Which bank does the best job providing finance and service to your family business? Those were the two simple, yet crucial, questions we set out to answer in an online survey of CampdenFB readers over the past two months. Below we’ve put banks in the order they were ranked for providing finance to family businesses. The figure in red indicates how they were ranked for service.
Serving family businesses can be complicated since the banks must cater for the requirements of the business as well as the needs of the family behind it. In addition there is no generic size or form for either the business or the family to take.
Given that less than 33% of family-owned businesses survive to the second generation and less than 3% survive to the third generation – succession planning and generational wealth planning is core to the success of these businesses.
We limited the number of banks participants could select to 22 in the survey (we had to stop somewhere!). Luckily we had many respondents contribute suggestions of their own – see the Notable Mentions box-out (page 37).
Swiss giant planted firmly at the intersection of family wealth and business
SERVICE PROVIDER RANKING 1
Key contacts: Sara Ferrari, head of Global Family Office Group
UBS was ranked first for best overall bank for providing finance as well as service provision. The UBS Global Family Office Group is dedicated to family office clients with institutional-like profiles and needs. Its biggest growth area for family business has been clients requiring corporate finance style services, due to more M&A activity and more IPOs.
Within core holdings, UBS looks at historical wealth, strategic/corporate holdings, restricted/illiquid single stock or private ownership. This is often highly idiosyncratic and requires unique solutions when it comes to corporate finance advisory and industry knowledge. Family business owners may also need access to buy and sell-side M&A execution, equity/debt capital markets (IPOs, block trades), structured equity/financing, and hedging/risk management. Specialist client advisers are employed to support family businesses and entrepreneurs. It has teams of investment bankers providing a financial advisory service to private business-owning clients. The bank emphasises the importance of building long-term relationships with family businesses.
US blue chip broadening advice in Asia
SERVICE PROVIDER RANKING 7
JP Morgan, like other private banks, aims to leverage its overall size to help family business owners manage both their business and their wealth effectively. Business owners can work with the banks own specialists as well tax and legal advisers to ensure that common issues are all dealt with. These can include effective income tax liability and tax-efficient protection strategies, restricted/control stock planning, fulfilment of charitable goals, and retirement strategies. There is also a focus on setting wealth transfer goals and finding appropriate solutions such as freezing the value of assets, discounting assets’ taxable value or transferring future appreciation to beneficiaries. The bank also shows clients how to leverage gifting, through the use of family partnerships or by using discounted assets. Succession planning and transition is a key facet of the service and the firm recently published a white paper on Asia Family Enterprise - looking at challenges and best practices in rising generations, transition, and governance.
New initiatives in family enterprise backed by 70 years of experience
SERVICE PROVIDER RANKING 5
Key contacts: Bernard Rennell, regional head of global private banking, Asia-Pacific; global head of family governance and family enterprise succession
Within HSBC Private Bank, the private wealth solutions (PWS) business has almost 70 years of experience in assisting families in business deal with business succession across generations. The bank’s global footprint, combined with a wide range of services and expertise, means it actively connects its clients to real opportunities across multiple markets. In practical terms this means a collaboration with retail, commercial, and investment banking teams to provide clients with a breadth of services to meet all of their banking needs.
The experience on offer means clients can avoid certain pitfalls including inadequate financial controls or auditing, concentrating on financial matters at the expense of human capital and succession planning and blocking family member participation in key decisions. HSBC has also recently hosted forums for next-generation family members in London, Miami, Geneva, and Macau.
Global footprint can open doors for cross-border family businesses
SERVICE PROVIDER RANKING 2
Key contacts: James Holder, head of global family office, EMEA; regional head for Northern Europe
Citibank came second in the ranking for service levels. Its aim is to be able to provide the most effective leverage between the various banking services for clients. The personal experience of a private bank is combined with institutional-level access to Citi’s global expertise, strategies and services. The offering includes brokerage, investment management, lending, banking, trust, custody, and a wide range of advisory services. The link to the investment finance arm means that a range of credit and lending facilities is on offer to manage finances. There is a single relationship manager to remove the time taken to work with multiple lenders and processes to meet real estate opportunities and marketable securities. Highly-tailored strategies are also on offer to meet diverse interests such as sports club transactions or private equity capital call commitments. Lending experts also work by drawing on the resources of other Citi businesses to bring M&A, capital markets, and other financial expertise into tailored finance transactions.
Strong local presence gives it the edge engaging the Mittelstand
SERVICE PROVIDER RANKING 4
Key contacts: Rolf Bauer, head of international family office services at Deutsche AWM
Germany’s largest lender has family businesses firmly on its radar sponsoring an annual survey of major family businesses in Germany alongside the Federation of German Industries (BDI). Deutsche asset wealth management’s (AWM) provision to businesses works in conjunction with a family business structure. Deutsche AWM employs experts in a variety of fields to help families effectively manage a diverse array of holdings, as well as estate planning. Key to this is the wide range of lending solutions that can be either standardised or customised. Lending solutions are on offer for family offices wanting to acquire, diversify, or leverage a wide range of assets. For highly sophisticated family offices, the key client partners/family office team provide exclusive access to investment banking solutions and enlarge the lending capabilities to non-recourse financing, single equity, and illiquid lending solutions.
