Barclays Wealth launches BETA

Barclays Wealth has launched a
product that implements tactical asset allocation recommendations
from the firm’s global investment strategy group to participating
clients’ portfolios.

The Barclays Wealth ETF Tactical Allocation
(BETA) Portfolios are designed for clients who seek an asset
allocation product that is actively rebalanced as market conditions
fluctuate, but who want the advantages of implementation through
passive, index-tracking ETFs.

Led by Barclays Wealth head of investment
strategy Aaron Gurwitz, global investment strategy draws on senior
research and strategy professionals from across the Barclays
organisation to determine effective portfolio positioning in
real-time, as markets and investment opportunities change.

“Our goal is to provide investors with the
highest liquidity and the best market tracking available in the
most cost-effective manner,” said David Romhilt, head of manager
research and selection for Barclays Wealth in the Americas.

The BETA Portfolios’ combination of broad
asset allocation with tactical adjustments and passive
implementation means BETA may be well adapted to smaller portfolios
such as those of clients’ trust beneficiaries, investors with
larger portfolios who seek a core/satellite approach, or those who
seek an automatic rebalancing of their asset allocation.

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Cantonal banks look

Banque Cantonale de Geneve (BCGE)
has opened a representative office in Hong Kong after receiving
authorisation from the Hong Kong Monetary Authority. The office
will cater to individuals, institutions and companies interested in
investing in the Asian financial markets. Swiss Cantonal banks
fared well during the financial crisis, benefiting from inflows
because of the problems at UBS and, because they are retail banks,
deposits with them were seen to have a state underwrite.

The first cantonal bank to expand outside of
Switzerland was St Gallen Kantonalbank which set up a Munich branch
in June.

The Banque Cantonale de Geneve Hong Kong
office will provide offshore banking and financial services to
private clients. The institutional clientele will be able to use
the office as a conduit, linking to the firm’s financial centre in


FSA guidance on structured

A Financial Services Authority (FSA)
investigation into the sale of structured products in the UK found
significant advice failings on the sale of structured products,
particularly those backed by Lehman Brothers.

The review of marketing and distribution of
the products also criticised the accuracy of marketing literature
in most of the financial advice firms sampled.

The FSA, the UK’s financial regulator, was
acting on behalf of investors who had bought Lehman-backed
structured products and were affected by the failure of the
investment bank. These included possible access to the Financial
Services Compensation Scheme (FSCS) to investors in Lehman-backed
products, and payment of redress by some advisers “where

Additionally, the FSA looked at the wider
structured products market. It is writing to the largest sellers of
the structures asking them to examine how they have sold them in
the past compared to FSA standards.

“The focus of our review has been to achieve
the best possible outcome for as many people as possible that
invested in structured products backed by Lehman Brothers,” said
Dan Waters, the FSA’s director of conduct risk.

“We are also taking decisive action to address
issues in the wider structured products market to ensure that all
future investors will be treated fairly.”


Pictet launches gold fund in

Pictet has launched Pictet Precious
Metals Fund – Physical Gold, a fund which tracks the price of gold
by investing in standard gold bars of 12.5 kilos.

It offers investors the opportunity to own
physical gold stored in high-security vaults belonging to the
Geneva-based bank. Investors are able to redeem their units by
physical delivery, available through sub-custodian banks located in

“During times of financial stress, gold is a
safe haven,” said Philippe Pol, an investment manager at

“Moreover, gold has consistently proven its
ability to hedge against inflation and currency movements, and it
can be used as an effective diversifier in portfolios. Physical
gold’s fundamentals remain thus highly favourable. Investing
through a reputable partner should therefore be very attractive to


IT identified as the tool to
tackle key problems

The three key challenges for wealth
managers are risk, compliance and cost effectiveness, according to
research by technology provider Callataÿ & Wouters. The
research found that 94 percent of wealth managers stated IT was
‘very important’ and ‘quite important’ in addressing these

Despite the recognized importance of IT among
wealth managers, as many as 63 percent did not know whether their
IT systems were based in-house or outsourced. While 81 percent of
wealth managers thought that their cost effectiveness was ‘good’ or
‘excellent’, only 35 percent rated their company’s use of
outsourcing equally highly. In fact only 35 percent of respondents
outsourced any IT at all, with the most commonly outsourced part
being the back office at 22.4 percent.

