Day One
Introduction
Developments in the Private Bank & Wealth Management Sector
· Up-Date on the latest trends and developments of the wealth management sector
· Wealth Management after the Credit Crunch and Financial Crisis:
o Analyzing the changes in client’s preferences, expectations, and needs
o Sector’s priorities and challenges
o Examining asset class risk and expected returns after the financial crisis
o Impact of the global changes in the legal and tax framework
o Determining new risks and new opportunities: redefining our business
· Global credit risk issues: the return to default and restructuring scenarios
o Redefining sovereign risk, corporate risk and bank risk
· Planning our growth strategy for the recovery phase avoiding new bubbles and managing investment risk
Session 1
Analyzing Your Private Banking Business Strategy
· The objectives of Private Banking and Wealth Management
o What is to be a Private Banker and a Wealth Manager?
o Differences and similarities between managing wealth and Private Banking
§ Redefining money, capital, and wealth
· Evolution and trends in the Private Bank and Wealth Management sector
o From selling banking products to becoming a financial advisor
o From investment advisor to a holistic wealth management
o What do you offer to the client?
· Examining the growth strategy: how does the industry grow?
o Planning or growth: what are the alternatives?
o Which one is more cost effective and lasting?
· Market growth and brand differentiation
o Stages of brand positioning in the market place
o Competing with family offices, independent consultants, franchises and representative offices, investment bankers, asset mangers, and brokers
· Product offering and cross-selling capabilities: integrating with other areas
· How does the client view your products and services?
· The On-Shore and Off-Shore business
o Global needs demand off-shore advisory even to domestic banks
· Analyzing our business: do we focus on transactional banking or advisory services
· New players in the market
o Competing with non-financial and non-banking firms.
Discussion: Delegates will analyze the characteristics of their business strategy (their firm’s business goals and their personal growth objectives) determining what improvements, changes, and new concepts can be implemented in their dad-to-day activity
Session 2
Defining and Understanding the Private Banking Client
· Client Profiling
o Common approaches to profiling and segmentation
o A realistic and practical approach to Profiling
o How do we use it and what benefits does it provide?
· How client needs are changing and increasing client sophistication
o The emergence of new classes of high net worth individuals
· Identifying and understanding the key diagnostics
· Client profiles and investor behavior
o How do we classify our clients?
o Do we have the needed information to satisfy needs?
· Segmentation and profiling are key to good Client Relationship Management
· The life cycle of the client
· How do we spend our time as Wealth Managers and Private Bankers?
o Planning the use of time effectively in the pursue for business results
Discussion: Delegates will analyze if their profiling system and methodology has helped them in knowing who their client is, where can the client be found, and how to approach the client considering their buying preferences, needs and requirements.
Session 3
Understanding Client’s Expectations
· What do we know about our client’s expectations?
o How did the expectations originate?
o How do we monitor expectations?
· The sources of our client’s believes
· Who does the Client say we are and who does him or she expects us to be?
· Matching our firm’s business strategy with our client’s expectations
· Why clients work with us and why do they leave?
o Clients’ motives for seeking our services
o Comparing clients’ needs with our business focus and strategy
· The communication strategy with the client is a corporate effort
· Standards of Quality of the Private Bank
· Measuring levels of satisfaction
o How do we monitor satisfaction?
Session 4
Knowing Our Client: What we know about our clients and what should we know?
· What do we know about the client?
o Determining what information we need to know
· Listening to the Client: a new approach to satisfy client needs
o Gathering the information that tells us what the client wants
· The Questioning Process: types of questions we can use
o Open, Probe, and Closed questions
· Concepts, differences, and strategic use in conversations with clients
o Need and Reinforcement questions
· Concept and strategic use of reinforcement questions
· Need and Reinforcement questions to show clients why they need our services
· Defining the essential information we must have during the selling process
o Understanding all the variables in the client’s decision making process
Exercise: Delegates will receive different information on potential clients and will engage in a role-playing exercise to practice questioning techniques in order to obtain as much information as possible form the client. The Course Director will guide, assist and provide feed-back and recommendations on the effectiveness and style used by the delegates in order to obtain the needed information from the client.
Day Two
Session 1
Using Behavior Finance Concepts to Manage Client’s Expectations and Needs
· Recognizing cognitive heuristics in our decision making process
o The case of efficient markets with irrational investors
· Comparing the client’s believes and expectations with ours
o Identifying clients’ biases, anomalies, inefficiencies, and illogical behavior
o Examining the Private Banker’s biases and anomalies
· Using Behavior Finance to Know and Understand the Client better
o The significance of the “Prospect Theory” and “Framing” in achieving client’s satisfaction in Private Banking and Wealth management
o Managing and spotting Loss Aversion in our clients’ decision making process
o Analysis of the main Behavior Finance anomalies:
· Anchoring, Regret, Overreaction, Herd Behavior, Winners Curse, Gamblers Fallacy, Overconfidence, Equity Premium puzzle, and other several erroneous believes and assumptions
o Managing and spotting anomalies and cognitive errors that influence our client’s decision making
· Behavior Finance ratios and market indicators
· Managing the client’s cycle of emotions and cycle of bubbles
· Integrating traditional, quantitative, and behavior finance managers styles
Exercise: Delegates will analyze how to use questioning and behavior finance profiling to determine which anomalies their clients possess, and plan how they can manage them to achieve client satisfaction.
