In an interview granted to the Private Banking supplement of the Paperjam magazine, Luc Rodesch, Head of Private Banking and Member of the Executive Committee at Banque de Luxembourg, says that whatever the language used – private banking, wealth management, etc. – financial guidance for private clients requires global expertise and custom support.
As Head of Private Banking and Member of the Executive Committee at Banque de Luxembourg, how would you define private banking? Is it different from wealth management?
Luc Rodesch – To me, the terms private banking and wealth management are just different names for the same thing: a range of services for high-net-worth individuals. It’s just a matter of semantics. No distinction is really needed.
My definition of private banking focuses on the word "private". These are services designed for private wealth, as opposed to the business assets that a client may hold through a company, for example. Private banking is there to manage the finances of individuals or families.
What do you mean by “high-net-worth individuals”? Do you have different categories?
The concept is relative, with each bank having its own policy. At Banque de Luxembourg, we haven’t really set a minimum requirement to become a private banking client. Any investor residing in Luxembourg, and looking to save even a five-figure amount, is welcome.
Equally, a young doctor might not have built up any savings yet but may want to finance the opening of a surgery. We can offer financing solutions and an investment plan that meet current and future needs. However, not all services are available to everyone. For example, private equity may interest many of our clients. But comprised of highly illiquid assets, it is not open to all: the minimum entry ticket is generally €250,000.
Private Banking is there to manage the finances of individuals or families. Luc Rodesch, Head of Private Banking and Member of the Executive Committee
How is the offering from a private bank like your own now structured?
A private bank’s core business remains investment advice and asset management. Its services differ according to each client’s decision-making profile. The first case is of clients who have little knowledge of or particular appetite for the financial markets. We manage their portfolio on the basis of a discretionary management mandate.
Most of our clients now opt for this type of mandate. The second case is of clients who want to be advised but retain control over their investment decisions. They receive an investment advisory service within a very broad investment universe. Then we have execution-only clients, who want to make their own decisions for managing their wealth. They are mainly looking for a custodian.
What are the other areas in which you can support high-net-worth families?
People often believe, wrongly, that a rich person doesn’t need credit. But very often our clients, even the wealthiest ones, use our financing services. It’s not just about issuing a loan to buy a portfolio, second home or business, but also about providing comprehensive support in how to set up or structure this loan. This is an important aspect of our business and one that our rivals, especially a number of Swiss banks, do not offer.
Beyond our traditional private banking business, we also guide companies and entrepreneurs through their plans, helping them to manage, develop, secure and pass on their professional and private wealth. Lastly, we can help asset managers and fund promoters to create and develop their own investment funds, working all along the value chain.
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