As Australia’s wealth expands, Credit Suisse plans to be at the forefront of the growing prosperity by opening an on shore private bank. The global bank’s new operation is viewed as a key augmentation to Credit Suisse’s current investment bank and asset management arms, according to Shane Galligan, the bank’s head of investment products and services.
Galligan believes it is an opportune time for Credit Suisse to bring its private bank to Australia as he feels that the wealthy are ready for a more sophisticated offering, such as “comprehensive asset and liability management and individual solutions designed for their needs coupled with global capabilities, delivery and execution,” and want to have that expertise based closer to home.
Apart from getting a slice of the Australian wealth pie, Galligan also feels that the new initiative may open doors to other markets in the region. With Credit Suisse’s onshore private banks currently operating in approximately 50 countries worldwide, Australia is tipped as fundamental to Credit Suisse’s growth plans for the Asia Pacific, where the private banking business is undergoing substantial expansion.
Banking on Differences
“Many private banks in Australia are mere departments of larger commercial or investment banks,” Galligan says. “In contrast, within the Credit Suisse Group, private banking is a principal division, alongside our investment banking and asset management divisions.”
According to Galligan, one of the key differentiators between Credit Suisse and its competitors is its “grassroots up” approach, minus any of the “legacy issues that often hinder growth”.
“It’s as important to know what we don’t do, as to know what we do. What doesn’t drive us is the transactional churn of the client’s portfolio – we are not driven by the commissions and trail model,” he says. Credit Suisse advisers are salaried employees of the bank and fees to clients are charged on percentage of assets under management, with brokerage included in the fee.
“There will always be competitors. In Australia, more so than elsewhere, they’ve grown up out of a more transactional broking style of offer, so we compete with them a little more differently in Australia where we’re building a more holistic private bank,” he says. Galligan also says that Credit Suisse segments its private banking client base in a different way than other banks.
“Segmentation in Australia has often been done along asset lines. They’ve looked at their client and said here’s a client with $5 or $10 dollars – they must need this product. We’ve redefined that and moved to a needs-based model. We look at aspects such as the level of involvement a client wishes to have and whether they value strategic planning and specialist advice,” he says. The advice process also aims to “leverage” the strength of the global bank with local expertise.
“The client gets the benefit of the power of Credit Suisse through its brand reach, strength in its asset allocation processes and quality research capabilities. We then localise the offer by having on the ground specialists that are experienced and knowledgeable in all relevant aspects of Australian investment and wealth management disciplines,” he says.
Any suggestion that conflicts of interest might arise in the form of Credit Suisse advisers favouring the group’s products and services over those of other institutions is quickly rebuffed. “Credit Suisse operates a one-bank model,” Galligan says. “Credit Suisse private banking uses an open architecture platform and has no conflicts with our asset management division. We provide comprehensive advice and a broad range of investment products and services tailored to the complex needs of high net worth individuals globally.”
The Credit Suisse private banking offer will initially be accessible only via Credit Suisse advisers. However, non-attached advisers may be able to access the offer in the future.
At present, the group’s offices are in Melbourne and Sydney, but Galligan says there are plans to have staff on the ground in other major cities.