Exclusive: Meet the former UBS and JPMorgan heavyweights shaking up private banking
As the economy slowly picks up speed, activity in the city and beyond is starting to pick up again.
This is also the case for Vestrata, a relatively new fintech player that is taking the wealth management and private banking space by storm by integrating machine learning and automated risk metrics.
The company may be a new name in the Square Mile, its management team is definitely not as it consists of some well-known faces in the city and Canary Wharf.
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The seven members of its management team are former executives of some of London’s largest wealth management firms, including JPMorgan, UBS, HSBC and Barclays Wealth Management.
To learn more about this new vehicle, City AM spoke with the CEO of the company, Mark Le Lievre.
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With nearly three decades of experience growing and restructuring investment capabilities, Le Lievre is a former head of the global content management division of UBS Wealth Management, where he was responsible for manager supply. , due diligence and structuring of traditional and alternative investment products, including funds, hedge funds, private equity and real estate.
In addition, he co-led UBS’s sustainability and impact investing initiatives and prior to that he led the product and platform team at private bank JP Morgan, where he oversaw product management. and the implementation of policy and regulatory initiatives globally.
I studied the profiles of your co-founders. All eight of you are former executives of some of the biggest wealth managers, such as JP Morgan and HSBC. What do you plan to do differently when you were with your former employers?
As a startup, we are not encumbered by the complex decision-making processes that accompany a large organization. We leverage our team’s extensive experience in designing and leveraging the capabilities of our platform, and we challenge ourselves to create solutions that directly address strategic barriers to investment, compliance and customer engagement that we have personally encountered in exercising our leadership responsibilities within our former companies.
We recognize that each of our legacy businesses has its own strengths. In building Vestrata’s investment solutions and technology platform, we sought to leverage the best of our former employers, while actively identifying areas that could be improved.
Our prioritization of the execution of senior management responsibilities is particularly relevant given the CFA’s current focus on the first line of defense. We constantly receive feedback from C suite executives confirming that our value proposition is built very distinctly from other solutions available in the market.
Brexit is a fact, the UK has left the EU. Will this have a considerable impact on the wealth management space, especially in terms of risk and compliance? For example, with regard to the customers you serve across Europe or elsewhere.
In the wake of Brexit, the ability of companies in the EU and UK to do business across borders has changed dramatically, creating significant barriers for asset managers and their clients in other jurisdictions. Without a specific license to make doing business in the UK easier, EU businesses are no longer able to function as they once could, and for UK businesses the same is true for every location in the EU.
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How do you see this in practice, on a daily basis?
Well, this is evidenced by an increase in FCA license applications, with over 1000 separate FCA license applications being requested by companies in the EU, just to allow them to do business in the UK so that they can retain and support their existing customers. UK businesses will have to do the same for each country in which their European customers reside. The establishment of local entities and the development of existing frameworks, to comply with the regulatory regimes of several regulators, will be costly and, as such, will have a visible impact on resources and expertise.
And what about current rules and regulatory differences in the future?
Since the UK was subject to MiFID regulations until December 31, 2020, the regulations are still equivalent. Over time we may see an element of divergence, but we expect the UK to maintain a robust regulatory regime with high compliance standards, ensuring that it maintains its reputation as a well organized country. and controlled to conduct investment activities. .
Let’s zoom in on this other headache of the moment, the pandemic. How do the consequences of the Coronavirus impact your sector?
Like other sectors, most wealth management spaces have had to adapt to new working methods, which for some traditional companies have taken longer to integrate into their operating models.
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Fortunately, we are a start-up and as such we do not have a complex existing infrastructure to manage. We operate in a cloud environment and all staff work remotely. Logistically, it was not a challenge for us to adapt.
But what about relationship building and finding new business?
Yes, wealth management is a fun endeavor and human contact plays a vital role in managing and developing meaningful relationships. It is important to be able to spend quality and uninterrupted time with clients to discuss and understand their needs, the needs of their end customers, how our proposal can meet them, the functionality of the platform, the fee schedules, etc. . Doing this in a way that still feels personal and interactive has been a challenge, but it also underscored the importance of accelerating digital transformation in the industry and examining how technology can facilitate rather than hinder this type. Communication.
I assume your clients have faced the same challenges?
Yes, many of our wealth management clients and prospects have themselves been consumed by adapting their ways of working during the pandemic. Their priorities were focused on customer engagement, BAU activity and business continuity. Customers and prospects are re-engaging as we come out of lockdown and they accelerate the overhaul of their strategic business models.
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We expect the industry to take some pre-pandemic approaches to managing the wealth and needs of its customers; Zooming and video calling have been essential, but meeting clients in person always makes a big difference in providing wealth management advice and ensuring client satisfaction.
So less Zoom, more breakfasts?
Ha! The pandemic has taught many operators in the industry how to get tech-savvy, but it has also been proven how critical it is to maintain in-person connections with customers, both in the context of what we do and industry more. widely. But the pandemic has also shown how essential it is for asset managers to have a clear digital strategy, both to boost customer engagement and provide the integrity needed to operate remotely.
Let’s look to the future, life after lockdown, the post-Covid market. What do you think of the recovery process?
The economic impact imposed by Covid means that, unsurprisingly, companies are looking to increase revenue, control costs and maximize efficiency, while trying to stay competitive. As these companies emerge from lockdown, senior management is creatively rethinking their strategic business models, investment solutions and digital strategy, asking themselves: do they have the right mix of products and solutions to meet evolving needs? of their clients, especially in areas such as sustainable investment and private markets? Or, to what extent are their existing business models protected against a market correction?
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What I keep hearing from any investor, wealth manager or asset manager is the changing role of technology and its growing importance. What is the impact of technological developments on your work and on the way you serve your customers?
One of the main trends we are seeing is how the pandemic has accelerated the digital experience and the key role of automation in this context. Prior to Covid-19, the industry generally recognized the benefits of a back office capacity while many were skeptical of the benefits in a front office context.
In fact, the pandemic has opened the minds of many in the industry to recognize how technology and automation can add business and operational value. Our platform is a cloud-based infrastructure, offering a modular model based on a subscription to the asset manager to allow him to access the products and solutions he needs.
We have learned from past experience that the quality of management analysis in most wealth management companies is particularly poor.
The vast majority of wealth managers spend 80 percent of their time serving 20 percent of their clients, resulting in limited client engagement with the remaining 80 percent of clients. We took advantage of machine learning and sophisticated risk metrics to be able to review the wealth manager’s entire portfolio of activities on a daily basis.
Our platform connects via API gateways to the execution systems, books and records and existing CRM systems of the asset manager. Additionally, the capabilities of the Data Lake allow us to model client behaviors, including client propensity to act, and “clients like you” comparisons when providing targeted investment recommendations.
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