popular “passive” strategies that simply replicate market indices.
“Our ‘added value’ assumes that we have a different picture about the future than the current average market consensus,” Staub said. A longer-term approach also helped active managers outperform. “True ‘active’ works,” the Vontobel boss insisted.
Staub, who became Vontobel chief executive in 2011, is one of Switzerland’s longest-serving bank bosses. He still had “lots of things to do”, however, and said clients valued stability, “obviously, as long as we perform”.
His plan for exciting bankers might appear to contradict demands from regulators and politicians, with the industry becoming more cautious and boring since the financial crisis. Staub said, however, he expected his bankers to take responsibility for their actions, not stray into any grey zones and to “do only things you would like your mother to read about in tomorrow’s newspaper”.
“If boring means that you do not lie, that you put the interests of your client first, that you do what you say, that you have a high degree of personal integrity . . . If that’s boring, I’m happy to be the most boring person on earth.”
But if boring meant never considering alternatives, questioning the market consensus or having creative ideas that helped clients, “then I think boring means dull”.
Over the past decade, Swiss banks have paid more than $5.5 billion in penalties and compensation related to claims that they helped US clients evade tax. In December 2016, Vontobel said its discussions with the US justice department had concluded without it paying a financial penalty.
Copyright The Financial Times Limited 2018