From tutus to translators to emotional intelligence - this Q&A with William Ladenburg, a Director at Mirabaud Group, had us on the edge of our seats. William unravels the layers of private banking's transformation over the past two decades and reveals the nuanced responsibilities of modern-day private bankers.

Typically, when people think of private bankers, investment portfolios and maximising returns come to mind – is there more to it than that?

Of course, that is a fundamental and crucial part of any relationship we have and if we didn’t do that well, I certainly wouldn’t be sitting here talking to you now.  However, and I genuinely mean this in a positive way before my peers start sending me hateful letters, it is often very hard to really differentiate between a lot of investment offerings.  A huge number of firms do this element very well, as we should, so therefore, as a focal point for the relationship into the bank, my responsibility is to help clients understand what their ultimate objectives are and how we might achieve them.  

I worked as an Investment Manager earlier in my career and I noticed that we were being driven towards more standardised portfolios within our firm.  This is not a criticism and I believe model portfolios have a place for clients whose needs are more straightforward as inevitably that type of portfolio is a product of a firm’s best ideas to fit a particular mould. However, where you have clients with multi-generational wealth, which may include businesses and structures, the nuanced analysis and advice needed to appropriately service their needs and objectives requires a more tailored offering which comes with bespoke portfolios.  However, the reason for telling you this is that once the added value that we used to deliver via a unique portfolio was taken away, I felt I needed another way to really engage and add value to client relationships.

Jonathan Riley from Fladgate commented in an interview you did with him a couple of months ago that he felt he was the ‘greasy rag’ holding together client relationships.  I really loved that analogy and so I tried to think of how I see our work as bankers, and I think we are more akin to a translator.  Why do I say this?  Because we spend a lot of time interpreting what clients are saying and putting that into action.  Often people aren't sure what they want, or what to expect and it is our responsibility to unpick that and articulate it back to them.  Many of the clients we have might find finance quite boring and intimidating and so, going back to the translator analogy, making it simple to understand is perhaps one of the most important skills we require as bankers.

People’s attitudes have also changed when it comes to the impact of their investments.  I appreciate this is the 'mot du jour' but I am not just jumping on the bandwagon.  It is an important point when answering this question as different generations have different objectives with their wealth and maximising returns is sometimes less important to clients than making a positive impact with their money.  With multi-generational families who all have an interest in the wealth, navigating these different attitudes and finding common ground is often one of the most important roles we have.

All this is a rather long-winded way of saying that we need to listen, almost more than anything else.  When thinking about this interview I actually Googled ‘What characteristics do good private bankers have?’ and (slightly worryingly some might think!), financial acumen came up only a couple of times on the first couple of pages.  The most common words and phrases were good communication skills, empathy, approachability and trust.  As I say, the investment returns must be there, but they are by no means the only important factor!

Emotional intelligence clearly plays a crucial role in your client relationships. How did you develop this skill?

Well, I hope my wife doesn’t read this article as I am sure she would happily write in with numerous examples of my lack of emotional intelligence…

Perhaps a big part of it stems from my upbringing. I spent a lot of time growing up with my emotionally intelligent and kind mother and older sisters.  There were downsides to this, like being dressed up in tutus when I was younger but on the positive side, I think it did help me develop more empathy and perhaps a better EQ than I might have had if I had grown up in a family full of boys…  Given my personality, I don’t think it is a given that I would have developed that skill and so I am certain that nurture has contributed significantly to it.      

It's turned out to be an essential skill, especially for some of the clients I have worked with over the years.  I quite often get referred women who are having to deal with financial issues for the first time.  This may happily be the result of a liquidity event or in the rather more depressing situation of a divorce or a death.

You touched on there being a big gap in approach to wealth and investing depending on which generation you speak to. Have you experienced that personally?

Absolutely.  This is one of the biggest shifts I have seen in the past 20 years working in wealth management.  When I first started, the younger generations, the future custodians of the wealth, were very very rarely heard.  I know it is only 20 years ago but the attitude shift since then is extraordinary and definitely for the better.  

When I first started in this industry, we dealt with many parents who felt that it was not necessary to engage with their children about the money.  There was a definite attitude of ‘until they are in charge it is none of their business’.  This is no longer the case and I credit our wider industry here.  I remember speaking to one of my sisters in the early 2000s about investing her pension.  She is a doctor and has always been very interested in sustainability, alternative foods etc and wanted her investments to reflect this.  Promising to do a bit of research for her I could only really find a FTSE4Good index that, at the time, had some pretty questionable companies that qualified, almost certainly because of Governance rather than anything else.  Fast forward twenty plus years and the options are now so plentiful and varied.  I do feel that these developments have driven and sustained a change in attitude that has, in a way, given a much stronger voice to those to whom it matters so much.  

