The Chairman and the CEO of LGT explain what makes the family-owned financial group’s corporate culture special and which trends could prove dangerous for the world of finance.

Your Serene Highnesses, despite what has been a challenging environment for the sector, LGT has been very successful over the last few years. What is your secret to success?

H.S.H. Prince Max: Our strong results show that we have done a lot of things right in the past. We have a clear strategy and have been very disciplined in our focus on private banking and asset management; with the result that we have expanded internationally in both segments. An outstanding team and good processes are prerequisites if you want to successfully implement a strategy, and a certain amount of luck helps too.

H.S.H. Prince Philipp: Our culture also plays an important role in our success. It is entrepreneurial, very long-term in its approach and places our clients at the center of what we do. Our clients sense that, which is something I have observed in numerous discussions with them. Many of our clients are entrepreneurs themselves and therefore prefer to talk about their investments with a bank that is managed by an entrepreneurial family.

Is there a risk that the rapid growth over the last few years could dilute LGT’s corporate culture?

H.S.H. Prince Philipp: Like any company experiencing rapid growth, that is certainly something we have to be mindful of. Having said that, the past has shown that we are able to grow without losing our cultural identity.

«The financial services industry plays an important role in the allocation of capital within the economy»

H.S.H. Prince Max: Our culture is based on clearly defined values and conduct that are important to us and are in line with our long-term goals. I think this has been an important factor in terms of our sustainable growth and the successful integration of our acquisitions. Before we hire new employees and teams or make an acquisition, we always have to ask ourselves whether or not the cultural fit is good. And it goes without saying that our culture is something that we always foster and further evolve.

LGT’s commitment to sustainable and impact investments is noteworthy. As a financial services provider, does LGT have a particular responsibility in this area?

H.S.H. Prince Max: The financial services industry plays an important role in the allocation of capital within the economy. The economy can only develop successfully if a sustainable approach is taken to this allocation. In the past, environmental and social factors were not sufficiently taken into account. In order to address the environmental, societal and economic challenges of our times, investment processes must be adapted and improved accordingly.

«We want our clients to see that we are committed to certain values»

That is why at LGT, we assess the companies we invest in not only according to traditional key financial figures, but also their management principles and conduct toward employees, the environment and society, the so-called ESG criteria. After having worked with our institutional clients on integrating ESG criteria into the investment process for a number of years, our private clients are now also benefiting from this expertise. The LGT Sustainability Rating that was launched in 2017 helps them invest sustainably.

H.S.H. Prince Philipp: Long-term thinking and actions have played an important role in the financial success of our family for many generations and are therefore also part of the LGT identity and culture. We want to ensure sustainable value creation for our owner, but also for clients and employees, as well as society and the environment. The LGT Sustainability Rating is a good example of how we take responsibility: by creating greater transparency about the sustainability of investments and providing suitable investment solutions.

In the wake of the financial crisis, banks were accused of not focusing enough on values. Is the motto of LGT’s new campaign «Values Worth Sharing» a reaction to this?

H.S.H. Prince Philipp: We want our clients to see that we are committed to certain values – even if they might not share the exact same set of values. We want to trigger a dialogue about which values, conduct and convictions underlie our collaboration with clients. Another important message is that LGT stands for something and advocates for its convictions. As the representative of the owner family, this also means that we cannot walk away, nor do we want to, if LGT is faced with challenges. That is another important component of the stability and continuity of our company.

«We will face even larger political challenges»

H.S.H. Prince Max: Our family history, which spans over 900 years, has shown time and time again that it is important to share, cultivate and pass down values – in particular also non-material values – from one generation to the next. Many wealthy families and individuals face the question of how to best go about defining, sharing and passing on values both in terms of themselves and their families. We want to share our experience with our clients, but we also want to learn from them.

And which issues will you and LGT be focusing on most intensively over the next few years?

H.S.H. Prince Max: The last ten years were characterized by the strong and certainly in part necessary reactions to the last global economic crisis. These were driven primarily by financial regulators and central banks. I expect that we will continue to see a changing and dynamic environment over the next ten years, but I suspect that the main drivers thereof will be different. My guess is that technological developments will further accelerate, reactions to the mounting environmental problems will become stronger and that we will face even larger political challenges, which are already being foreshadowed by the rising social and political polarization.

«There are a number of unfavorable developments that are likely to concern our society»

H.S.H. Prince Philipp: There are a number of unfavorable developments that are likely to concern not only us as a bank, but also investors and society as a whole. These include government debt, which is still much too high in many countries, and the issue of the financial viability of our current pension system. I also see a danger of overregulation in the banking sector if well-intended rules for the protection of the system and investors prove not to be differentiated enough, or even worse, to be counterproductive.

The Princely House of Liechtenstein: The line of descent of the Princely Family of Liechtenstein began with Heinrich I of Liechtenstein (1216–1265), who was given freehold ownership of the baronial estate of Nikolsburg in South Moravia from King Ottokar of Bohemia. In 1699, Prince Johann Adam I acquired the Lordship of Schellenberg, followed by the county of Vaduz in 1712. In 1719, the territories were united and elevated to the status of Imperial Principality of Liechtenstein. Today, the Principality of Liechtenstein is a constitutional monarchy and sovereign state at the heart of Europe. As the head of the Princely Family and also the head of state, the reigning prince exercises sovereign authority together with the people. The Princely Family is active politically and pursues numerous business activities. It is a keen advocate of the arts, sciences and social welfare.