"It is precisely in times like this that we must not lose sight of the basic objectives of one's investment choices" and this is why "the relationship of trust between client and private banker" is essential. And it is with this management philosophy that Tommaso Corcos, a leading top manager of the financial community in his dual role as Chief Executive Officer and General Manager of Fideuram-Intesa Sanpaolo, has also crossed the stormy sea unleashed by the pandemic in the world of savings and finance. Private Banking and Chairman of Assogestioni. The results – as Corcos explains in this exclusive interview with FIRSTonline – are proving him right. And ad horas the path could be further embellished with the purchase of the Swiss asset management bank Reyl Bank: in this way Fideuram, which will discuss it on Monday in the board of directors, would double its assets under management in Switzerland in one fell swoop. It is no coincidence that Corcos raises the problem of dimensional adaptation of the entire sector. Let's listen to it.
Doctor Corcos, what effect has the pandemic-related recession had – and is it having – on Italian savings?
“The health emergency has brought with it significant impacts from both a social and economic point of view. The volatility of recent months, the sharp decline but also the subsequent recovery have confirmed the importance of correct financial and equity planning and compliance with each customer's risk profile. It is precisely in times like these that we must not lose sight of the basic objectives of our investment choices".
You became CEO of Fideuram - Intesa Sanpaolo Private Banking right at the beginning of the lockdown when there was widespread fear in the financial industry that fear of the pandemic could lead savers to postpone consumption and investments and to save more, but not necessarily to value savings with adequate financial investments. Was it really like that?
“In difficult contexts such as the ones we are experiencing, a growth in deposits, especially those on demand, is inevitable. However, I like to underline how the reaction of Fideuram – Intesa Sanpaolo Private Banking, already in the very first days of the health emergency, was immediate and extended through intense communication activities with customers and the planning of new investment solutions aimed at the opportunities offered by the reference context. An approach that has paid off; after a brief and inevitable phase of tension in March, many investors took the opportunity to invest. It should be emphasized that the speed of interventions by the ECB and Europe helped a lot”.
What is the difference - in times of pandemic - between the average saver who invests in managed funds and more advanced customers who invest more capital in more sophisticated financial instruments?
“Regardless of the type of saver, our business is characterized by the relationship of trust between customers and private bankers. The analysis of the composition of our customers shows a concentration on the Private and HNWI segments. The consultancy we offer is differentiated to take into account the needs of each one. For a more sophisticated clientele there is undoubtedly a greater component of alternative investments, solutions created for institutional investors. With the FAI fund platform, Fideuram Alternative Investment, we offer our upper affluent and private customers investment solutions in private markets (for example in private equity and private debt)”.
Let the numbers speak: in the first part of 2020 what were the results of the Private Banking Division of the Intesa Sanpaolo Group?
“The Fideuram – Intesa Sanpaolo Private Banking Group closed the first six months of 2020 with a consolidated net profit of €419 million. Our Division recorded strong stability in the core components of the income statement, which show stable revenues and attention to costs, to which was added extraordinary net inflows - with over 6 billion - demonstrating a particularly valid service model rewarded by clients. The analysis by aggregates shows that asset management inflows recorded a strong increase (+€1,4 billion) largely attributable to the activity of our financial advisors who, in the second quarter of the year, directed the new flows customers' savings towards managed savings products. These are extraordinary results, achieved in a challenging socio-economic context”.
Did your way of dealing with customers change during the lockdown and even after? Has digital and consulting gained further ground in your business?
“In recent months we have increased the information, training and digital offer. Today everyone recognizes the importance of investing in human and technological capital. However, there are few companies that can make substantial investments on both fronts as we do and will continue to do. There is an obvious size theme that will drive further industry consolidation in the future. Those who invest as much as we do will have benefits that will be even more decisive in the future. Digital technologies have allowed our private bankers to maintain an ongoing relationship with customers, even during the lockdown. We will continue to strengthen our offer of digital services, in all phases of the consultancy: from the analysis of needs to the continuous and personalized monitoring of our clients' assets. We also offered ad hoc products, for example with gradual entry, which made it possible to smooth out the roughness of the markets".
What will change for the Private Division of the Intesa Sanpaolo Group with the entry of IW Bank? Will the advisory and private banking structures of the two banks merge, or will they complement each other?
“I know the professionalism of my colleagues at IWBank: it is a network whose potential I appreciate, equipped with a peculiar business model and in perfect harmony with our Private Banking Division. The IWBank Network becomes part of the Private Division of the Intesa Sanpaolo Group together with Fideuram, Intesa Sanpaolo Private Banking and Sanpaolo Invest. We are happy to welcome and enhance the talents who work for us: thanks to the entry of new colleagues, ours will be an even richer group, also in terms of preposition to the market”.
As you are not only Intesa's private banking number one, but also the Chairman of Assogestioni, what is the current state of health of the asset management industry? What does the doubling of fundraising in August (just under 7 billion) give us hope for the rest of the year? Is it possible that the outflows from funds, which seemed to worry during the lockdown, will be completely eliminated by the end of 2020?
“It seems to me that the response from the asset management industry has been positive in a difficult year like 2020. The savings companies have been very close to the distribution channels by providing timely and adequate information on the evolution of the crisis. I believe that the combination of production and distribution at the service of customers has worked well".
How do you explain the disappointing collection of PIRs, despite their positive performance? And how are the Pir Alternatives doing?
“Assogestioni has supported the birth of alternative PIRs right from the start. They are tools that aim to relaunch investments by introducing private savings into small and medium-sized enterprises which represent the backbone of our country's economy and are perfectly complementary to traditional PIRs. There are many companies that are about to launch these new products and it is too early to take stock. The various changes that have taken place to the constraints on the investments of traditional PIRs have undoubtedly slowed down the race for PIRs. These are investments that must be explained for their specificities and the tax benefits associated with them. I think that the Pir system will perhaps restart a little more slowly than expected”.