Session 2
Testing Your Persuasive Language and Actions
Exercise: Delegates will conduct an exercise consisting of 60 to 90 seconds maximum presentation, in which they have to communicate to a potential client why they should be consider as their services provider. The presentation can have the form of a commercial spot, written communication, or personal conversation.
· Delegates will receive throughout the session feed-back from the Course Director on the persuasiveness of their language, the effectiveness of their communication, and on the way they gain commitment from the client
· Differentiating Benefits from Features
o Essential in communicating what the client wants to hear
· Analyzing why the client buys from the services provider
o Understanding why the client would buy from us
Session 3
Analyzing different Client Personalities
· The 4 Quadrant Personality Theory
· Analyzing different Clients’ Personalities and Styles
o Communicating with different personalities and styles
o Presenting solutions to clients according to their style and personality
o How to close deals with the different client styles and personalities
Exercise: Delegates will conduct a role-playing exercise with the Course Director in which they have to identify different personalities and styles, and decide which communication style they should use in order to present their business proposal with positive results.
Session 4
Managing Rejection and Deal Closing Techniques
· What the client expect from our proposal
· Understanding the objection and its type: the step to reversing the situation
o Types of objections
o Reasons for the objection
o Transforming an objection into a new solution
o Objections can present new opportunities to satisfy client needs
· Analysis of different techniques and strategies for deal closing
o Deciding when and how to use each technique
o Different clients and different styles demand different closings
Exercise: Delegates will form small groups (2 to 4) to practice objection handling techniques, so that they can become comfortable when countering rejections and objections. The Course Director will guide and assist delegates providing feed-back throughout the exercise.
Exercise: Delegates will conduct role-playing exercises to practice deal closing styles and techniques based on different clients’ personalities and preferences. The Course Director will participate in the role-playing as a potential client (changing personalities, styles, and needs). The Course Director will assist, guide, and provide feed-back on how the delegates counter objections and attempt to obtain commitment from the client.
Day Three
Session 1
Earning the Role of a Trusted Advisor
· Types of Needs:
o Psychological, Economic, Family, Social, Moral, Spiritual, Growth, etc.
· How do our services satisfy the Client’s needs?
o What products and services can we put together?
o Classifying the types of benefits we provide to out client
· Analyzing the benefits to the client and to our firm of our products and services
o Do our products offer a win-win relationship with the client?
· Managing the client’s perception of our added value
· Definition and characteristics of advisor
o Degree of development of the relationship with the client
· The organization’s objectives and style vs. the client’s objectives and needs
· Defining the nature of our actions:
o Sales oriented
o Technical-skills oriented
o Flexible tailored solutions
o Niche oriented
o Advisory services oriented
· Developing an action plan to consolidate our relationship with the client
o Deciding on three things we want to change right away
o What will we accomplish by doing this?
· Defining the next steps in our Client Relationship Plan
Exercise: Delegates will determine what steps and actions they need to implement in order to initiate, improve, or consolidate their role of a trusted advisor with the client.
Session 2
Controlling the Client’s Investment Portfolio: Measuring and Managing Investment Risk
· What is risk and what are its sources?
o Different types of risk
· Risk and uncertainty
o How do we measure and mange investment risk and uncertainty?
· Quantitative Modeling
o Which ones are most commonly used
o How useful have these models been?
o What tools are frequently used to measure risk?
· Contributions and relevance of Modern Portfolio Theory to risk measurement and risk management
o The limitations of models using mean variance and expected return variance
· The importance of Post Modern Portfolio Theory in matching the client’s risk profile
o Understanding and measuring Down-Side risk – What is risk for our client?
o Recognizing investment risk according to the investor’s goals
o Risk below the client’s Minimum Accepted Rate
o Managing expectations with down-side volatility
· Value at Risk (VAR): The concept of the maximum amount that can be lost
o Why can we lose more than VaR calculations?
o Conditioning Value at Risk to correlation
· Calculating the Required Rate of Return for Risky Assets
o The essence of the Capital Market Theory and the Capital Asset Pricing Model (CAPM)
o Using the CAPM to spot undervalued and overvalued assets
o Using Beta as a risk measure and its limitations
o Expanding the concept of risk in our quantitative calculations
· Incorporating additional risk factors using the Arbitration Pricing Theory
Exercise: Delegates will analyze in an Excel spread-sheet, provided by the Course Director, the effects of positive and negative asset correlations when measuring total portfolio volatility
Case: Delegates will examine in a practical case the differences between asset total volatility and the down side volatility which impacts the client’s Minimum Accepted Return.