“As wealth managers look to tackle cost, risk
and compliance, a better awareness of the benefits of outsourcing
is a must,” said Marc De Groote, CEO, Callataÿ & Wouters. “For
example, it allows wealth managers to benefit from best in class
technologies which provide the flexibility and scalability required
to meet customer demands. Furthermore, by enabling shared
ownership, it also reduces operational risk and costs.”


Foot review welcomed by Channel

A report setting out a series of
standards for tax compliance in the UK’s crown dependencies has
been welcomed by the main jurisdictions.

The independent review, conducted by Sir
Michael Foot, a former Bank of England official, stated the future
sustainability of the jurisdictions depended on them meeting
international standards on tax information exchange, financial
regulation, anti-money laundering and countering the financing of

The crown dependencies – Jersey, Guernsey and
the Isle of Man – welcomed the report. Foot recommended
“international pressure must also be maintained on competitor
jurisdictions to raise standards”.

The jurisdictions are reviewing their tax
regimes, and there is speculation the so-called zero-10 corporate
tax systems they operate could be abolished (see PBI 253). Isle of
Man director of finance John Spellman said no immediate changes
were planned.

“As a responsible jurisdiction we continually
review international developments on business tax and are committed
to remain competitive and maintain international standards,” he

“No immediate change is planned in the Isle of
Man but consultation with business is ongoing in light of these
international developments.”


Wealthy families seek

The world’s wealthiest families have
significantly changed their investment preferences in the past
year, with a shift in interest towards safer and more transparent
asset classes.

Research by the recently-launched
Family Office Channel, a non-profit online information resource,
showed 67.4 percent of families were more likely to invest in gold
and other commodities after the financial crisis.

Bonds were also more popular, with
59.3 percent saying families were more interested in them after the
financial crisis. Hedge funds suffered the biggest decline in
sentiment, with two thirds saying the likelihood of families
investing in them had either reduced, or greatly reduced. The funds
have become unpopular because of a lack of liquidity in some cases,
a lack of transparency and poor performance.

“Qualitative evidence suggested many
believe failings are systemic and fear more failures and frauds,”
said a spokeswoman.

The research was based on the
responses of 100 employees at family offices, private banks, wealth
managers and advisers and was conducted in October.

The Family Office Channel is supported
by 100 international partners from firms including Butterfield,
KPMG, Lombard Odier, New Philanthropy Capital and Withers


Wilmington hires new

Wilmington Trust Corporation has hired
Linda Bourn, formerly a multifamily office executive at OmniVest
Group, as a managing director for its family-office focused Wealth
Advisory Services business. Bourne will be based in New York but
will work with Wilmington Trust’s clients throughout the US.

“In the family office services
profession, there are few advisers with Linda’s leadership
experience and industry stature,” said Mark Graham, head of
Wilmington Trust’s wealth advisory services. “We are delighted to
have her at Wilmington Trust. I know she will be a valuable asset
to our clients.”

Commenting on her appointment, Linda
Bourne said: “I am excited to join Wilmington Trust, a firm that
was founded more than 100 years ago to serve the needs of
high-net-worth individuals and families. With such an esteemed
legacy and some of the most respected professional staff in the
wealth management industry, I couldn’t be joining a better


UBS fined £8m for rogue

The Financial Services Authority
(FSA) has fined UBS £8 million ($13.3 million) for failing to curb
unauthorised transactions involving customer money on at least 39
different accounts.

An in-house investigation disclosed that the
firm’s employees had been making as many as 50 unauthorised
transactions a day, trading in foreign exchange and precious
metals, using client money and allocating losses to their accounts.
The FSA said UBS had failed to manage and control key risks,
implement effective remedial measures and provide an appropriate
level of supervision.

One employee, Andrew Cumming, was fined
£35,000 for helping document false loans to conceal losses arising
from unauthorised trading. In addition, UBS has paid-out in excess
of $42 million compensation to cover its clients’ losses.

Margaret Cole, FSA director of enforcement and
financial crime, said it was one of the largest fines the FSA had

“These employees were able to take advantage
of UBS’ inadequate systems and controls, giving them free rein to
make unauthorised trades with customer money that they were then
able to conceal,” she said.

The unauthorised activity, which took place
between January 2006 and December 2007, was brought to light by an
internal source.


Mercer offers wealth research

Mercer, a consultancy for
institutional investors, has launched a wealth management service
offering guidance on governance, investment strategy,
implementation, portfolio construction and manager research.

