The expansion of the management team is logical when Julius Baer's ambitions are considered. But has CEO Philipp Rickenbacher overdone it with the latest reorganization? finews.asia analyzes the restructuring.
1. Increasingly a Big Bank
Naturally, people at Julius Baer, a self-proclaimed «pure play» private bank, will grimace at the big bank comparison since it doesn't want to be a universal provider like UBS. But the ambition to more than double its managed client assets to around 1 trillion Swiss francs ($1.1 trillion) by 2030 requires an expansion of the organization that was announced Monday.
This was done to cater to the many new customers it hopes to gain. Regional departments have increased from three to four, with additional functions created to interact with customers. The expansion of the management team on Monday, especially with two former UBS employees, can be seen as laying the groundwork for achieving that goal.
2. Has Rickenbacher Overdone it?
Given the private bank's ambitions, the management reorganization is logical. Nevertheless, one has to ask whether CEO Philipp Rickenbacher has done the company any favors in the medium term by expanding the management team from ten to fifteen, which, according to observers, is the limit of what can be considered effective management. Looking at the appointments, outsiders wonder whether long-serving executives haven't been «rewarded» for their loyal service.
3. The Collardi Era is Fading Away
Yves Robert-Charrue (image below), one of the last contemporaries of former CEO Boris Collardi, is leaving the company next year. Like Collardi, he was a protege of then-CEO Oswald Gruebel at Credit Suisse and followed him to Julius Baer. He was at times considered a possible CEO, but the Rickenbacher won that race. That Robert-Charrue is moving on could be seen against the background of the company's changes since the financial crisis.
(Image: Julius Baer)
It's rumored that Robert-Charrue had applied for the chief executive post at Zurich-based rival Vontobel, which has gone to the co-CEOs Georg Schubiger and Christel Rendu de Lint. At Julius Baer, his responsibility for Europe, the Middle East, and Africa will be split, having seemingly become too big for a single manager.
4. The Dreckmann Constant
Over the years, the chief operating officer (COO), Nic Dreckmann (image below), has held his own. Considered a technocrat, he was and remains a constant factor in the bank's management, supporting the leadership framework. He is now deputy to CEO Rickenbacher but had to relinquish his involvement in the business with financial intermediaries, which goes to former UBS executive Thomas Frauenlob, who joins Julius Baer and has a seat on the Group Executive Board.
(Image: Julius Baer)
5. The Stormy Domestic Market
Sonia Goessi takes over part of Robert-Charrue's legacy as the new head of Switzerland and Europe. She's a seasoned manager known at UBS for maintaining good contacts with client advisors and with clients directly. The reorganization highlights an area of unrest at Julius Baer that never achieved the necessary sustainability, especially in Switzerland. She has no specific experience in the domestic market, so it remains to be seen whether things will work out with the former UBS executive. Gilles Stuck remains under her as head of Switzerland who, so far, hasn't made much of an impression, at least externally.
6. Middle East Focus
The United Arab Emirates is the current fashion within international wealth management. Dubai, in particular, is attracting wealth managers, private banks, investors, talent, and capital worldwide, and Julius Baer is responding. It appointed highly regarded Rahul Malhotra, who will operate out of Dubai as the new head of emerging markets. He's currently responsible for Global India with clients in and outside India and clients from Asia serviced from Switzerland and Japan.
7. Strategic HR
It's customary for a company of Julius Baer's size to place human resources management at the executive board level. Some 6,900 people work for the bank worldwide, including around 3,600 in Switzerland. With the new relationship managers Julius Baer needs to attract to realize its growth ambitions, it's gaining importance. The reason given for the evaluation is to strengthen the importance of employee management and culture.
The task has been entrusted to veteran chief human resources & corporate affairs officer Guido Ruoss (image below), who has been with Julius Baer since 2008 and has been head of Human Resources for over eight years.
(Image: Julius Baer)
8. Taking Legal Risks More Seriously
Oliver Bartholet already sits on Julius Baer's Executive Board as head of risk. The Group's chief lawyer, Christoph Hiestand, is also joining top management, which is also in line with major banks and can be understood to mean the firm will take legal risks even more seriously in the future.
While, superficially, the risks haven't increased, Julius Baer's name recently came up in connection with a huge money laundering scandal in Singapore and revelations surrounding the funds of a convicted Russian. Hiestand will have to make sure that the institute does leave itself vulnerable.
