Francois Reyl, CEO of Swiss-headquartered boutique private bank, REYL & Cie, shares the bank’s winning strategies with Private Banker International editor Ronan McCaughey. He also explains why its growth has been based on the diversification of business lines – and why REYL & Cie is investing in its digital capabilities.
Private Banker International (PBI): REYL & Cie won the outstanding boutique private bank at the PBI Switzerland Awards 2017. What is REYL & Cie doing successfully that other private banks could learn from?
Francois Reyl (FR): We are pioneers in extracting synergies from a diversified base. Most Swiss banks are focused on wealth management as their core business, but we are active in five distinct areas of activity. The Group serves a clientele of international entrepreneurs and institutional investors through its wealth management, corporate and family governance, corporate advisory & structuring, asset services and asset management business lines.
Our dialogue with clients is much richer if we approach them via these different activities rather than being solely wealth management focused.
A good example of this is our corporate advice business which allows us to have a dialogue with entrepreneurs which is far richer than if we were going to ask them to manage their money on a balanced mandate.
We come up with solutions and take a true interest in our clients’ business; we try and solve issues for them, which really add value to their business.
This makes the dialogue in wealth management much easier and positions us more as a partner than just a service provider begging for business. This is quite original and goes back to our DNA and the way we are structured.
PBI: How would you summarise the performance of REYL & CIe to date?
FR: It was a very good year. The REYL Group reported assets under management (AuM) of CHF 15.8bn (up 19.5%) as of 31 December 2017, of which CHF 1.6bn was net new money inflows. [The bank had an] operating Income of CHF 130.2m (+29.7%) and an operating result before provisions of CHF 32.5m (+75.1%). Consolidated net profit stood at CHF 24.1m (+84.2%) and the Tier 1 ratio was at 15.6%.
This was a very active year from a business standpoint as well. What is good is that it occurred across a range of activities and not just focused on one area.
PBI: What is the bank’s digital roadmap for this year and next? Can you point out any innovations?
FR: We are focusing on in three distinct areas. One is the enhancement of the existing experience. We are working hard on developing a new app, developing our e-banking, developing our reporting, and developing straight-through processes to make our client experience easier and more comfortable.
We are investing in our IT department, and we want to catch up in terms of quality as we have not invested that much in this area.
Then separately through alliances and through deep studies with consultants and third party teams, we are looking at developing new products and new services, whether it’s global advisory or whether its ability to cross sell better.
Developing new digital services and products will be absolutely key.
The third area, which is where we have invested is in a series B round of a US bank called Aspiration. This is about our curiosity and our desire to identify truly deeply business models in the retail area.
We are not a retail bank but what we find is, retail banking particularly in the US is extremely innovative and you cannot sit and watch the world go by.
We identified with Aspiration which is a US bank, founded two years ago in California by an extremely talented management team, which focuses solely on sustainable banking in the area of digital with a single focus in every step of their organisation making sure everything they do is sustainable.
I find this very interesting as they are attracting a very high number of clients, they have now crossed the 250,000 account mark and their projections are extremely attractive, with very simple messages – pay what is fair.
They have technology to allow impact scores on everything that the client does, whether it’s retirement money or savings or even choosing a service provider.
Everything is [done] through sophisticated algorithms and everything is scored. This is appealing to the new generation and there is a lot to learn.
PBI: How concerned are you about Amazon and Google or Facebook even, entering the wealth management space?
FR: I think they could. I’m sure that Amazon with its means, or Google or even Apple would do a fantastic job. Now the human dimension remains essential to the family and entrepreneurial segment on which we focus and there you cannot ignore the destructive element of these companies entering the wealth management market.
However, I don’t think it will be sufficient to penetrate the entrepreneurial sections but it will pressurise margins further.
PBI: What is the wealth bracket to become a REYL & Cie client?
FR: We don’t have a specific threshold. We enjoy working with the young generation, or those who have put everything into the business and we can see the potential and we can see their drive.
We accompany entrepreneurs at various stages of the entrepreneurship cycle, so we have smaller clients in that respect. Typically, clients would pay 5M (Swiss or dollar as it’s the same) plus with liquid able assets.
PBI: Is there a particular type of client REYL & Cie attracts?
FR: Our clients in their 40s and 50s are still very active. They are at a point where they are thinking of organising themselves a little better and structuring their family and their governance better but they are still in the active phase. They are still looking for new solutions on the financial side or the advisory side.