Page 67 -

Trade Offs UNBUNDLING BUSINESS PATTERNS

1 The bank serves two diΩerent markets with The Private Banking Model
very diΩerent dynamics. Advising the wealthy
is a long-term, relationship-based business. 1
Selling fi nancial products to private banks is 6 advise intimate 2
personal
a dynamic, fast-changing business. product r&d relationship
marketing wealthy 61
key account
platform
2 The bank aims to sell its products to management custom-tailored management individuals
& families
competing banks in order to increase wealth manage-
revenues—but this creates a confl ict of interest. other product ment services private banks PATTERNS
providers fi nancial private banks
products
personal
3 The bank’s product division pressures advi- brand/trust transaction networks independent
fi nancial
sors to sell the bank’s own products to clients. product ip management sales force advisors
This confl icts with client interest in neutral transaction
advice. Clients want to invest in the best platform transaction
platform
products on the market, regardless of origin. 5
4 The cost- and eΩiciency-focused transaction platform management management & advisory fees
platform business confl icts with the remuneration- hr: r&d 4 3 product & performance fees
intensive advisory and fi nancial products business,
which needs to attract costly talent. hr: private bankers transaction fees

5 The transaction platform business requires › Relationship › Product Innovation › Infrastructure
scale to drive down costs, which is diΩicult to Business Business Business
achieve within a single bank.

6 The product innovation business is driven
by speed and quick market entry, which is at
odds with the long-term business of advising
the wealthy.

!"#$%&'(%)*+(%,,---/1 /012013---2455-67