AP Private | May 2023
Elective affinities, that is the mutual attraction between two or more people with common interests and tastes, are the core of any personal relationship.
Likewise, the relationship between bankers and clients is driven by elective affinities. With one substantial difference: the core of their relationship is money and the projects connected to it.
In fact, money is almost always inextricably linked to the life projects, time horizon and risk profile of the owner.
There are four dimensions to the relationship between private bankers and their clients.
The first two dimensions concern the client: the extent of the mandate /responsiveness with respect to investment decisions; self-confidence and trust in their own ability to make the right choice.
The intersection of these two dimensions produces four types of private client: the delegator, the partner, the controller, and the main character.
The delegator tends to feel a sense of fear and insecurity with respect to investment decisions, mitigated by a strong mandate conferred to their private banker, who acts as reference point and problem solver. Indeed, lately, the sense of anxiety and insecurity, the fear of making the wrong investments decision have been growing.
The partner recognizes that their level of expertise is not particularly high; however, they deal with decision-making with a positive and calm attitude. In this particular instance, it is important to maintain an open and collaborative attitude with the private banker, who acts as a reference point for discussing, asking for advice, receiving suggestions and updates.
The controller is driven by insecurity concerning asset management, today more than in the past. Their sense of insecurity is assuaged by taking control of decisions, management, and performance. Thus, the private banker acts merely in support of the decision-making autonomy they wish to defend.
Finally, the main character wishes to be at the center of their investment decisions: they tend to share a high level of self-confidence and higher propensity for proactivity (research of opportunities, monitoring performance etc.) and for decision-making autonomy (choosing strategies and products). Here, the private banker acts as a discussant, an incentive, and a challenge in the realm of the definition of strategies and investment decisions.
The other two dimensions concern private bankers, who can be classified according to their proactivity and ability to work as a team – there are strikers, midfielders, and defenders.
Strikers tend to be proactive and resourceful with both old and new clients; they are autonomous and tend to be more inclined to work on their own.
Midfielders are good managers of acquired clients, but also proactive when it comes to new clients; they tend to prefer working as a team, where they often play the role of leaders.
Finally, defenders are good managers of acquired clients, however they are little proactive in relation to new activities, less autonomous and resourceful.
The right combination between clients and private bankers produces a huge advantage for all stakeholders involved: clients, bankers, and banks.
Nicola Ronchetti