Interviews with a dozen people familiar with Pictet’s private-wealth arm reveal a business at a crossroads, confronted with the reality that, in order to stay ahead, Switzerland’s preeminent private bank must adapt. That means embracing more risk and changing the client relationship — away from the concierge-like approach that endured for generations toward a more transactional model. [...]
The challenge facing the partners is that in order to grow, they need to aggressively target Asia, the epicenter of wealth creation. But that requires the embrace of new — and potentially riskier — investment assets, chief among them structured products, which use derivatives to track the performance of an underlying asset. [...]
Suddenly, Pictet was forced to reckon with its haphazard organization that often put personal relationships before a systematic structure. Until then, it wasn’t unusual for bankers to act independently with no uniform approach to clients, for example sending out correspondence using their own fonts and letterheads. Among historic quirks, some employees didn’t have a formal work contract — joining the bank was a social compact with a benevolent patriarchy holding a protective hand over its flock.
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