Specialist
Former director at Julius Baer Group Ltd
Agenda
- Julius Baer’s (VTX: BAER) competitive positioning vs players such as Credit Suisse (VTX: CSGN) and UBS (VTX: UBS)
- Customer acquisition dynamics on the cold client outreach side, highlighting CAC (customer acquisition cost)
- HNWI (high-net-worth individual) acquisition opportunities
- Gross inflow and outflow dynamics
- AUM (assets under management) and gearing in the current environment
- Growth opportunities and key headwinds and tailwinds
Questions
1.
What’s the current lay of the land for Julius Baer and Swiss wealth managers?
2.
How does Julius Baer stack up against more established players such as Credit Suisse and UBS?
3.
Would you say it’s getting more competitive for wealth managers in the UK and Europe to acquire new clients?
4.
On the cold client outreach side, you mentioned there were 45 people going for each new HNWI [high net-worth individual] that comes to market after they’ve had a liquidity event. What is Julius Baer’s success rate there?
5.
What might be an average CAC [customer acquisition cost] on the cold outreach side?
6.
Do you think the family feel is quite unique to Julius Baer? Do you think the company always focuses on this feeling and building strong relationships first and foremost?
7.
Once you’ve acquired a new client, how long does it take to recoup that cost that you’ve spent in trying to acquire them? Is it 1-2 years?
8.
You said there are four components to acquiring clients – referral dynamics, personal networks, professional advice acquisition and cold approaches. What percentage does each component contribute to Julius Baer’s organic growth?
9.
Has Julius Baer ever considered acquiring high-net-worth IFA [independent financial advisor] portfolios to grow its asset base inorganically?
10.
Do you think some clients are unhappy to be moved if Julius Baer purchased or acquired high-net-worth IFA portfolios? Do you think there’s any leakage in that process?
11.
Could you estimate the split between inorganic and organic growth in AUM [assets under management]?
12.
Do you think Julius Baer would ever look to decrease the minimum account size requirement from CHF 3m if the industry becomes a bit more competitive? Would the company be looking to acquire lower-net worth individuals?
13.
How might net inflows or outflows evolve for Julius Baer?
14.
You touched on Lombard lending, which is a big part of Julius Baer’s business. Are there a lot of synergies between the wealth management and lending sides? Is it quite easy to convert a lending client to a wealth management client?
15.
Rates are starting to normalise, although the ECB [European Central Bank] rate is still 0%. As people can start to earn some normal interest on their capital, can you see this making things higher in Julius Baer and other wealth managers’ outflows, potentially meaning it’s more risk-averse?
16.
Do you think the Russia-Ukraine conflict will have a material negative impact on flows for Julius Baer, and could the potential headwinds in China impact any Asian clients the company is targeting?
17.
How is client demand for asset classes evolving? When you’re offering a HNWI a portfolio, what’s the standard split that you would give them and how is this changing?
18.
Could flows into more alternative investments and PE impact Julius Baer?
19.
How many wealth managers does a client typically partner with?
20.
Julius Baer is more geared to a high-interest-rate environment, so could it be more successful in the medium term than some of its competition? The company estimates that an increase of 1pp in US rates alone could add about 3.5bps to its gross margin, and the US rate has risen by 81bps in 2022.
21.
How does Julius Baer manage its net interest margin so effectively?
22.
What rate does Julius Baer offer clients just for leaving cash with the company?
23.
What are typical fee structures for Julius Baer?
24.
Can you see the current regulatory environment affecting Julius Baer’s offshore business or businesses?
25.
How might growth or focus areas evolve for Julius Baer, or what were these areas when you were there?
26.
What are the key headwinds and tailwinds currently facing Julius Baer?
27.
Is there anything that we have or haven’t touched on around Julius Baer that you’d like to draw particular attention to for our clients?
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