Wealth management firms will be able to
supplement their own internal research with Mercer’s and tap into
the firm’s analytical resources.

“As a global investment advisory firm, Mercer
is well positioned to understand and advise on the challenges
wealth management firms face in building competitive and lasting
investment solutions for the increasing demands of their clients,”
said Michael Curtin, head of Mercer’s European wealth division.

“We see a major opportunity to benefit clients
through bringing ‘institutional-quality’ research and consulting to
the retail world.”

Traditionally Mercer’s client base consisted
of large institutional investors, but in recent years the firm has
received a lot of interest from financial firms seeking business


BOC and Rothschild to
strengthen co-operation

The Compagnie Financière Edmond de
Rothschild Banque and Bank of China are to strengthen their working
relationship. They will collaborate on fund selection and
management, in product conception and commercialisation and private
banking services.

The announcement comes after Bank of China was
told by its domestic regulator in April that it was not allowed to
acquire a 20 percent stake it had been trying to buy in Rothschild,
possibly because it was considered too expensive. It had offered
€236 million ($350 million) for the stake in October 2008, at the
peak of the financial crisis.


Deutsche Bank and Sal Oppenheim
sign framework agreement

Deutsche Bank has bought struggling
German private bank Sal Oppenheim Group for €1 billion ($1.5

Deutsche Bank will maintain Sal Oppenheim’s
asset and wealth management activities, as well as its brand to
strengthen its position among high-net-worth private clients in the

As of 30 June 2009, Sal Oppenheim Group had
around €135 billion in client assets under management and employed
approximately 4,400 staff. Deutsche Bank’s Private Wealth
Management unit at the end of June 2009 managed invested assets of
roughly €171 billion.

The purchase of Sal’s Luxembourg-based holding
company, all activities of the German subsidiary and Sal Oppenheim
Private Equity Partners (SOPEP), means Deutsche Bank will have a
dominant position in the German market and is likely to become the
fifth-largest wealth manager globally.


Abu Dhabi Bank selects software
provider Advent

Abu Dhabi Islamic Bank, one of the
largest in the Middle East, has selected Advent Software, a
software service provider for the global investment management
industry, to supply the firm with the technology to support its new
global wealth management division.

Advent Portfolio Exchange (APX) management
system will enable Abu Dhabi Islamic Bank to expand their services
in order to meet a wider range of their clients’ financial goals
and objectives.

“A key component of Abu Dhabi Islamic Bank’s
objectives is to use state-of-the-art technology to develop and
deliver our banking products and services,” said Malik Sarwar,
executive vice-president of global wealth management, Abu Dhabi
Islamic Bank.

“APX gives us the capabilities we require to
meet the wealth management industry’s best practice requirements,
as well as the scalability to grow the business in line with our
vision of being a top-tier Islamic financial services group.”


QNB launches outfit in

Qatar National Bank (QNB) has
launched a new Swiss private banking subsidiary called QNB Banque
Privée, based in Geneva. The unit is an extension of QNB Group’s
existing private banking services in Europe, where it has branches
in London and Paris.

Swiss financial regulator FINMA made QNB Group
one of a handful of GCC financial institutions to establish
operations in Switzerland.

Led by a team of senior bankers QNB Banque
Privée will offer services to QNB’s longstanding Qatari customers
looking to expand their investments internationally, as well as
cater to the needs of high-net-worth individuals throughout

QNB Banque Privée will work closely with QNB
Private, the private banking arm of the QNB Group in Qatar, in
order to offer clients international expertise and a local banking


Coutts & Co launches
charitable account

Coutts & Co has launched the
Coutts Charitable Giving Account, allowing clients to more easily
track donations in monthly statements and claim back tax

A bank spokesman said it operates in the same
way as a regular Coutts bank account, except transactions can only
be made to charitable causes. Mark Evans, head of philanthropy at
Coutts, said every major financial institution would be offering
some kind of charitable giving account “in the not too distant

“Instead of trawling their bank and credit
card statements at the end of each tax year, Coutts clients will be
able to see how much they have given at a glance, creating a bigger
incentive to reclaim the difference between the higher and basic
rates of tax. And what’s more there are no administration fees,”
Evans said.

Clients receive a cheque book and cash card
and are able to make their donations by telephone or online.

“The Coutts Charitable Giving Account is a
valuable new tool from which I’m sure charities will benefit,” said
Martin Brookes, chief executive at consultancy New Philanthropy