For today's S&P Insight, I sit down with Louis Portal, a distinguished Zurich-based wealth manager known for his strategic foresight and deep expertise. Discover how he navigates geopolitical challenges and volatile markets with confidence and how he envisions the transformative role of AI in the future of wealth management.
Louis, most of your clients are (U)HNWIs with complex financial landscapes. How do you tailor your approach to meet their unique needs?
Fundamentally, I tailor my approach by building a relationship with my clients, where
they are invited to express their thoughts and views candidly, and to develop the trust
that I will be considerate and honest in my own thoughts and views about how I can best
support them.
This process involves continually seeking to understand who my client is: what got them to where they are; what their financial experiences have been; what their medium and long-term goals and priorities are; what - if any - reservations they have about making changes; and how their relationship with financial risk and reward has developed.
Everyone I work with has a unique history, vision and set of values that I am ever curious
to learn about, and I find that this honest curiosity enables me to arrive at a deeply held
understanding of their needs, goals and dreams, and I tailor my ongoing advice
accordingly.
What are the most common challenges your clients face in managing their wealth?
Managing wealth successfully is a difficult, complex and time-consuming endeavour,
and so the challenge of successfully addressing all elements of their financial plan and investments may be the most common challenge my clients face, prior to becoming
clients.
The time spent identifying and outlining their priorities, trying to develop different
ways to assess and understand their financial position, researching potential alternative
solutions (some of which they find very elusive), implementing changes, and attempting to find and manage reliable long-term investments, all distract from the life they want to be living and the time they want to spend on the things that they love.
Once a person recognises that there is an easier way, the challenge becomes finding an
advisor that they trust, personally and professionally, to play an important role in their life.
How have the needs and expectations of (U)HNWIs evolved over the last decade? Have you noticed any generational shifts in how younger heirs or entrepreneurs approach wealth management?
Yes, there have indeed been changes in client expectations. The first difference is that younger generations tend to expect that everything they might need can be done digitally.
While this is unfortunately not yet always the case, especially with traditionally minded institutions, ISGAM AG’s willingness to implement digital systems early and carefully was part of what attracted me to the firm. I should stress here that face-to-face contact is something I value greatly, and that is also important to all my clients.
Secondly, the modern availability of information can lead some to underestimate the value of tried and tested experience and know-how. While there is a lot of good educational material online, there are also many accessible sources that minimise the complexity and risk of investing and of financial advice, and this can, and does, leave investors in precarious positions when the unexpected occurs.
In many ways however, clients have remained very much the same as they have always been. They value long-term relationships that grow with time, they have a desire for the best possible returns with a measured level of risk, and they seek an advisor that understands them and cares for their financial needs and objectives as they evolve.
With increasing geopolitical uncertainties, such as conflicts, inflation, and changes in tax regulations, how do you help your clients navigate these global dynamics? How do you incorporate geopolitical risk management into their wealth strategies?
As a relationship manager, a part of my role is to help clients navigate uncertainty with confidence. Markets will always experience volatility due to geopolitical events, inflation, regulatory shifts, and shifts in sentiment.
The key, in my view, is to stay focused on long-term value rather than being overly reactive to short-term market movements. Our firm has spent decades developing market indicators and investment strategies that help us assess and adapt to global conditions as they change. We build portfolios that are positioned to benefit from structural trends and to remain resilient, through diversification across asset classes, industries and geographies and the continual reassessment of risk.
That said, my experience is that active communication is just as important as portfolio strategy. During periods of heightened uncertainty, investment decisions can be affected by emotions, and my role is to provide clarity, ensuring clients understand what’s happening, why their portfolios are structured the way they are, and how we’re proactively managing risk on their behalf. I find that sometimes a candid conversation is all it takes to turn anxiety into confidence.
People these days are very mobile, and tax and regulatory landscapes also shift over time. Therefore, periodic adjustments are required. While I am not a tax advisor, I and the team keep abreast of changes through our international network of tax experts and market and policy researchers. It is important to me and to our clients that conversations about optimising tax efficiency, or restructuring a portfolio for new regulation, happen at the right time.
Success in wealth management is often measured in terms of financial returns, but many (U)HNWIs seek intangible benefits as well, such as peace of mind or impact. How do you help clients identify the non-financial benefits of their wealth management strategies?
