Rolf Gerber, chief executive of LGT Bank Singapore is very proud of his bank’s royal connections. “The bank’s only shareholder and larges...

Rolf Gerber, chief executive of LGT Bank Singapore is very proud of his bank’s royal connections.

“The bank’s only shareholder and largest private client is the Princely Family of Liechtenstein for whom we manage approximately $1.8 billion. HSH Prince Philipp is our chairman and he takes a keen interest in Asia, visiting the region several times a year. His presence at client events is a key marketing tool, ” he told WealthBriefing.

LGT has recently stepped up their marketing campaign which, among other things, features high profile client events in connection with the private art collection of the Princely Family. The bank’s appeal to potential and current clients also hinges on the fact that although it is privately owned, it is publicly rated by Standard & Poor's.

And it is not only in marketing that the royal connection is important. The bank is essentially the family office for the Princely Family, according to Mr Gerber. Its flagship portfolio, GIM (Global Investible Markets) was originally the princely portfolio and was designed purely to manage the family’s liquid assets. Because of its success it was eventually opened to sophisticated investors.

LGT is not trying to be all things to all men. “We see LGT as a large boutique player although we have SFr71 billion in assets under management,” said Mr Gerber. For clients who want to talk to brokers every day, LGT is probably not the best place for them. “We’re not product pushers, in fact we don’t manufacture any products ourselves. We take a holistic approach and specialise more in the longer term areas such as succession planning and trusts.”

LGT accepts clients on their potential rather than looking merely at liquid investible assets and they do not specialise in any particular sector or target any particular group.

“This was a conscious decision we took several years ago. To target individual groups we believe that a critical mass is required. We’ve only been in Singapore for 4 years so we haven’t reached that point yet,” said Mr Gerber.

Mr Gerber is clearly bullish about private banking’s prospects in Singapore and the regulatory environment is certainly one of the key factors in Singapore’s wealth management success story. The Singapore government takes an active role to promote Singapore as a financial centre in Asia and as such the jurisdiction’s trust law has recently been changed to make trusts more attractive.

“The Monetary Authority of Singapore is not only the regulator and the central bank, but also the promoter of financial services in Singapore. They want financial services in Singapore to do well and they work with us like a partner to make this happen,” said Mr Gerber.

Also working to Singapore’s advantage is the changing attitude towards banking secrecy in Europe.

“But the flow of funds from Europe to Singapore is only partially driven by the European Union Savings Tax Directive”, according to Mr Gerber. “Investors are more global now in their outlook and hence, Singapore as a location is part of their global diversification.”

Mr Gerber says the current boom in the region for private banking is good for profit margins, but hiring has become increasingly difficult in a tight market for private bankers.

“The merry-go round of relationship managers will ultimately not help the industry. Relationship managers may loose credibility when changing too often. I would think that they can get away with changing banks every 8 years and 3 times in their careers.”

He added: “Hiring relationship managers is more difficult now and certainly more expensive. You have to look very carefully at the benefits a new relationship manager will bring, compared to the potential costs.”