Sascha Steinmann: «Marcuard Heritage Offers a Greater Scope to Shape Things»
Independent wealth manager Marcuard Heritage has the critical size internationally to offer an attractive environment for entrepreneurially minded client advisers, as Sascha Steinmann explains in an exclusive interview with finews.asia.
Sascha Steinmann, you have worked at various banks over the past two decades and have thus gained profound insight into the industry. What have been the strongest drivers in recent years?
Developments in wealth management reflect geopolitical and social changes. Two drivers stand out in particular: the steadily increasing regulatory requirements and the ongoing margin pressure. The latter has affected banks for some time and is increasingly affecting independent wealth managers as well.
How is the industry responding to these influences?
The industry’s response can be summed up in one word: focus – shifting from breadth to depth by narrowing services, markets, or target client bases in response to these influences.
The focus is clearly on Ultra-HNWIs, i.e., very wealthy clients. With Credit Suisse no longer present as a holistic provider for wealthy clients, this concentration process, which was already underway, has gained significantly more momentum.
Is this focus successful?
It is an understandable response to safeguarding efficiency and profitability in large organizations. Whether this approach is successful everywhere cannot be judged across the board. What is clear, however, is that it opens up new market opportunities for other players.
In what way?
On the one hand, banks are increasingly focusing on Ultra-HNWIs. On the other hand, the needs of classic HNWIs are not getting smaller; quite the opposite. The younger generation of these clients, in particular, often has more complex requirements and is more open to new models.
«This opens a window for independent wealth managers»
If services are reduced or standardized, these clients look for new partners. This opens a window for independent wealth managers who, as gatekeepers with their networks, can cover all client needs.
Does this apply primarily to Switzerland, or is it an international trend?
From our perspective, it is an international trend. Very wealthy clients live international lives and are globally intertwined. Markets differ less in structure than in their traditions.
In Asia, new markets are emerging as a result of economic and demographic developments, with a younger client base, often first-generation wealth.
In Europe, by contrast, markets have grown historically and are shaped more strongly by wealth built up over generations.
So, competition for wealthy clients will become even tougher?
Competition has always been intense. For internationally active banks, however, there is also an opportunity: despite focusing, they can retain clients by ensuring those clients are no longer served exclusively within their own private banking, but via independent wealth managers who work with the bank.
But that also reduces the bank’s margin.
Not necessarily. With full cost allocation, business with independent wealth managers can be quite attractive for banks.
«Our network – currently just under 30 banks – develops from two sides»
The margin structure is different, but costs are lower, and scalability is higher. The key point is that the bank does not lose the client.
For the bank, the independent wealth manager is a different type of client.
Private banking and business with independent wealth managers differ fundamentally. One is a classic B2C model; the other is a B2B2C model.
For banks, that means: if they do not perform in the IAM business, they lose not only an independent wealth manager, but potentially a large number of end clients and future growth potential.
How does an independent wealth manager like Marcuard Heritage build its network of partner banks?
Our network – currently just under 30 banks – develops from two sides. On the one hand, we maintain an overview of bank services that may not be in focus today but could gain importance due to market changes.
On the other hand, our client advisers bring in specific client needs, and for each case, we look for the best possible banking partner.
How does that work in practice?
Such a network does not arise overnight. What matters are intensive exchanges with existing and potential partner banks, regular reviews, and, at the beginning, a structured assessment. Banks are often not even aware of their own strengths in the business with independent wealth managers.
How can that be?
When asked about USPs, we often hear very similar answers, for example, closeness to clients, fast decision-making paths, or security. These are important, but rarely truly unique qualities.
«This client group is increasingly being served less actively by large banks»
With our external perspective, we sometimes identify capabilities that are underestimated internally, for example, in risk assessment, in certain markets, or in specific forms of financing.
Are Ultra-HNWIs also the focus at Marcuard Heritage?
No, even though we are, of course, very happy to serve these clients. Our focus is on larger HNWI and, naturally, Ultra-HNWI assets between 5 and 50 million francs.
This client group is increasingly being served less actively by large banks. We can offer them the best of different worlds, individualized, transparent, and without conflicts of interest.
Does that mean independent wealth managers are cheaper than traditional private-banking providers?
Not necessarily cheaper, but significantly more transparent. We do not need to cross-subsidize, as is common at large banks, where highly specialized services for a few clients are ultimately co-financed by everyone.
You moved from the banking side to an independent wealth manager. After one year, what is your conclusion?
Both sides have their advantages. Personally, I value the greater scope to shape things at an independent wealth manager.
«The next client generation defines the relationship to the wealth manager differently»
We are more flexible, faster, and our focus is consistently on the best solution for the client – not on selling our own products.
How do you see the market changing in the future?
Geopolitically, the situation remains difficult to assess. What is clear, however, is that transparency and comparability of services will continue to increase.
The next generation of clients defines the relationship with the wealth manager differently, is more digital, and better informed.
In addition, we are seeing new providers, including in Switzerland, with a clear focus on the role of custodian bank.
So, will the independent wealth manager market grow?
Not necessarily in the number of providers. Particularly in Switzerland, we are observing consolidation, because regulatory requirements and client expectations require a certain scale.
With more than 5 billion dollars in client assets under management worldwide, Marcuard Heritage already has this critical mass. At the same time, we offer an attractive environment for entrepreneurially minded wealth advisers with a clear client focus.
I am convinced that the assets managed by independent wealth managers will continue to grow in the future.
Sascha Steinmann has been working at Marcuard Heritage for a little over a year and is responsible for the strategic development of relationships with partner banks. Previously, he spent more than 20 years, among other roles at Julius Baer, LGT, and VP Bank, in various capacities within the area of independent wealth management.