Deutsche Bank’s private & business clients unit, meanwhile, provides banking and other financial services. Its strategy focuses on key market niches, where it offers advisory banking to affluent private and business clients. Business owners can also leverage the bank’s overall expertise in areas like global transaction banking and corporate treasury sales.
Pictet & Cie
A family bank that understands family business
SERVICE PROVIDER RANKING 3
Key contacts: Grégoire Imfeld, head of Pictet Family Office
The Pictet group is unlike all others in the list – it remains a family bank. A partnership that has been handed down through nine generations, it prides itself on being able to understand the value of independence and entrepreneurial spirit present within a family business, represented by managing partner Marc Pictet. Pictet has developed expertise in the structuring, investment and operational demands of business and entrepreneurial clients. It provides high-quality services accessed via institutional activities both in wealth management and asset services. Its asset services provide clients with expertise in fund services, custody, and trading, rooted in its private banking culture. The bank also underscores the importance of a private environment where they can talk to the owners. Its Pictet family office services unit differentiates itself through its team’s experience, innovative best practices and dedication to the long-term family well-being. This means aligning business needs with the protection, control, and growth of wealth.
Business banking with an emerging markets focus
SERVICE PROVIDER RANKING 10
Key contacts: Stephen Richards-Evans, global head, ultra-high net worth, private banking clients
As an historic trade bank, family businesses can benefit from the provision of an holistic overview. Indeed, many clients are entrepreneurs and business owners, and the personal and business wealth needs of such clients are often inextricably linked. The bank provides corporate finance and M&A to help them manage their businesses, release liquidity, and diversify away from concentrated risk in their own businesses. It also offers principal finance opportunities for both business and private investment. This stable of investments may include co-direct investment opportunities with other family offices or with the bank. There is also provision of investment management opportunities and professional advisers and fund managers, including philanthropy management opportunities. At the appropriate time, clients can be helped to build, maintain and prepare for the transfer of wealth through succession harnessing trust and estate planning activities in Singapore and Guernsey. Its bottom ranking for service suggests more work may be required on client relationships.
Societe Generale Private Banking
Entrepreneurial roots adds expertise in understanding business families
SERVICE PROVIDER RANKING 6
Key contacts: Galeazzo Pecori Giraldi, global head of private investment banking
Societe Generale Private Banking accompanies many leading family businesses through key moments in their personal and professional careers, helping entrepreneurs and business owners structure their personal assets in order to protect, develop and pass them on to future generations. In particular, Societe Generale’s private investment banking (PIB) offering allows clients who have a holding company or a family office to benefit from access to all the expertise within the group, in terms of wealth management and investment banking, for the management of their private wealth and their business. PIB has a distinct family offices division served by a team of experienced senior bankers dedicated to large entrepreneurial families with bankers based in Paris, London, Geneva, Milan, Madrid, and Frankfurt. PIB delivers solutions to family holdings and family offices to advise them on the most suitable solution or combination of ideas, in order to meet their specific needs. It also offers co-investments ideas for their large clients across Europe.
Royal Bank of Canada
Stable stewardship helping this Canadian challenger
SERVICE PROVIDER RANKING 9
Key contacts: Mark Fell, head of global ultra-high net worth services
RBC Wealth Management has built strong relationships with family businesses and entrepreneurs globally. Key for family business owners is the ability to leverage the bank’s suite of core capabilities, including investment management, wealth structuring, and banking. This extends to investment banking, capital markets, custody, and asset servicing.
RBC Wealth Management’s service offering includes strong discretionary investment performance, experience as one of the world’s largest trust providers, and as a widely-acknowledged leader in banking and credit, backed by a strong balance sheet. International clients are attracted by the Canadian banking system, and what it represents: solid management, strength and stability. For this reason the World Economic Forum has voted it the world’s soundest financial system for seven consecutive years. In 2015, Royal Bank of Canada partnered with the non-profit Business Families Foundation, to provide family businesses with a robust suite of support tools to help with transition and succession planning.
More than two hundred years of experience guiding family wealth
SERVICE PROVIDER RANKING 8
Key contacts: Erich C. Smith, executive director, wealth management family office services
BNY Mellon Wealth Management is in the ranking due to popular demand – not included on the original list off 22 options, it was a name that cropped up numerous times amongst respondents – which is why it features here. It has deep experience working with family businesses, small and large – there’s a good reason for it. Its founder, Alexander Hamilton, started doing it over 200 years ago. There is a wide range of services these days including investment planning, evaluating retirement plan benefits, private banking, credit and lending facilities, insurance and more. The approach is comprehensive; working with the businesses’ other advisers, such as attorneys and accountants, to help these enterprises with their growth strategies. Through its team approach it helps families and their advisers address the various issues around a sale or transfer of a family business. At the same time, it works with families to define their long term financial goals. That includes helping them with family governance, philanthropic goals, estate planning, and establishment of trusts.