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June 25, 2020updated 28 Jun 2020 7:59pm

A new private bank for new wealth

By Patrick Brusnahan

While retail banking is no stranger to fintech banks or digital sub-brands, private banking has only recently started dipping its toes into this water. The latest addition, Alpian, started off as part of the Reyl Group and targets the mass affluent. Patrick Brusnahan investigates

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Analyze opportunies within the wealth management market in APAC

GlobalData’s ‘Asia-Pacific Wealth Management: Market Sizing and Opportunities to 2026’ report provides a comprehensive overview of the Asia-Pacific (APAC) wealth management market.
  • The report analyzes the APAC wealth and retail savings and investments markets. This includes affluent market size, both by number of individuals and the value of their liquid assets.
  • The affluent population grew by 5.3% in 2021 and is expected to grow at an AAGR of 4.8% between 2022 and 2026.
  • The value of liquid assets held by the affluent segment surged by 8.4% in 2021, backed by economic recovery. HNW individuals’ financial wealth grew by 12%, while mass affluent individuals’ wealth grew by 6.0%.
  • The report provides an analysis of factors driving liquid asset growth. It is also split into asset classes - equities, mutual funds, deposits, and bonds.
  • The affluent population are more risk-tolerant and invest a significant proportion of their investments in risky assets such as equities, compared to emerging affluent and mass market individuals.
The report also provides data and insights on the size of offshore holding of HNW investors in the APAC region.
by GlobalData
Enter your details here to receive your free Report.

In May 2020, the Reyl Group announced the launch of Alpian, a digital platform designed to service mass affluent clients.

This followed a successful Series A funding round for Alpian SA to the total of CHF12.2m ($12.5m). In addition, Alpian has applied for an independent banking license from FNMA and plans to be ready by the first quarter of 2021.

According to Reyl Group, the mass affluent segment represents over 2.6 million people in Switzerland, with CHF660bn in assets. Therefore, it appears to be an obvious market to target.

While the project was incubated by Reyl, it is no longer a Reyl-only company and is evolving into its own entity. This is partly due to the funding coming from external sources.

Why start a digital sub-brand or start-up when you can simply offer the products within your own already established bank?

Speaking to PBI, Alpian chief executive Schuyler Weiss explains: “The reason that Reyl did it this way is because Reyl’s primary focus is on private banking clients. It really focuses on UHWNIs.

“Reyl realised that you need to have a very clear focus when you’re addressing clients. If you try to mix and mash, then you will not only not do so well when you expand to the affluent client segment, but you also lose focus on serving UHNWIs. This is why a separate company was made that specifically focused on catering to the needs of the mass affluent.”

The mass affluent

Alpian is tailored to those with liquid net worth between CHF100,000 and CHF1m. However, if somebody outside those parameters wants to join, the firm is “not going to stop them”. The services are just “tailored” to that band of wealth.

The new company has undergone market research to see the typical customer it would attract. While it was “not fitting to one specific segment”, Alpian found a lot of doctor, lawyers, engineers and professionals in that band.

As Weiss describes, they “have a good earning, they have saved a lot of money, and they need a bank that can elevate service while maintaining reasonable costs”.

So what does Alpian actually offer that is different and specific to the mass affluent segment? Weiss says: “This is how we differentiate: when we spoke to the affluent client, we found that when they think about banking, their main thought is: ‘How do I store my money and how do I spend it?’

“They need a debit card; they need a way of spending money; they need a way to pull out cash; they need a way of receiving their salary. We will offer all of those retail functionalities, but we will not go into lending.

“The next-level value is we offer an investment platform where we also pair each client with human advisers through our digital platform. That way we can guide our clients as they invest into the different products that we offer. This is really important, because a lot of people in this segment have never invested. When you pair them with a human adviser who can guide them through this process, you start to build that trust and you start to build that core foundation that lies at the heart of the banking relationship.”

Distributing and offering this with a digitally focused approach is the only way to “scale a high-quality offering”, Weiss believes.

New faces

Another difference between the traditional private banking experience and Alpian is the number of advisers involved. Rather than having one dedicated adviser, Alpian will connect clients with the right one at the right time, depending on individual needs.