Also, and I seem to be reverting a lot to my family and my own experiences today, but I can remember a family member (who shall remain nameless) saying all of this type of impact/ESG investing was complete rubbish and would never come to anything…

So again, reverting back to my answer earlier, acting as the trusted adviser in the middle of these relationships, acting as the ‘greasy rag’ to facilitate all these conversations is crucial.

What, if any, impact does ensuring all family members are heard have on your clients?

Hopefully, it results in a positive experience.  We all know that the topic of money causes the most ructions in any relationship, especially when it is not openly talked about.  This is the same for very wealthy families as it is for me.  Therefore, the fact that we can get families talking about it is a positive step in a more open relationship in terms of money, but I also hope that this will extend into other areas of their lives too.

I don’t want to come across as a bull in a China shop, but I do think that clients benefit from a direct approach.  As mentioned, money is a really tricky subject and so often one has to say some uncomfortable truths.  Being honest and to the point, and sometimes telling clients things they don’t want to hear often opens up conversations and results in a better long-term experience.  

I now work with people who tend to have significant wealth but when I started a lot of my clients didn’t have millions.  I used to work with retired civil servants in one of my earlier jobs.  Whilst they tended to receive fantastic pensions, when the full salary was taken away, many of them had to adjust their lifestyles and expectations and often I was the one having to tell them that!  I think this training has helped with the type of client I now work with.  As someone once told me to take away some nerves before we pitched to a very famous individual, ‘She still gets up in the middle of the night to pee’… The numbers might be different but the same neuroses, family issues, paranoia, pre-conceptions etc all still exist!

You mentioned that being honest and not always saying what clients want to hear is part of your approach. Can you explain how this has worked in practice and perhaps share a scenario where this honesty benefited the client?

One example springs to mind, and it was a family affair, involving a well-established family business and the resulting wealth derived from this.  The founder was old-fashioned in his views, which conflicted with those of his grandchildren and potential successors. These differences of opinion had caused ructions in the family over a number of years which had grown to the point where the grandchildren didn’t want to share their thoughts as they felt dismissed, and they had begun to drift away from the family as a result. Despite the founder being very keen to keep the business in the family and cement his legacy, he was unwilling to listen to those views which weren’t aligned with his vision, with the grandchildren being frequently told, 'This is not how I built my business' and 'What would you know anyway?' It was, of course, demoralising.  It was at this stage that I was introduced to the family. Despite all the friction, it was clear that the younger generation was more than capable of taking the business forward and, if the transition was done well, it could actually strengthen the family relationships and focus their efforts on how to optimise their wealth for future generations.  

The patriarch had set up family trusts for a significant amount of the wealth and I used this to work alongside their other advisers, including the trustees, to make him realise that the money was not only his and he had a responsibility to all stakeholders and the wider family. Suffice to say, our intervention was rather unpopular, and we were told not to meddle in such matters. It is a long story, but a few years later the family business, investment portfolios and more importantly, the family relationships were all thriving… Although the patriarch never acknowledged that our making a stand was an important turning point, I know the grandchildren and other family members were pleased that we did.

What is the hardest question anyone has ever asked you?

This one…!

And what is a staple question that you always ask your clients to help them open up?

There is no staple question really.  I think the most important thing is not to overwhelm clients with information as that inevitably results in them clamming up.  Most clients will have been referred by either existing clients, or intermediaries such as accountants, solicitors, IFAs or Investment Consultants.  Consequently, they will expect a certain level of expertise and/or due diligence to have been done by the referrer so the information download shouldn’t be necessary.  I don’t think there is a specific question – as I was often told you have one mouth and two ears, use them accordingly. If people feel comfortable, they will open up so that is the crucial approach to start a relationship.    

Conclusion

As can be gathered from our discussion, the role of a private banker extends far beyond managing investment portfolios and maximising returns. William's insights highlight the importance of understanding clients' ultimate objectives, building trust, and navigating complex family dynamics. The evolving attitudes towards wealth and investment underscore the need for empathy, communication skills, and emotional intelligence in fostering long-term client relationships. If you find yourself seeking a private banker or family office who truly listens and understands your unique financial goals, we encourage you to get in touch. We would be happy to help you achieve your objectives and optimise your financial outcomes.

Mark Estcourt

CEO at Cavendish Family Office

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