Banca Albertini Syz is benefitting from the family legacy of the Albertinis and the experience of its Swiss backbone Banque Syz&Co., to support its private banking stronghold in Italy. Valentina Romeo speaks to the bank’s co-general director, Daniele Piccolo, to understand how the lender is getting ready for the industry’s changing times
In current, increasingly complex times, scaling up a business internationally requires the adoption of new approaches. Banca Albertini Syz has a competitive advantage from this perspective, in the challenging Italian private banking landscape, as it has the support and ‘modern’ look of its Swiss backbone, Banque Syz&Co.
The Swiss banking group that also has a presence in the UK, Spain, Austria, Luxembourg, and Nassau, recently increased its stake in Banca Albertini from 50% to 64% – becoming its main shareholder. Banque Syz&Co. has more than CHF30bn ($31bn) in assets under management (AuM).
However, co-general director of Banca Albertini Syz, Daniele Piccolo, emphasises on the role of the 50-year-old financial tradition of the Albertini family that still perpetrates the lender’s operations in the country.
With its AuM at 3.2bn ($4.1bn) as of June 2014, Banca Albertini Syz was established via a partnership agreed in 2002 between Banque Syz&Co. and the Milanese group Albertini.
Though currently the Albertini’s have a minor shareholding in the bank, the lender’s name and legacy remain vital in the Italian finance world, Piccolo says.
Piccolo joined "the family" in 2007, taking responsibility for the lender’s private banking activities.
In Italy, more than 70% of private clients have a retail banking relationship. Generally, these banks have mass-market private banking activities as their product and service offerings are "relatively modest", Piccolo explains.
"Syz is a modern asset manager as in its management capability is absolutely at the forefront in both the style and competence of the people who work within the group," Piccolo says.
Growing against the odds
In recent years, and through the financial crisis, Banca Albertini Syz has substantially grown as well as changed its mandate and proposition.
During 2013 and most 2014, 39% of the total assets managed by Banca Albertini Syz were under the advisory mandate, and, contrary to common practice, a part of the assets was moved to the discretionary management side, growing by 8.3% over the last year.
The Italian market, Piccolo explains, has significantly contracted over the last few years, leading to almost zero new wealth creation in the country.
Despite that, in 2013 Banca Albertini Syz managed to grow by an exceptional 48% compared to the previous financial year.
Banca Albertini Syz’s growth was attributed to the bank experiencing positive commissions’ performances, a substantial growth in the client segment and personal wealth, and an increase in its Sicav’s retrocession.
The bank also recently closed a branch in Rome as part of its forward-looking strategy – a move that further boosted resources.
"As a firm, you’ll never say you don’t want to grow. But clearly, you can’t grow by all means and at any costs," says Piccolo.
Banca Albertini Syz also has a well-thought out acquisition strategy for its private bankers.
In Italy, most financial institutions of this kind have stringent non-compete clauses in their employees’ contracts, and, as Piccolo says, "moving a banker from one bank to another has become quite problematic".
"Our growth model is not based on hiring bankers from other lenders, over-paying them, and facing the struggle of moving their clients’ portfolios to our firm.
"We want to grow in a healthy way, and that is through economic relationships that would satisfy both the private bankers and the bank’s shareholders," Piccolo explains.
As of October 2014, Banca Albertini Syz had 24 private bankers to count on, including 9 financial planners (promotori).
Banca Albertini Syz offers personalised services to more than 1,950 clients including young entrepreneurs, professionals and wealthy families across the country.
As Piccolo puts it, the "informative symmetry" that used to separate private bankers from clients has significantly reduced. That is mainly because clients can easily access any financial information via the internet, for instance. Also, present-day clients tend to be as educated as their bankers – if not more.
"Obviously, banks need to make a big effort to stay on track with the competence and professionalism of their private bankers or clients will opt for DIY options," Piccolo says.
According to him, a modern private banker needs to possess a high-skilled education, with solid and diverse financial knowledge, ranging from tax planning to compliance, from regulations to fund management.
"We have a diverse client segmentation, serving HNWIs with at least 1m in investable assets, but we also have the opportunity to serve clients with over 100m," he adds.
Despite economic turbulences, Italy is still considered among the most important European asset and wealth management markets.
According to Julius Baer’s Europe wealth report, Italy figured among the top four countries with the largest concentration of wealth (15%) with 8.3trn and 818,000 millionaire households.
As for bigger private banks, Credit Suisse’s private banking division in Italy recently boosted its advisory team, concentrating on the UHNW segment. However, the group sold part of its private banking division, mainly catering to the HNWIs, to Banca Generali in July this year.
Every country within Europe has its own ‘localism’, which should not be underestimated, points out Piccolo. He expects more M&A activities coming to the fore in Italy and predicts increasing consolidation as firms with less than 1.5bn in AuM "will struggle to stay in the market".
In this regard, Banca Albertini Syz has an advantage. Piccolo says: "A large part of our ‘brain’ is abroad and we are expected to adjust and personalise our services to the local clientele. Without the backing from Geneva, we would have been too small to survive."
According to Piccolo, going forward Italy will "see things that the UK has already seen in the private banking industry".
In the next three or four years, he expects a significant reduction of bank branches as well as a general "reconversion" of banking staff into financial planners or eventually, rising redundancies.
"In Italy we are just starting with the idea of IFAs (independent financial advisors), but we don’t know the degree of success that such a service might have," he says.
Additionally, MiFiDII will further change the distribution paradigm in the Italian market, and will define the direction of the bank’s future strategy, says Piccolo.