Douglas Blakey meets Wayne Bossert, vice chair of RBC Wealth Management, to discuss the bank’s strategic imperatives: growing its high-performing asset management business; servicing UHNW and HNW clients in its priority markets; and leveraging RBC’s strengths to bring the best of RBC to its clients
RBC’s wealth management business unit, the country’s largest wealth manager with a leading share of the high net worth market and Canada’s largest fund company continues to pick up award after award with a near monotonous regularity.
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The clear message from Wayne Bossert, vice chairman of RBC Wealth Management is that there no danger of complacency and that challenges remain to achieve the unit’s goals.
One of the world’s top five largest wealth managers, RBC Wealth Management directly serves affluent, high net worth and ultra high net worth clients globally with a full suite of banking, investment, trust and other wealth management solutions, from key operational hubs in Canada, the US, the UK, and Asia.
RBI met with Bossert in the bank’s quiet period, just prior to RBC releasing its fiscal 2015 results: record breaking annual earnings smashing analyst forecasts by becoming the first Canadian company to top the C$10bn ($7.2bn) annual earnings.
RBI: How is RBC continuing to deliver a consistently high performance in its wealth management business unit?
Wayne Bossert (WB): First and foremost, it is a disciplined execution through investment in our people and fostering a culture that delivers the "One RBC" experience through collaboration and a client-first focus.
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By GlobalDataOur relationship managers identify their client’s individual needs and then use a customised, holistic team approach to preserving, building and stewarding family wealth across generations. In doing this we evaluate the needs of our clients across four dimensions of capital – financial capital, business capital, human capital and social capital – and seamlessly coordinate experts from across RBC to meet each need, while maintaining primary responsibility for the client relationship.
As a result, our clients have the benefit of the personalised service from their primary relationship manager as well as the breadth of expertise available to them from specialists across the RBC business.
As a clear market leader in capital markets, commercial banking, and investment management in Canada, we will continue to leverage these strengths and the expertise of our people to bring the best of RBC to our clients and deepen relationships.
RBI: How important are the last two of those four dimensions of capital – human and social?
WB: They have been growing in importance for some time and are becoming a key measure by which ultra high net worth families choose and value their private bank. In today’s highly competitive private banking industry, financial and business capital planning are considered table stakes.
What clients really want is an integrated plan that also addresses their human and social capital needs. In other words, how we can help their family manage inter-generational transition, family governance issues, stewardship of wealth, next generation education, strategic philanthropy and foundations, and more.
RBI: RBC has been making major investments in relationship management technology to help its advisers serve its private banking clients better. Can you give some recent examples?
WB: We’ve just launched a new interactive tool in Canada that improves the ability of our advisers to have a goals-based conversation with their clients. myGPS allows advisers to pull and integrate relevant client data into one place, enabling them to define and prioritise goals for their clients, pursue the most appropriate opportunities, and track progress against milestones.
The myGPS tool is so effective that it has already won innovation award in the 2015 Global Private Banking awards as "Best Initiative of the Year in Relationship Management Technology."
RBI: RBC has been realigning its Wealth Management Business around the globe. What steps have you taken to deliver on this strategy?
WB: We have been refocusing our operating footprint and realigning our international wealth business over the past few years, to better serve and deepen relationships with clients from our priority markets.
We are prioritising our efforts in the regions and countries where we can add the most value to our clients and provide a high level of service for generations to come. Our wealth management international business is focused on building and growing a scalable and more focused business serving high net worth and ultra-high net worth clients from our key operational hubs in Canada, the US, the UK and Asia.
RBI: What about your global asset management business?
WB: Our Global Asset Management business is among the Top 50 global asset managers by AUM, has an investor asset mix of 45% Individual / 55% Institutional client assets, is the largest fund company in Canada and continually recognised for its fund performance.
It has grown significantly through both BlueBay Asset Management and our GAM teams in London and Hong Kong and remains a key focus outside of North America. This business will be a continued focus of our global growth efforts. Internationally, we will look to build investment management capabilities in the US and UK, strengthen our distribution network, and grow our institutional market share.
