No doubt about it – Switzerland retains her dominance on the private banking track, despite a scuffle of financial centres jostling avidly for position in the slipstream. Among the world’s wealthiest individuals, the Swiss long-standing track record of confidentiality, security, sophisticated asset management, red-carpet treatment and global investment strategy all count for a great deal, with bonus points for geographic centrality in an international context. Indeed, Switzerland’s strengths, current and historical, translate into continuing real success – 35 per cent of assets under management in ‘offshore’ wealth destinations are held there. Nowadays, however, it is not only the great banks in Switzerland who look after the financial affairs of the well-to-do. Their pre-eminence is being increasingly challenged by a relatively new breed of asset manager. These firms do not actually hold their client’s money that remains securely in the banks, but they structure and run their investment portfolios, capital assets, and tax affairs worldwide. A ‘trusted family adviser’ of the old school, if you will – small-scale, independent, oriented to the needs of the client in a way that huge multinational institutions can never be.

  Or so argues Genedon Asset Management SA (GAMSA), a well-established independent adviser based in Geneva. It is, of course, easy to make such claims; it could be counter-argued that to make comparisons between the private banking arms of, say, UBS or Credit Suisse and an independent outfit like GAMSA is to some extent to compare apples with pears, for the independents are hardly able to offer the global presence or the century-old track record that the banks can.

Back to the old school

The independents can, however, promote themselves on other factors, highly prized by high net worth individuals. Jeremy Lowry and Edward Clarke, GAMSA’s two directors, both worked for many years as private bankers in top European banks. They maintain that ‘the big banks are becoming increasingly less interested in providing effective tailor-made banking service’s as they become less flexible and more institutionalised and generally impersonal. Many banks are also tied by their own range of in-house products – which could, of course, amount to a further potential conflict with the interests of the client.

  GAMSA was founded on their disillusionment with such service, and on belief in the ‘trusted family-adviser’ approach which harks back to the old school of private banking. This goes way beyond straightforward portfolio management (though that’s a very important element of the work), to the structuring and coordination of every element of the client’s wealth (about which more in a moment) so that one professional finger is right on his or her financial pulse. It is highly personal, in that Jeremy and Edward are GAMSA, so it is they who will deal in person with every client and oversee each query or request. Over the years, as a result, clients and their families have become close friends. It is also entirely objective : there is no product to flog, so if they make a recommendation it’s because they believe it to be the best way forward for the client in the circumstances.

‘Most of our clientele have investment assets of between £500,000 and £5 million,’ says Edward Clarke. ‘We feel we’re filling a niche which the big banks no longer cover satisfactorily: their real red-carpet private banking service doesn’t really kick in unless you have £10 million plus to invest.’
  GAMSA’s client profile is a broad one, encompassing both inherited money and entrepreneurial wealth; it includes senior company directors, full time owner-managers, and female divorcees trying to juggle children and in some cases a job as well as their financial affairs. ‘Women clients are great to work with; ’ remarks Jeremy; ‘they value sound financial advice, especially in the aftermath of divorce.’
Moreover, because financial planning is an important part of the package, Edward and Jeremy always make a point of meeting the family. Indeed, this is a key consideration in their philosophy, as Edward explains. ‘In most wealthy families there is only one member who knows all about the finances. But what if something happens to that person? This is there the trusted family adviser kicks in: we hold all that information in our office, and it’s our job to know exactly what’s going on financially. We see ourselves as financial coordinators: even if we are not involved with every aspect of a client’s finances, we try to ensure that we hold copies of the paperwork to avoid confusion. We’ll also have records
of all the lawyers and accountants worldwide holding deeds of properties, wills and so on.’ GAMSA was founded on belief in the ‘trusted family adviser’ approach
 Co-ordination involves a thorough understanding of the client’s circumstances – to a depth which might surprise those used to the more perfunctory due diligence questions and personal fact-finding of larger institutions. ‘We’ll ask each new client in detail about his overall asset allocation, including houses, cars, boats, antiques and so on, as well as equities and other investments,’ says Edward. ‘We need to know what currencies they are currently invested in, and how liquid their assets are. We also need to know in which countries the main expenses are, because the first thing we want to do is to match all those expenses with income sources in the right currency. And then we ask all about their lifestyle and plans for the future, their family situation and their attitude to risk.’ Jeremy points out that although clients may be reluctant to divulge so much at first, it’s the only way GAMSA can do its job properly. ‘It’s like going to the doctor,’ he observes ; ‘if you want him to prescribe the right cure, you have to tell him what the symptoms are, even the ones you’d rather not talk about.’  At this stage, the client’s tax structure also comes under scrutiny. ‘There is still a lot that can be done for residents abroad and foreign domiciliaries,’ says Jeremy. ‘We work very closely with leading London-based tax advisers, who ensure that client’s affairs are as tax-efficient as possible.’

Of course, the well-off are usually well-practised spenders, and as clients add to their collections of houses, boats, art or whatever, GAMSA’s role as coordinator comes to the fore again. They’ll manage the purchase and make sure it’s held securely in a suitable structure ; in many cases they’ll also oversee the day-to-day running of the property. ‘We manage the managers and accountants, and all the obligations and contracts will be held here at the office,’ observes Edward. In addition, they will undertake administrative tasks such as the payment of bills and credit cards.

Tailor-made management
The other core element of their work is portfolio management; GAMSA is a member of the self-regulatory Swiss Group of Independent Financial Advisers (GSCGI). Once again, the first step is an independent appraisal of the client’s investments and the construction of a tailor-made portfolio as a starting point, based on what’s been learned about his asset profile, commitments, plans and enthusiasm for risk. GAMSA takes a basically conservative stance, however, focusing on long-term investments in blue chip equities on major exchanges and good-quality bonds, with select use of favoured funds to gain exposure to more far-flung or esoteric markets. It’s a discretionary arrangement: as Edward puts it, ‘we are the client’s eyes and ears in the marketplace; it’s our job to watch the screen and act, so that he doesn’t have to.’
  If a client fancies a punt on a more risky sector or investment vehicle, however, that’s fine. ‘We want to be able to sleep soundly at night, so we’ll do the sensible, liquid, quality portfolio and he can use other experts for more off-beat investments. But even there, we can find the best small cap fund, say, and negotiate a good deal for him.’
  Indeed, while GAMSA is built on a hands-on, highly personal, ‘small is beautiful’ approach, it is of a sufficient size to be taken entirely seriously within the market. ‘It’s a matter of pride to negotiate a discount with fund and bond managers, and that goes straight to the client,’ Jeremy explains. Beyond that, they have instant access to research from the likes of Morgan Stanley and Goldman Sachs, and are online to the top-drawer banks holding the client’s accounts, with whom they are in daily contact.
  The banking relationship is a smooth operation : ‘I don’t remember one misunderstanding in the last years – we operate on the same level,’ comments one key coordinator at a leading Geneva bank. ‘As one of the top banks, we won’t develop this kind of close reciprocal relationship with an independent adviser unless we know and trust them thoroughly.’ Of course, there’s a cost for old-fashioned service, but GAMSA stresses the importance of transparency. The bulk of their income comes from the annual management fee of 0.75 per cent of funds under management, and from the standard hourly charge levied for undertaking specific projects such as setting up a tax structure or overseeing a property transaction. Because there are no product fees involved, clients can feel confident their wealth is being managed in a genuinely objective way and that they are receiving true value for money. Which is one more valuable element in the ‘trusted family adviser’ package.