Luxembourg is one of Europe’s leading financial centres for wealth management. The major players in the private banking sector consider Luxembourg to be a prime platform for serving a very wealthy clientele with international assets. The country has a number of solid assets to offer these families, starting with its multiculturalism and multilingualism. There is also its strong socio-economic stability, confirmed by its triple-A rating, as well as a vast ecosystem of players and expertise capable of meeting a wide range of wealth management needs.

A client-centred approach

“From Luxembourg, we can act as a single partner for this international wealthy clientele, in a one-stop-shop, to meet needs that are constantly evolving,” says Eliseo Graziani, recently appointed deputy CEO of Edmond de Rothschild (Europe). “Clients want personalised solutions. They want to rely on partners who can offer them strategies that are in line with their values and ambitions. Today, this means adopting a client-centred approach rather than a process-centred one. As far as we’re concerned, it's more a question of providing a high added-value service than offering products.”

New expectations

The range of wealth management services on offer has expanded considerably in just a few years. Today, clients are turning to Luxembourg for its expertise in asset management, cross-border wealth engineering and its ability to handle specific asset classes such as private equity and real estate. Philanthropy, moreover, is an increasingly important topic, particularly with the new generation of clients. “Over and above the skills that we can mobilise through Edmond de Rothschild, the Luxembourg ecosystem enables us to respond effectively to all these demands. We are able to manage the different situations and issues of our international clients, taking into account the family context. We support them in their thinking and in implementing the most appropriate solutions,” adds Graziani.

Setting ourselves apart

While Luxembourg’s expertise is growing, the approach is also becoming more structured on the customer side. Increasingly, customers are relying on their own advisers, through a family office, to challenge the counterparties likely to support them. “Against this backdrop, clients’ expectations have been heightened. We need to demonstrate our ability to respond to their specific needs, and to put in place the most appropriate solution using our centres of excellence. That’s why it’s important to be able to stand out from the crowd and develop our capabilities, so that we can better convince our customers to place their trust in us,” comments Graziani.

Because they are being challenged more and more, private banking players have to put their best foot forward, “in the manner of a beauty contest,” he explains.

“You have to be able to differentiate yourself, add value in specific areas and specialise,” continues Graziani. “At Edmond de Rothschild (Europe), the value proposition evolves in line with the values and expectations of the family at the head of the company, following strong convictions. This is expressed in the emphasis placed on the impact of investment and in the development of expertise linked to our philanthropic foundations. We can rely on the various branches of Edmond de Rothschild, but also on our ability to set up dedicated funds from Luxembourg or on PE/RE products implemented in house.”

Digital technology and data to enhance relationships

The new generation also has new expectations of the wealth management industry. In addition to a greater awareness of sustainability issues, they also want an experience that is more in line with their digital habits. “Technology should help us to respond more effectively to their expectations, in particular by making better use of data to provide support and a smoother experience,” comments Graziani. “With the important caveat that, in our businesses, digital technology does not replace the human touch. It serves to enhance the relationship. A better understanding of our customers and their expectations, as well as trends, should enable us to respond more effectively to the needs of each individual, by offering products and services that are tailored to their needs.”

Consolidation under way

To enhance their attractiveness and competitiveness, private banking players must continue to invest, and they must do so within an increasingly restrictive regulatory framework. To meet these challenges, they need to achieve sufficient critical mass. “The consolidation of the market has only just begun, as shown by several major transactions that have taken place in recent months,” points out Graziani. “By strengthening the players, we are better able to absorb the new regulatory requirements and also to develop offerings that will enable us to stand out in the market, over and above the services that are common to all the players.”

This article was originally published in .