Why Former Private Banker Urs Brutsch Started His Own Independent Wealth Management


Why Former Private Banker Urs Brutsch Started His Own Independent Wealth Management

In this interesting conversation, we have Dominic Gamble, CEO of WEALTH to ask Urs Brutsch, co-founder of HP WEALTH MANAGEMENT on the inspirations and thoughts behind his business.

Published on 10 March 2016

There is much discussion around independent wealth managers as the future of wealth management for the ultra high net worth individual. Dominic Gamble, CEO of WEALTH sits down with Urs Brutsch to ask him what motivated him to start his own business, HP Wealth Management, after having worked at global institutions his entire career.  If you are a client of a private bank you’ll be particularly interested in our frank discussion about private banks!

Interview with the Entrepreneur behind the brand

DG: Urs, thanks for joining me for a coffee. Tell us why you started an independent asset manager, HP Wealth Management?

UB: I have been in private banking my entire career, in fact literally from walking out of school I joined the apprenticeship program in Switzerland at Credit Suisse.  After completing my studies in banking and finance I was very quickly moved out to Asia and never looked back, I have been here in Asia for nearly 30 years.

My passion is on the relationship side of the business, and together with Stephane and Michael, my partners at HP Wealth Management, we make a great team.  After Credit Suisse I moved to ABN Amro and then Clariden Leu, always based in Singapore. The wealth management landscape changed so much. Not least we experienced many crises in Asia such as SARS and the Asian Financial Crisis but also the evolution of private banking over time.

Asian clients go on trust and it can take time to build trust.
Private banks have abused that trust and it will take years to rebuild.

DG: Private Banks aren’t known as hot beds of entrepreneurialism, how did that environment inspire or prevent you from starting your own business?

UB: I had known I wanted to start my own business since the mid 90s and in 1999 I almost made the leap. Thank goodness I did not make the move flippantly as I continued to see and experience a huge amount in the subsequent years that gave me a more rounded base to launch HP Wealth Management.

DG: So what was the trigger to starting HP Wealth Management?

UB: The sea of administration within the large organisation was already rising and combined with the practices in the market around mis-selling and product pushing led me to believe that there must be a  better way to deal with wealthy clients.

Private bank vs independent asset manager

DG: What exactly is going wrong at the private banks in your eyes?

UB: They are under pressure to make revenues.  All targets and metrics ultimately point to that because they have shareholders and, in many cases, a share price to uphold.

That simply isn’t in the interest of clients because the bank will try and make revenues by consistently selling products and structures, irrespective of the client’s attitude, understanding and risk appetite.  I’m afraid that ‘milking the client’ is all too prevalent and it’s relentless – a sale always needs to take place. The pressure on the Relationship Manager is enormous.

DG: So who is your typical client and why are they better with you than at a private bank?

A Typical client is an Ultra High Net Worth Individual or a family. The UHNW is almost always unhappy in a private banking relationship. They may have had a liquidity event, such as selling a company. Often they explore whether to have a family office but when they meet us they realise that outsourcing the investment, administration and professional services makes far more sense. As we often say ‘we used to work for banks with clients, but now we work for clients with banks’. If a client understands this, he is sold on the concept of Independent Asset Managers.

In many cases the private bank has drastically underperformed in terms of service,may have over charged for their services and the clients have realised that the products that were sold were more often than not unsuitable.

DG: What’s your investment philosophy at HP Wealth Management?

Bear in mind we are led by capital preservation. Clients don’t use us to become rich,  they come to us once that wealth has been made in their businesses. We are usually lead by discretionary mandates. We sit down with clients and really understand their needs and perspectives.  The key in our minds is asset allocation – getting the asset and currency mix right for the clients’ risk profile.  With a long-term perspective and a focus on wealth preservation. In today’s environment you cannot afford to think short term. You have to establish a long term goal and stay the course while adjusting your asset allocation tactically along the way. Everything else is for gamblers, which is not our philosophy!

DG: What are your plans for the business?

We have been going strong since 2009 and we want to continue that but world domination is simply not in our ethos. We might ultimately  hit 20 staff in the next year or two. Beyond that we have no immediate plans and we always want to maintain our boutique style and size.  Focusing on the Asian family and their needs is at the core of everything we do.  With my partners we bring a huge amount of wealth management experience to the table, which is especially valuable for families who need a wide range of wealth services.

We’re very conscious of the need to keep with the times on technology.
That said right now the typical UHNW is not a 20-year old social media go-er.
The need for a high-technology touch point is not yet desired by our clients.

DG: Urs, many thanks for joining me today and for letting us understand more about what an independent asset manager does.

For any readers wishing to have a chat with Urs about wealth preservation or more on HP Wealth Management simply drop us a line here and we’ll help arrange for you to have a conversation.