Swiss family offices give shelter to battered bankers
If you want to work in Swiss finance, apply to a family office, not a bank. Family offices in Switzerland, in contrast to the country’s banks and insurers, are growing rapidly, according to Peter Schuppli, chief executive and managing partner of Cottonfield Family Office in Zurich, a firm that services entrepreneurial families in Switzerland and Germany.
Although the term "family office" is not legally protected, such a firm should be independent and act in the interests of the family, explained Zurich-based Jorge Frey, managing partner of Marcuard Family Office, which manages 4 billion Swiss francs in assets for wealthy families in Switzerland, the UK, North and South America, and Israel. "The only source of income is the fee that is paid directly to us by the customer," he added.
Schuppli cited three reasons why family offices will expand for the foreseeable future: First, the global financial crisis has caused many wealthy clients to lose confidence in banks; second, even successful entrepreneurs sometimes needed help understanding complex financial products; and third, using a family office was now a “status symbol”. "We also deal with the banks on favourable conditions that would otherwise only be reserved for institutional investors,” Schuppli said.
Zurich-based headhunter Reto Jauch of Jauch Associates said an increasing number of wealthy families are seeking greater control over their finances. Switzerland, as an established centre for family offices, was well placed to take advantage of this trend, he said.
Family offices are also growing because they offer convenience – a place to consolidate investments under one roof. "If your financial situation gets so complex that you lose track, that’s often when you first start using a family office," Frey from Marcuard said.
Jobs for i-bankers
Family offices needed account managers to execute day-to-day deals for clients, and portfolio managers to make investment decisions, Schuppli from Cottonfield said.
But senior client relationship managers provide the backbone of family offices. Typically aged 40 or older, they have experience in other parts of financial services, in particular wealth and asset management. Investment bankers can sometimes make the switch, too.
"Investment bankers have a chance if they have good business relationships," Frey said. “At a certain age many bankers recognise that their careers aren’t everything. For many, the focus on sales that prevails in banks isn’t for them."
Relationship managers must have good communication and conflict-resolution skills to deal with potential family conflicts. “In contrast to investment banking, long-term customer relationships are much more important at family offices,” Frey said.
There is no shortage of candidates for family-office roles. Frey said he had recently interviewed 17 people for two vacancies. "Very highly qualified professionals are interested in a changing to a family office," he said.
Such offices have a different working style to that of a private bank or investment bank. "Most people who start with us suffer a culture shock," Frey said. “While in a large bank people often work reactively, family-office employees need to be proactive.”
Family offices are typically lean employers. Marcuard, for example, has 25 staff who provide expertise in tax, inheritance, trusts, private equity and real estate. "Our attrition rate in recent years has been considerably lower than in the banks. If one employee leaves of his own accord every year, that's a lot," Frey said, adding that family offices offer remuneration similar to banks’.
Staff at family offices usually have a qualification from The Swiss Training Center for Investment Professionals and/or a postgraduate degree in finance.