Weiss explains: “One of the things that we’ve identified is that if you’re seeing the same person every time, that person may not be able to answer the question that you have. One person can’t know everything.

“The way interactions with our human advisors will work is that the client will, ahead of time, schedule an appointment where they say they want to talk about this particular issue. Based on a number of different criteria – such as the language that they speak or the issue that they want to talk about – for the best fit for the client, we’ll take all these criteria, and then we will match that with the right adviser to address their question and give them the service they need.”

He continues: “We don’t want an experience where the adviser on your left is saying ‘buy’ and the adviser on your right is saying ‘sell’. This is not a good or consistent experience. A big part of what we’re doing is pairing the client with the best adviser for them in that moment. At the same time, we’re also elevating and standardising the service that we offer to make sure that every client is getting the best service possible.”

Alpian currently has 14 employees, and is in the process of hiring more. The trick to achieving a level of service such as this is the right training. Alpian is in the middle of an “evolutionary process” where every adviser will go through a training module to make sure they can deliver advice clients require. If they do not pass the modules, then they will not be able to service clients, which is what the experience is all about.

“How we motivate people is not by paying them to sell,” Weiss explains. “We want our advisers to treat the clients, and the KPIs that we’re sending to them are based on feedback received from the client. At the end of every session, the client will be asked to give us feedback. If the feedback is consistently poor for an adviser, that will to reflect in their performance release.”

Staff are not the only people who may need some education. For a lot of the mass affluent, Alpian may be their first experience of advisory or wealth management. During Alpian’s market research, a group of 20 in the segment were asked if they knew what private equity was. Not a single person knew.

Weiss says: “We need to educate people beforehand and say: ‘Look, before you put money into this investment, we want to make sure you fully understand this investment.’ And so we will be doing a certain level of education to make sure that people are fully aware of the products and services that we’re offering.

“What we want to offer to people in this affluent segment is something more, something that’s really tailored to their needs. There is a need for wealth management services in the affluent segment. What we found in the market is that this segment is either overpriced or underserved.”

Will people put their trust, their first experience of private banking, in a new player?

“Trust is something very hard to obtain with the client. Nobody is going to put CHF500,000 in your account if they don’t trust you,” Weiss states.

“However, there’s no other banking system that provides the service we do. You need to demonstrate to people that they should give us a chance to build that trust with them.”

So when will we see a full launch?

Weiss concludes: “That’s up to FINMA. FINMA will be the one that gives us the licence. We will be ready by early next year, but again, we cannot launch until FINMA says ‘go’.

“We are not taking the difficult route by choice, but we will always take whatever route is best for the client. This is not an easy process. It was a 1,500-page application and took eight months.

“We could have gone to market as a fintech, and that would have been a lot easier, but we feel that going in as a bank helps us build that trust with clients, so they can say: ‘Hi, I’m putting my money in a bank.’”

Free Report
img

Analyze opportunies within the wealth management market in APAC

GlobalData’s ‘Asia-Pacific Wealth Management: Market Sizing and Opportunities to 2026’ report provides a comprehensive overview of the Asia-Pacific (APAC) wealth management market.
  • The report analyzes the APAC wealth and retail savings and investments markets. This includes affluent market size, both by number of individuals and the value of their liquid assets.
  • The affluent population grew by 5.3% in 2021 and is expected to grow at an AAGR of 4.8% between 2022 and 2026.
  • The value of liquid assets held by the affluent segment surged by 8.4% in 2021, backed by economic recovery. HNW individuals’ financial wealth grew by 12%, while mass affluent individuals’ wealth grew by 6.0%.
  • The report provides an analysis of factors driving liquid asset growth. It is also split into asset classes - equities, mutual funds, deposits, and bonds.
  • The affluent population are more risk-tolerant and invest a significant proportion of their investments in risky assets such as equities, compared to emerging affluent and mass market individuals.
The report also provides data and insights on the size of offshore holding of HNW investors in the APAC region.
by GlobalData
Enter your details here to receive your free Report.

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