Après-ski moment: Why private banks are flocking to Verbier
Dans sa contribution à Citywire, Patrick Héritier, CEO de Pleion SA, parle de l’importance et des défis pour les sociétés de gestion de fortune d’avoir une présence dans la station de ski de Verbier.
L’article original, publié en anglais, est disponible ci-dessous.
With Barclays being the latest to move in, the Swiss skiing town is reaping the benefits of the shift to remote working.
At first glance, Verbier, a Swiss skiing resort with a population of 3,000, seems to be an unlikely candidate for a vibrant wealth management hub.
However, major Swiss banks and their international peers have been strengthening their presence in the town.
Barclays is the latest to move in, announcing the launch of a wealth management pop-up for the duration of the skiing season.
Verbier is a focal point for the wealthy, who flock to the town for the skiing season, thus allowing wealth managers to catch up with existing clients and hopefully attract new ones.
‘When you are a CEO of a big company or an entrepreneur based in London, your agenda is really full, so it might be difficult to catch up with such clients,’ said Jonathan Bruchez, head of Credit Suisse private banking for the region Valais.
‘But here they have time, as they come for skiing. We are happy to advise them, be it Swiss or offshore wealthy individuals.’
Rahim Daya, Barclays Suisse CEO, is not a skier himself but intends to start soon.
The bank is planning to send four employees to Verbier every week, rotating between relationship managers and debt structuring specialists.
Daya said the bank is already known for its lending and debt offering, with clients buying chalets in resorts with the help of bankers based in the Middle East or wider Switzerland.
In fact, one of the largest transactions his team has done was the purchase of a property in Gstaad on behalf of a Lebanese client, covered from Dubai.
However, this is the first time the wealth management team has a presence on the ground, which makes sense given the bank’s main competitors have a presence in the town.
‘We are already invested in Verbier as a location from an advertising perspective. To have a location felt like the right thing to do,’ he said. ‘It is about new clients, new money and new transactions.’
Verbier boasts the biggest population of non-Swiss tourists in the country and the fact that Barclays has temporarily opened offices in the town reflects the fact that the resort attracts British citizens.
Patrick Héritier, CEO of an independent asset manager Pleion, has work links to Verbier that go back many years as he helped develop the Verbier branch of Julius Baer in 2007.
Back in the day, French and English clients would walk in with skiing boots thinking they had found a new bar.
‘People would say: “Okay, can we have a drink?”’ he remembers.
A lot has changed for Julius Baer since then, as the firm went from two to 17 employees in the location, led by Florian Michellod. Héritier, who also opened an office in Verbier with Pleion, said merely having a presence in town is not a guarantee of success, with big names such as EFG not managing to make it work.
You need to bring something to the table, services that you are not able to deliver if you are not based there.
‘If you are in Verbier, you would like to have mortgages on the real estate you buy, similar to Monaco. Being able to provide good loan facilities is a key element,’ Héritier said.
The Pleion CEO said that when dealing with a young generation of entrepreneurs, networking is important and you have to have the right people, products and services.
Banks and wealth managers also have to ensure that advisers based in town have the right competencies. David Fournier, head of wealth management UBS Valais, said the bank’s representatives in Verbier need to know how to manage cross-border requirements of different countries.
‘They follow training and get certification to be allowed to deal with foreign clients. It ensures that all rules and regulations are adhered to,’ he said.
Verbier is a strategic location for UBS, which has more than a dozen people in town that provide various services, including current accounts, mortgages, wealth management, and merger and acquisition transactions.
‘We put the whole UBS platform at their disposal without them having to travel to our main financial centres in Zurich or Geneva,’ Fournier said.
Remote work effect
Although Verbier might be indistinguishable from other skiing towns in Switzerland to a casual observer, the crowd it attracts is different from other popular destinations like Gstaad and Crans-Montana.
‘In Verbier, you have more younger people and entrepreneurs who are looking for fun, sport activities or going to parties, while in Crans-Montana it is more oriented to retired people, even if the dynamic is currently changing,’ Credit Suisse’s Bruchez said.
‘The market is really attractive in all three locations and it is important to cover all of them, rather than just one.’
One of the trends benefiting Verbier’s status as a wealth management hub is remote working, which became much stronger during the pandemic.
Bruchez said you can spend three or four months in Verbier in winter and maybe one or two during summer, with such active pursuits like mountain biking becoming popular.
‘The environment is quite good when you have a family, for example. We have international schools in Verbier, where kids can spend one semester and then go to London for the next one,’ he said.
For traditional Swiss banks setting up an office in town seems to almost be a default option, given all of your peers are already there.
But this can also send a strong message of intent for those groups that want to grow their presence in Switzerland, such as Barcalys for example.
‘We were presented with an opportunity to take an office space in Verbier without much hassle,’ said Barclays Swiss CEO Daya.
‘We know it well, some of our clients are based there, it felt like a nice way to start.’