That is an excellent point, and one that can often be overlooked. You are right that one of the key attractions to what we do are the returns we achieve for our clients.
However, what clients end up valuing from our service is much broader. Perhaps the most significant intangible benefit is that of feeling that you can trust your advisor to give you honest, transparent and independent advice, that puts your interests ahead of their own. When this is proven repeatedly over many years, it brings with it a sense of deep tranquillity that frees up a part of your mind to enjoy the richness of the rest of your life.
Having a positive impact is a growing consideration for some investors. I am keen to understand my clients’ perspectives and to be the facilitator that enables them to combine this with achieving attractive returns – these are not mutually exclusive. I am glad to be part of a team that is keen to find opportunities that support this.
Succession planning is crucial, not only for your clients to ensure a smooth transfer of wealth to the next generation, but also within wealth management firms to maintain strong client relationships. How do you approach succession planning for your clients, and what steps does your firm take to ensure continuity of service if a key relationship manager, like yourself, retires or transitions out?
Because of my family background, I have grown up with some of the blessings and challenges of cross-border intergenerational wealth. For that reason, I find a natural personal connection with clients struggling to find solutions for their financial and estate planning and find it rewarding to find the best solution for them.
Company succession planning is a part of this solution, because it minimises any possible disruption to the management of family wealth that can be caused by changes within a firm.
This is a major topic that I have found is under addressed among firms in the industry, and I have recently been raising this issue by speaking at industry events, explaining how we have implemented our succession plan internally, and why others should do the same. My experience is that clients feel reassured knowing that if something happened to me, there would be someone there that they could trust to pick up the mantel of that relationship and carry on with the quality and in the spirit with which it started.
For UHNWIs, sustaining wealth across multiple generations often requires strong family governance and financial literacy within the family. How do you help clients set up family governance structures, and what role do you play in educating the next generation to manage wealth responsibly and maintain the family legacy?
Assets that are intended to be perpetual require a different approach than investments that are aimed at funding a lifestyle. Perpetual investments can often benefit from structures that protect their perpetuality and avoid potential conflict.
Because family units can be so diverse, the work to establish the parameters of a structure, to ensure that it is suited to the needs of the family in the long run, must be completed thoroughly and diligently before implementation. In my role, I can either lead this or serve as a third party or external advisor.
Gradually including the children in financial topics to help them develop financial literacy can certainly be a part of that, and it is very rewarding to see the journey that young people go through as their role develops. I bring my own experience of what works best to engage young people, and I also recognise the importance of refining this to the desires and preferences of the family head(s).
Artificial Intelligence is reshaping many industries, including finance. How do you see AI impacting the future of wealth management?
It is an exciting time for technological innovation. We are seeing many initiatives arising that employ AI in new and experimental ways. As with any new technology, some of these initiatives will prevail and remain, and many will fall by the wayside, and it is difficult if not impossible to be certain about which will do which.
There are already substantial efficiency improvements possible by using auxiliary AI tools in wealth management: They can facilitate the early stages of screening a range of investments for opportunities, following parameters set by the investment manager; they can synthesise large amounts of data quickly, for internal and external purposes; and they can augment the capabilities of portfolio managers with operational solutions that allow managers to focus on the important strategic decisions that involve more than quantitative considerations.
Although the track record is short, there is little evidence so far that fully automated investment management technologies can outperform good traditional asset managers, and there are very real concerns around data security. The challenges of regulation are likely to persist, perhaps for as long as people continue to innovate.
In my view, one significant thing AI will be unlikely to become capable of, is to replace the
relationship of trust that can develop and deepen between individuals; a very personal
connection that is extremely difficult (perhaps impossible) to quantify.
A part of this trust is the relational sense that the person you are making an agreement with is accountable for their part of the agreement - implementing it, explaining it and justifying it. So, humans may have to remain the ultimate decision makers well into the future, and I suspect I may not be the only one that finds this to be a heartening conclusion.
S&P connects discerning clients with first-class specialists across various industries, creating lasting value. Louis is one of these carefully selected experts whom we wholeheartedly recommend. If you are interested in his services, feel free to contact us directly – we will facilitate the introduction for you.
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