Session 3
Measuring Investment Performance
· The difference between Return and Efficient Performance
· Examining the risk-return equation
o Is the return we make commensurable with the risk we take
· Adjusted Risk-Return measures to evaluate a portfolio’s performance
o Sharp ratio, Treynor ratio, Sortino ratio, and Jensen’s Alpha measure
· Risks and rewards of capturing Alpha
· The immeasurable side of risk-return
· Understanding the Efficient Frontier Concept and Efficient Portfolios
Exercise: Delegates will compare the returns and risk indicators of different portfolios in order to determine which portfolios performed better and were more efficient considering different risk profiles.
Day Four
Session 1
Products and Services aimed at building lasting long-term relationships
· Products that can build lasting long-term relationship
o Using products to obtain commitment from the client
o Evaluating the focus of our products and services
o Reasons why clients decide to stay and to leave
· The product structuring process aimed at the client’s needs
o Products flexibility and open architecture
· Implementing a holistic approach when managing relationships
o Obstacles to achieving this goal
o From selling banking products to wealth advisors
o Financing the client’s business and personal needs
o Wealth continuity through legal and tax planning
o PICs, Trusts, and off-shore companies
o Satisfying the personal needs of the client
· Integrating third-party products in the product offering
· Providing long-term solutions and specific benefits to the client
o Can the client perceive the benefits of our solutions?
Session 2
Using Alternative Investment Products Strategically
· Product Differentiation: what are the unique benefits of our product offering
o Is it the product or the banker that differentiates the organization’s brand in the market place?
· The universe of investing opportunities: the problem of a standardized products
· A Strategic look at the world of Investment Funds: risks, benefits, and limitations
o Alternative Funds and Specialized Funds
o Analyzing fees, structures, strategy and benefits for the client
o Exchange Traded Funds
§ New Developments and concepts
§ Using Index Funds in Asset Allocation
§ Hidden risks and issues of ETFs: Changing world with changing risks
§ What to expect in terms of performance and risk
o Hedge Funds
§ What is their nature and what are they in practice?
§ Risks, warnings, and limitations of hedge funds
§ Understanding the styles and strategies used by Hedge Funds
§ When and how to use them in the client’s portfolio
o Private Equity investments for sophisticated clients
§ Benefits and Limitations of Private Equity
§ The rational of private equity in the client’s portfolio
o Structured Products
§ Rational and uses of Structured Products
o Using Derivatives in Private Banking and Wealth Management
§ Objectives and uses
§ Control and efficient implementation
§ Legal issues when using derivatives
o Investing in non-traditional assets: commodities, real estate, collectibles
· Equity Investments for Private Bankers
o Advising the client on equity value, growth, and timing
o Equity ratios and multiples: value, growth, efficiency, financial, and risk ratios
o Cash-Flow Discounted Methods vs. Relative Valuation Methods
§ Low prices are not an indication of great value
Case: Delegates will analyze the performance, fees, vehicles, styles, and strategy of different Alternative Funds, in order to choose the ones that would most efficiently match the risk profile and needs of specific potential clients.
Case: Delegates will analyze market ratios and multiples of a group of stocks, in order to determine the ones that offer more value and more growth potential.
Session 3
Asset Allocation for Private Bankers: Styles and Strategies
· What is Strategic Investing and what are its benefits?
o The Process of Strategic Investment
· Setting measurable and achievable investment objectives
· Investment expectations and economic realities
· Strategic and Tactical Approaches
o Uses and characteristics
· The Integrated Approach for Private Banking and Wealth Management
· Investment Styles and Strategies
o Macro economic Top-Down Allocation
o Concepts, practical uses, and strategies
o Microeconomic Bottom-Up Allocation
o Concepts, practical uses, and strategies
o Fundamental vs. Technical Analysis
· The Importance of technical analysis in decision making
o Concepts, practical uses and strategies
o The benefits, limitations and considerations of both styles
· Choosing between Passive and Active investment styles
o Benefits, limitations and considerations of both styles
· Investment Strategies
o Buy and hold, Market Timing, Growth, Value, GARP, Quality, Income, Cost Averaging, Contrarian, etc.
· The pros and cons of Growth and Value approaches
o Implementing the concept of GARV or GARP
· Market timing – market momentum and sentiment
o Technical Analysis – charts, volume, averages, ratios
o Practical uses of technical analysis
o Incorporating technical analysis in tactic strategies
· The effect of time horizon in asset allocation
· Portfolio Rebalancing
o When to rebalance and how should we conduct rebalancing
o The benefits and the cost of not rebalancing
Discussion/Exercise: Delegates will determine the steps they need to follow in order to define clear achievable investment objectives for their clients, and the styles and strategies that they should implement to achieve these investment objectives.
Closing Session
· Brief questions and answers session
· Course Director’s recommendations and summary
· Analysis of additional training needs
Course Valuation on behalf of the delegates