International Banker is joined by Mr. Olivier Calloud, Chief Executive Officer of Piguet Galland, to discuss the bank’s strategy, maintaining high levels of customer service during the pandemic and future objectives.
Today, International Banker is joined by Mr. Olivier Calloud, chief executive officer of Piguet Galland, to discuss the bank’s strategy, maintaining high levels of customer service during the pandemic and obviously future objectives. Really good to have you here, Olivier.
Thank you, Simon.
Good. Now, the bank frequently markets itself as a kind of family doctor of its clients’ wealth. What exactly does that mean? And would you say that kind of family-doctor approach has taken on even more significance and relevance since the onset of the coronavirus pandemic?
The family-doctor concept was crafted 10 years ago when we started redefining our strategy to grow in the Swiss financial market. We organized focus groups with potential clients and tried to identify uncovered needs. During the focus-group interviews, very often, participants said they would like to turn to a single trusted advisor who has a comprehensive view of all the aspects of their wealth. It’s when the idea of a family doctor surfaced, a family doctor that can take care of all the financial health of our clients. So, we took naturally that idea on board. And during the pandemic, the idea of the family doctor turned out to be naturally in sync with clients’ fears and expectations.
Very good. Now, you also deliver your services through a strategy called the pyramid of serenity. Explain how that works. And what motivated you to devise that strategy?
So the pyramid of serenity may look like or sound like New Age or guru-like, so I would prefer to describe it as a peace-of-mind pyramid. So, by definition, our clients are relatively wealthy. But very often, it’s not enough for them to feel serene. In the troubled times we are living, there is plenty of reason to stay awake at night: there’s a war in Europe, the risk of disease, the financial health of their companies, the solidity of their marriages, their children’s futures—all of these worries may have an impact on their wealth. And for me, the main financial risk for individuals or families is more divorce than market crash. Okay, we are not marriage counsellors; we are not life coaches; we are not psychologists—we are just bankers. However, we can help our clients to align their wealth with their life projects, and, in doing that, we can help our clients to sleep better at night. And for me, it’s more enjoyable to contribute to the happiness or at least to the peace of mind of my client, or the serenity of my client, and not just to sell financial products. So, to do that, to fulfil that mission, we have developed a specific offer and a specific way to deliver that offer, and that’s the famous pyramid of serenity or peace-of-mind pyramid that comprises three steps: security, quality and close relationships.
Very good. Now, let’s think about the bank in terms of its history. It’s been serving its clients’ needs since 1856. Does the bank continue to value particular constant threads or strategical cultural practices from those early days within the bank and regarding your client relationships that obviously feature so importantly in that strategy you’ve just been describing? Or is the bank of today unrecognizable from where it was when it began?
So, our headquarters are still in Yverdon-les-Bains, which is a small town in the north of Canton of Vaud in Switzerland. Yverdon is the hometown of the Piguet family and where this banking adventure began. We still have clients who are the descendants of a family who started doing business with Banque Galland at the foundation of Banque Galland, so in the last decade of the 19th century. We kept the traditional logo of the Piguet family, the oak leaf. But in the last 10 years, we have considerably modernized the bank just to make sure we are able to face the challenges of our times. And we aim to propose a modernized version or contemporary version of the Swiss private banking with an increase in transparency and professionalism.
Very good. Now, in terms of remaining on top of your clients’ needs—and again, that proximity, that staying in touch with them—how challenging has the pandemic and resulting restrictions been for you? Is it simply a case of having more online and Zoom meetings with clients, or have you devised other effective strategies to maintain regular client contact?
So, to be effective in developing close relationships with our clients, we need three ingredients: first, the right level of information about their needs, their projects, their financial situations; second, the right offer to address those needs and to be able to help them to carry their life projects; and finally, and this is perhaps the most important point, the ability to connect emotionally with the client. Again, we are bankers. We look at balance sheets, at P&Ls, at debit and credit statements. But managing emotions remains a very important part of our job. To do that, all we need, we use all the means available: phone calls, one-to-one discussions, Zoom meetings, invitations to webinars, to social events, birthday cards—everything is important, especially when the environment is stressful and complex. And during the first lockdown, we called all of our clients just to find out if they were doing well, if they were in good health. It was more a call from a friend or from a family doctor than a call from a banker.
Now, you’re talking about how you kind of adjusted to that pandemic. As the CEO, what have you found the most challenging aspects of coping with the pandemic over the last couple of years? And have you learned any lessons that have made you a more effective banking leader today than you were when it all began?
So, the pandemic has been very challenging for organizations and for individuals. But the pandemic has also been a very interesting laboratory to test new management practices. For instance, working from home was not really accepted three years ago in the Swiss banking environment. Now, we have included that flexibility into common work practices. And we are learning how to make the most of this new way of working. We also realise the importance of staying as close as possible to our own employees, especially when, despite the physical distance, we needed to make sure that we kept them regularly informed about the activity of the bank. It was also important to get regular feedback from the team, from the individuals. So, to do that, we had an extensive use of older communication media—conference calls, Zoom meetings, Group WhatsApp, name it. And after the lockdown, a lot of these communication procedures have been maintained within the bank.
Now, you just mentioned WhatsApp, a digital platform that a lot of people have been using. But what’s your opinion of new digital investment-management services, such as robo advisory? Do you ever feel that some aspects of your business compete with robo advisors or other fintech-based investment and wealth-management services?
If our vision were to be the best portfolio manager, we would be competing with robo advisors and fintech companies specializing in investment and wealth-management services. But our business model is not based on investment expertise alone. We aim to contribute to the happiness or at least to the peace of mind of our clients by helping them to carry out their life goals. To do that, we need investment expertise but also great listening abilities and sometimes a psychological sensitivity. I don’t think that robo advisors and fintech companies are ready to deliver this kind of offer yet. I think we have five to ten years ahead of us where human advisory will remain essential for the type of services we want to deliver to our clients.
Now, so thinking about the human aspect of it, how do you ensure that you attract the most talented and skilled wealth advisors in the market? And do you invest significantly in employee training to kind of support that?
Yes, we do, and I think, as a CEO, it’s for me one of the most important tasks to make sure that our company remains attractive. It’s a competitive, a very competitive market, for new clients and for new talented employees. Remuneration is obviously one of the important aspects, but to build a very strong company culture is also absolutely important. We invest also a lot in employees’ training just to make sure we are able to face the challenges of our time and to properly serve our clients today.
Now, in terms of winning client business within an increasingly competitive landscape, how influential is the AA credit rating of your parent company, BCV, the Banque Cantonale Vaudoise Group?
So, our parent company, the BCV, Banque Cantonale Vaudoise, has a very good credit rating and is very regularly classified among the safest banks in the world. BCV is very well managed, and 66 percent is owned by the Canton of Vaud, which enjoys a triple-A credit rating. So, it is a very good credit rating; it’s very important for our clients. We want to offer the best of both worlds: the security of one of the best banking shareholders in the world and the agility and the performance of a boutique, a financial boutique, focusing on one market, Switzerland, and with one mission to be the family doctor of our clients taking care of their financial health. But we use also BCV’s capabilities and resources to improve our offer and the effectiveness of our operation through custody, trading, compliance, and financial administration.
Okay, that was going to be my next question. What other resources do you use, but you’ve answered it already. Now, you frequently stress the importance of building these kinds of long-lasting relationships with clients based on trust, based on that position that you’re quite clearly setting out. What are the most significant ways that the bank creates and maintains high levels of trust with clients? What’s the really good thing at building that trust?
For us, caring communication is key to building long-lasting relationships and to developing high levels of trust. Our clients know that we will be here in the good times but, most importantly, in the difficult times. And to keep this promise, we have defined what we call a service-level agreement that is based on the contractual relationships we have with each client; we have defined the minimum level of interaction we intend to maintain with our clients. And we have developed tools and management reporting to make sure that this service-level agreement is correctly performed and delivered for each of our clients.
Now, you mentioned the focus on Switzerland. What can you disclose about the makeup of your client base in terms of demographics and other characteristics? Are they located globally, or are they mainly based in Switzerland? And are they primarily private individuals or institutional investors? Don’t give away any secrets, but just generally, it would be interesting to know.
So, 80 percent of our clients are domiciled in Switzerland—which doesn’t mean that they all have a Swiss passport. Switzerland is very international, especially Geneva, Zurich, Lausanne. And 20 percent of our clients are institutional investors, mainly pension funds of Swiss corporations. And the remaining 80 percent are wealthy individuals or families. We are also targeting entrepreneurs and independent professionals as clients as well.
Let’s move on to ESG (environmental, social and governance) considerations. Do these frequently come into the bank’s decision-making process when devising investment portfolios for the kinds of clients you’ve just been describing? And have you noticed a significant uptick in customers identifying such considerations in recent years, especially given the global focus on issues such as climate change and social justice?
So, ESG investment considerations come very frequently into discussions with institutional investors and are starting to be considered also by private clients. So, we have developed an offer to address this demand. But building ESG-investment capability is for us—it’s part of a more global initiative we have launched on corporate social responsibility. We have initiated the process to get B Corp certification, and we measure and manage our impact using the B Corp assessment framework. That means that the bank operations are divided into five areas: governance, workers, community, environment and customers. ESG-investment considerations belong to the fifth area, customers, and we are working on that topic. But we are also working on the other areas, like our carbon footprint or the employee engagement. What we would like is not only to have our clients happy but also our colleagues happy, to make our colleagues happy, and to give them a real sense of purpose in their daily engagements with Piguet Galland. So, it’s a very ambitious goal, and the corporate-social-responsibility initiative is a way to achieve that goal.
Okay, so that’s some work in progress. But what are Piguet Galland’s most significant objectives over the next 12 to 24 months? And how do you intend to achieve them?
So, our main objective is definitely to continue to grow in the Swiss financial market. And to do that, we need to continue to reinforce our offer, to recruit the right people with the right skillsets, to continue to invest in our employees and in employee training, in our corporate culture. We have also to build up our distribution channels, physical and digital, to continue to improve our business processes and to get the B Corp certification.
Very good. Now, you’ve been there for 10 years—I think 16 years in total, but 10 years as CEO. What do you regard as your most successful accomplishment as the bank’s leader during those 10 years? And what’s been your single most significant challenge?
My best accomplishment as the bank’s leader during this 10-year period is certainly the transformation of the business model of Piguet Galland, which is now successfully positioned to grow in the Swiss financial market. This profile transformation has been very challenging for the team and for me. Getting our employees on board and implementing the changes required a great deal of energy and conviction. But the fantastic feedback that we have received from our clients convinced us that this strategic vision was right and encouraged us to keep implementing this new business model we have chosen.
Well, it’s been fascinating hearing that story of that transformation. So, it’s been very good meeting you today. Thank you very much for your time.
Thank you, Simon.