RBI: Which client segments are you targeting and where will you serve them from?
WB: Apart from GAM, our wealth businesses will primarily serve high net worth and ultra-high net worth clients from our key operational hubs in Canada, the US the British Isles and Asia because we know we succeed best when we leverage and build on the strengths of RBC’s other businesses.
RBI: CEO Dave McKay has spoken of the massive importance of the bank’s investment in digital, with more than five million of the bank’s clients already actively engaged in accessing RBC products and services using online, mobile and tablet channels, a number up by more than 30% since 2012. With major additional investment being made in designing new products and services specifically for digital channels in the coming year, what is the wealth management unit strategy for clients who may prefer to be self-directed and rely less on personal service and advice?
WB: Digital capabilities are increasingly critical to the client experience. We recognise the growing demand for digital engagement, while also understanding that clients value our wealth managers as the centre point of their relationship due to their knowledge of clients, expertise and advice, and ability to offer broader RBC capabilities.
We are investing in digitally enabling wealth managers to enhance their ability to serve clients, and in finding ways to improve the client experience through technology.
RBI: Can you give me some details about your strategy towards millennials?
WB: Our millennial strategy is enterprise wide. We understand that the needs and conversations with this generation are not that much different from generations before but what is different is how we engage them.
They want to do it their way. We support client choice, and believe that this segment, like all of our other client segments, should be able to select the advice and service model that suits them depending on their available time, interest and/or knowledge.
We are empowering them with solutions and focused on delivering a seamless, digitally-integrated, multi-channel experience. Likewise, we recognise their needs will change as they move through life stages. As an enterprise, we want to be ready to help them transition between value propositions as their needs evolve.
City National: a ‘milestone acquisition’ – Bossert
The US is RBC’s second home market which is why it made the strategic decision to acquire City National and create a powerful platform for long-term growth.
Wealth business is an important part of the bank’s franchise, serving 340,000 households in the US.
It is, says Bossert, a ‘milestone acquisition that significantly expands our growth platform in the US’.
With the transaction – RBC’s biggest ever acquisition – having closed in November, the bank’s focus is now on integration to bring the best of both organisations to its commercial capital markets and wealth management clients.
CEO Dave McKay has spoken of City National client growth being exceptional and early progress is being made to launch RBC’s synergy programmes across the bank.
RBC will focus around ‘one client’ the high net worth, ultra high net worth client in the US, putting together its existing US wealth franchise with the City National franchise which serves a very similar customer on the wealth side.
That organising philosophy of one bank, one client is consistent with how RBC thinks about its franchise globally, particularly in Canada and, argues McKay, the results will show up in the consolidated global wealth segment.
Adds Bossert: "This acquisition creates a new leader in providing banking and wealth services to HNW and commercial clients in key US markets by combining our capabilities to deepen client relationships and to serve a broader client base with the aim of being the preferred provider in the US to corporate, institutional, commercial and high-net worth clients and their businesses.
"Together we can offer more expertise, locations, products and services to clients in existing markets, and expand into new high growth markets. We’ve developed a phased rollout of City National private and business banking capabilities to RBC WM-US clients."
CITY NATIONAL AT A GLANCE
- RBC will introduce City National’s full suite of US private and commercial banking products and services to RBC clients – 340,000 RBC US Wealth Management households :204,000 RBC Canadian cross-border clients and 88,000 RBC Canadian commercial clients;
- Enhancing US wealth & asset management platform: combined US-based client assets of C$393bn: brings RBC’s wealth management segment to over C$1.3trn in client assets globally;
- Expanding distribution channels: RBC and City National wealth management products to be serviced by 2,100 combined advisers;
- Deposit synergies: the deal offers RBC the ability to attract additional deposits from RBC Wealth Management and Capital Markets clients and utilise low cost sweep balances from RBC US wealth management as an additional competitive funding advantage to support future loan growth, and
- Future growth initiatives: introducing City National’s private and commercial banking solutions through RBC’s US Wealth Management advisor and client base; Leveraging RBC’s platform and financial strength to increase City National’s market penetration and accelerating expansion into other new high-growth markets through an expanded network.
