How much of what you do in talking to families/owners is
about the specific financial issues in front of them
(transitioning ownership of business, handling liquidity events,
etc) and how much on the supposedly “softer” side
on governance, intra-family relationships, etc?
Wealth and business transfer is a key topic for our clients which requires a long-term approach and planning. Each situation is different and depends on our client’s individual objectives, constraints and decisions regarding the management of assets, investments and projects. Thanks to a global understanding of their private and professional wealth, we help them manage their legacy to preserve the future of their family and business.
On the business side for example, we work with our clients to define the relevant solutions in terms of sales and acquisitions, structuring of investor relations (shareholders agreements, LMBO, FBO), structuring of holding solutions, and restructuring and consolidation of business assets. Governance is also of paramount importance for our clients. Over the past few years, we clearly see a growing influence on the next generation on wealth planning and strategic business decision-making. The role of the younger members of leading families is no longer limited to behind-the-scenes planning and collaboration.
They also take part in leading aspects of the business transformation and are fast becoming key players in modernising company operations, product lines and brand, and more and more they are integrating sustainable practice into their business. Consequently, as reported in our last Entrepreneur and Family Report, 40 per cent of entrepreneurs feel that the priority area where wealth managers could support them is developing the business management skills of younger members. That is precisely what we do in the NextGens programme, dedicated to our client’s children and grandchildren.
Whether they wish to take on leadership roles in their family businesses worldwide or purse their own entrepreneurial passions, it is essential to support the next generation to enhance their financial and portfolio management knowledge, meet financial experts, discuss with opinion leaders and develop their leadership skills. We organised the first “in-person” NextGens event since the beginning of the Covid pandemic last month and it was a great pleasure to meet with this next generation of leaders and discuss topics such as wealth planning, metaverse, circular economy etc.
Within the overall wealth management operation of BNP
Paribas, how important is the area you head up in generating
revenues? Is your segment of the business becoming more important
Globally, BNP Paribas Wealth Management is growing, which is reflected in our very good results both in 2021 and in this first quarter of 2022. We manage more than €420 billion of assets, up by 20 per cent compared with the beginning of the last strategic plan in 2017. Entrepreneurs and families represent around 40 per cent of those assets under management and a growing part of our revenues.
Since 2018, we have rolled out an ambitious development plan in Europe (Germany, the Netherlands) to combine our expertise with those of our colleagues in other businesses. BNP Paribas is already well established in those countries (CIB, real estate, commercial banks) so entrepreneurs can fully benefit from the Group diversified model, which enabled us to gain market share.
Also, the entrepreneurial spirit strengthened during the pandemic, and we support this new generation of entrepreneurs and develop specific expertise to meet their wealth, private and corporate needs. In France for example, we work closely with start-up entrepreneurs; 80 per cent of French Next 40 companies and 75 per cent of French Tech 120 are clients of BNP Paribas.
Other large banks say they work with business owners and
families. What does BNP Paribas do that you would say is
distinctive? What gives you an edge?
Our diversified and integrated model gives us this edge. Because we have all the expertise in the same “house” – wealth management, corporate banking, investment banking, real estate, asset management, we can offer our clients a very distinctive experience compared with players that are more specialised. We also have a very significant global footprint, so we can accompany clients internationally, building on the expertise of all our local teams in the 17 geographies from where we operate.
Can we talk a bit about the domestic French market?
Inheritance law and other laws relating to transfer and control
of assets are different from those in Anglo-Saxon countries.
Are there any specific features of the French market that create
types of work for your firm?
Beyond tax measures that can always evolve and differ from one country to another, there is a permanence in the support we give our clients, in all our geographies, to anticipate their wealth transfer and diversify their portfolio.
I know that philanthropy/impact investing/ESG are
important topics across the whole of the bank. Can you talk a bit
about how your section of the business addresses these areas –
can you give a couple of examples of recent
As impact investing/ESG is a very different topic from philanthropy, it might be clearer to separate the two questions.
Impact investing/ESG: We’re at the forefront of sustainable investing. As I said earlier, we already have a very robust set-up with a central team in Paris and a network of impact coordinators in each of our locations. We integrate sustainability at all stages of the client experience. Our ESG approach is based on a comprehensive customer journey, from the needs’ identification phase to the solution and reporting phase. First, we collect our clients’ preferences regarding sustainable investment via myImpact, a unique tool, based on the UN's 17 Sustainable Development Goals. This first stage, enables us to better understand the causes our customers want to defend. From this “impact profiling," we can help our clients make to right decisions to align their portfolio with their preferences. We have also deployed our own “in-house” methodology.
Thanks to this new rating methodology, clients can identify the level of sustainability of their investments. It measures the sustainability of our entire recommended universe using a consistent approach, with criteria adapted to all asset classes. As such, It allows the comparison of all financial instruments (funds, equities, bonds, ETFs, etc.) in a client portfolio to align their holdings with their sustainability objectives. Employees are also key to this approach so we continue to onboard our teams in this impact transformation process. We have integrated a specific ESG module into our certification programme, mandatory for all our private bankers.
Philanthropy: In 2008, We created a fully-dedicated philanthropy team to support our clients to achieve their philanthropic goals. We help them define their focus, determine their strategy, decide on structuring and operational aspects of their philanthropic structure and choose their financial management. Our deep knowledge in the philanthropic field enables us to support clients to build their network and choose the best solution to achieve the desired outcome.