Jean-François Genicot, Head of Investments Management at Degroof Petercam and Lea, an architect. Photo Simon Verjus (Maison Moderne)

Jean-François Genicot, Head of Investments Management at Degroof Petercam and Lea, an architect. Photo Simon Verjus (Maison Moderne)

Discretionary management allows you to delegate the management of your portfolio and it’s also a great way to invest sustainably. To find out more, we spoke to Jean-François Genicot, Head of Investments Management at Degroof Petercam, who guided his client towards this solution.

What is discretionary management?

Customers wanting to delegate the day-to-day management of their investment portfolio choose this solution. Discretionary management is when the client gives the bank a mandate for them to act on their behalf according to terms pre-defined in the contract. There are four types of contracts which, to a certain extent, correspond to four different levels of client involvement. First of all, there’s full delegation, as mentioned earlier. The second type corresponds to proactive management advice, whereby the client receives advice from the bank on a regular basis and remains in control of the final decision. With the third, the client intervenes occasionally via their portfolio manager. And finally, for the last we simply execute the client’s decisions. 

Whom discretionary management is intented for? 

It’s aimed at anyone who wishes to delegate the day-to-day management of their portfolio, be it due to a lack of time, interest or even solid experience in the matter. A client’s asset size is one factor that determines the level of management. The strategy for modest-sized portfolios may be exclusively through funds, whereas it may be through funds and direct investments for portfolios of more than one-and-a-half million euros, so as not to be impacted by tariff systems. 

Can you tell us more about your client’s situation?

Our client is a young mother and architect by profession, who had inherited substantial financial assets. She came to us to delegate in a sustainable way her portfolio management so she could fully focus on her family and career. 

As a portfolio manager, what should you pay particular attention to? 

The bank and the client must carefully and clearly define the contract objectives. This enables us to define the client’s risk profile, by asking specific questions related to their overall financial situation, investment horizon, potential risk aversion, as well as their knowledge of financial products. As for the bank, MiFID regulations impose full transparency and that the client has a perfect understanding of the risks involved. The transactions and investments that will be carried out must be fully detailed and in accordance with the defined mandate. Regular communication between the portfolio manager and the client is essential, in order to build a healthy, long-lasting relationship based on trust. It is not uncommon for this trust to span generations. Of course, this shows our ability to identify changing needs from generation to generation.  

What sustainable discretionary management services does Degroof Petercam offer?

Degroof Petercam wanted to shift its offer to qualify for the sustainable discretionary management label and meet the criteria of Article 8 of the recent SFDR (Sustainable Finance Disclosure Regulation). We’re continuing in this direction so as to offer our clients an “Article 8+” or potentially an “Article 9” management approach. Both the portfolio manager and the client must be fully aware of the obligations that this entails. Performance is no longer the sole criteria, as the impact of investments on an ESG (Environmental, Social and Governance) level plays a more important role.

To find out more, contact Jean-François Genicot by email: