Review of the 9th International Structured Products Forum 2018 – “Trends in Wealth Management”
The (inter)national structured products world holds its annual meeting in Lucerne. The 9 edition of this traditional sector meeting took place on 5 and 6 September with over 90 guests at Hotel National, offering an attractive platform for views and discussions. Under the motto “Trends in Wealth Management”, SIX and SSPA took proper account of the increasing number of buy-side members and their specific requirements. In addition to general sector trends, challenges and opportunities, the sector specifically discussed the field of asset management.
«The perfect wedding»
In his keynote speech, Frédéric Lamotte, Global Chief Investment Officer at Indosuez Wealth Management, threw light on the interaction between structured products and wealth management. Benefit: the sector is no longer a “fine business.” Things have changed since the crisis. Regulators have made sure there is greater transparency, and clients understand the products better. He is firmly convinced that “the key to success is flexibility, simplicity.” “100% human – 100% digital” is where the potential lies. This is because the human element will always be important in wealth management, in combination with technological advances. Despite considerable challenges at the regulatory level or when it comes to liquidity questions, he sees considerable potential in structured products for modern asset allocation within the wealth management field. This needs to be put to innovative use.
The role played by digitalisation within the industry was addressed by Christian Gattiker, Chief Investment Strategist and Head of Research & Investment Solutions at Julius Baer. Following a market overview, he posed the question “Artificial, yes – but ignorance or intelligence?” – The increasing omnipresence of technology is redefining competitive advantages right across sectors, with big data as the key. The big players continue to dominate the field. “They are securing new sectors, such as for example digital trade and payment transactions, along with digital content such as e.g. video games or even cyber security,” he complained. Gattiker underscored the disruptive character of digitalisation. At the same time, however, he advised caution when it came to the hype surrounding Bitcoin and Altcoin cryptocurrency prices. This is because these continue to be driven by speculation.
In the legal workshop, regulatory challenges were discussed from an (inter)national perspective, chaired by Daniel Häberli, Head of Legal & Regulations at the SSPA. Following this, structured product criteria in the wealth management field were identified by an interactive survey conducted by Committee members Thomas Schmidlin and Sylveline Besson. Knowledge transfer and standardisation are crucial here – topics that the SSPA continually addresses.
We are in the middle of far-reaching changes, perhaps even a revolution in the fintec sector – as Michael Hartweg, co-founder of Leonteq and Evolute, one of the highest-profile fintech specialists in Switzerland explained, drawing upon the example of his wealth management platform. Personalisation is the centre of attention here, as it makes it possible to offer clients individualised and scalable portfolios. “A platform of this nature is a digital one-stop shop and responds directly to client requirements,” declared Hartweg. This is a rising trend. In Europe, only about 26% offer robo advice in the private wealth management field. The respective
figure in the USA is an even more paltry 15%.
“Inside Brussels” – EUSIPA Chairwoman Heike Arbter and General Secretary Thomas Wulf provided insights into a turbulent European financial environment, under the heading of “Trouble ahead”. This is characterised by a looming Brexit as well as parliamentary and commission elections in 2019. They also explained how far we have come at the European level in respect of PRIIPs. At the individual country level, this year’s broad assessment extended over the border to Italy – Dario Savoia, ACEPI Chairman (Italian Association of Certificates and Investment Products) provided an update on “prodotti strutturati” in what in sales terms was the second-largest European market in 2017.