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Private Banking - Wealth Management, Behavioral Finance and Investment Solutions

Duration: 3 days
  • Private Banking Strategies, Products and Services
  • Wealth Planning for Private Banking Clients
  • Relationship Management Skills for Private Bankers
  • Behavioral Finance for Private Bankers
  • Asset Allocation and Portfolio Construction
  • Investment Solutions in Private Banking
  • Performance Measurement, Client Reporting, Ethics and Regulation
The objective of this seminar is to give you a thorough introduction to the business of “Private Banking” and a good understanding of how the goals and needs of private banking clients can be met through careful financial planning and “standard” as well as tailored investment solutions.

We start with a general introduction to private banking. We give an overview of the industry and its players and we discuss the current opportunities and challenges in private banking.

We then take a closer look at the wealth planning process. We discuss how the clients can be categorized according to various wealth and personal characteristics and we explain how wealth money should be managed according to the client’s situational profile (economic circumstances, stage of life risk tolerance, tax situation etc.). We also discuss the roles and requirements of financial advisors/relationship managers.

We then turn to the asset management process. We give an overview of traditional and alternative asset classes and their characteristics, and we explain how to build the investor’s portfolio in accordance with capital market expectations and investment policy. We discuss how traditional portfolio theory (quantitative models) and behavioural finance can be integrated in the portfolio construction process. We also explain how financial and human capital can be optimally balanced according to the client’s risk-return objectives and investment constraints.

On day three, we give practical examples of investment solutions that are offered to private banking clients. Such solutions include traditional asset classes - equity and fixed income – as well as alternative investments such as hedge funds, private equity, real estate, derivatives, ETFs and “structured” products. We explain the risk and return characteristics of the products, and we discuss their suitability for private banking clients.

Finally, we explain how investment performance can be measured, appraised and communicated to the client. We also discuss the all-important ethical aspects of investment the advisory/wealth management business.

Day One

09.00 - 09.15 Welcome and Introduction

09.15 - 12.00 Introduction to Private Banking and Wealth Management

  • PB Strategies, Products and Services
  • Growth and Opportunities in the PB Market

Wealth Planning for Private Banking Clients

  • Private Banking Clients
    • Key Characteristics & Know Your Customer
    • Client Requirements and Expectations
    • Client Psychology and Investment Temperament
  • Client Segmentation and Profiling
    • Traditional/New Approaches to Profiling Clients
  • Financial Planning for Private Banking Clients
    • Monitoring the Clients Financial State
    • Risk/Return Objectives and Constraints
    • Preparing the Investment Policy Statement
  • Pension Planning, Tax Mitigation, Family Office and Protection Against Risk (Insurance)
  • Value Proposition
    • Quality, Offering, Advice, Service, Execution
  • Pricing (Private Banking vs. Brokerage)

12.00 - 13.00 Lunch

13.00 - 16.30 Relationship Management Skills for Private Bankers

  • Presentation and Negotiation Skills
  • Other Critical Skills in Sales
  • Adviser-client Relationship and Account Development
  • Identifying Problems in the Client Relationship (Silent Criticism)
  • Work with other Advisory Professionals for the Benefit of Clients
  • How to Assess your Relationship Performance
  • Professional Image and Social Role

Generational Wealth Management, Wealth Transfer and Sudden Wealth

  • Wealth Management in a Changing Landscape
  • Private Banking for Clients of Different Generations
  • Wealth Transfer
    • Roles of Family Members
    • Three Types of Family Governance
    • Implement Family Goals into Asset Allocation
  • Sudden Wealth and other Special Topics

Day Two

09.00 - 09.15 Recap

09.15 - 12.00 The Private Banking Investment Universe

  • Traditional Investments (Overview)
  • Alternative (non-correlated) Investments
  • Art, Wine, Race Horses, Woodland,…
  • Suitability for Private Banking Clients

Behavioral Finance for Private Bankers

  • Behavioral Finance and Its Implications for the Portfolio Choice
  • Heuristic Biases
    • Representativeness, Overconfidence, Anchoring-and-Adjustment, Aversion to Ambiguity
  • Frame Dependence
    • Cognitive and Emotional Aspects
    • The “House Money Effect”
    • Loss Aversion, Self-Control
    • Fear of Regret and Regret Minimization
    • Money Illusion
  • Investment Implications and Strategies for Inefficient Markets
  • Case Study and Small Exercise

12.00 - 13.00 Lunch

13.00 - 16.30 Asset Allocation and Portfolio Construction

  • Goals-Based Investing: Integrating Traditional and Behavioral Finance
  • Basic Strategies for Asset Allocation and Risk Reduction
    • Human Capital
    • Financial Capital
    • Stage of Life Cycle
    • Bequest Preference and Risk Aversion
    • Asset Allocation and Life Insurance
  • Portfolio Construction
    • Pragmatic Approach – the Portfolio Pyramid
    • Constructing Mean-Variance Efficient Portfolios
    • Tactical Asset Allocation
    • Portfolio Rebalancing
    • Stock Picking
  • Case Study and Exercise

Day Three

09.00 - 09.15 Recap

09.15 - 12.00 Investment Solutions in Private Banking

  • Traditional Investment Funds
  • Hedge Funds
    • Hedge funds and their investment strategies
    • Ways of investing in hedge funds
    • Due diligence checkpoints
  • Private Equity
    • Venture funds and buy-out funds
    • Ways of investing in private equity
    • Due diligence checkpoints
  • Real Estate Investments
  • Commodity Investments
  • Derivatives and Structured Products
  • Constructing Optimal Portfolios with Alternative Investments and Structured Products
  • Core-Satellite Investing Using ETFs
  • Carry Trades
  • Investing in Fixed Income Structured Products
  • Strategies for Protecting Principal
  • Investing in Inflation-Linked Notes
  • Case Studies and Exercises

12.00 - 13.00 Lunch

13.00 - 16.30 Performance Measurement, Client Reporting, Ethics and Regulations

  • Measures of Return and Risk
  • Measuring Risk-Adjusted Return
  • Benchmarks and Benchmarking
  • Attribution Analysis
  • Style Analysis
  • GIPS-Compliant Client Reporting
  • Ethical Aspects of Wealth Management
  • MiFID, PRIPS and other Regulation
  • Case Study and Exercise

Outlook: The Future of The Wealth Management Industry

Summary, Evaluation and Termination of the Seminar