The Empathetic Banker

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Forbes MC Staff   Forbes Monaco

Art On The Riviera

Article first published in Forbes Monaco July/August 2021 issue.

The new head of UBS Monaco, Alejandro Velez, has built a career becoming one with the needs of wealthy clients. His strategy has paid off.

Alejandro Velez could count on one hand his number of visits to Monaco before he was appointed country head of UBS in January 2021. “I knew very little about the Principality but was informed that, outside of Switzerland, this is the most international location UBS has with very large clients. As I have been running very large clients all my life, this would be a good fit.”

Similar to his native Ecuador—a small country with a close community—Monaco brings Velez the new challenge of leading the only UBS bank on continental Europe other than Switzerland. (All others outlets are branches.) “In Latin America, I managed over 350 people but here I need to oversee compliance, ops, transformations, marketing … it is completely different and I love it.”

The former UBS LatAm Head was educated in the U.S., including an MBA from the University of Miami Herbert Business School. “It was important to study outside of Ecuador as there were few opportunities for me there.”

He began his career at a very small Ecuadorian-owned bank in Miami but after opening over 1,000 accounts for Ecuadorians, he spoke with his boss about moving on to see what the rest of the world had to offer. “What do you want to be,” the bank head asked Velez, “the head of the mouse or the tail of the lion?” Alejandro Velez made a decision. “I want to be the head of the lion.” He spent three years at ABN AMRO where he “convinced them I could add something with my Ecuadorian contacts” and was sent to Ecuador with the promise of a return to Miami if he met his budget. “I made my budget on day one. I went to visit a client with a speech prepared and he turned around and gave me a cheque to open an account. In my first year as a private banker, I delivered double what the bank was asking of me.”

In 1999, Velez set his sights on private banking, which meant choosing between some of the world’s best. “I picked the European route with Deutsche Bank.” In Miami, Deutsche Bank gave him “a couple of different accounts, difficult relationships” to manage. “One had a liquidity event that was supposed to close when they gave it to me. I turned it around and they kept all the liquidity event with us and never closed the account.”

The other account was a well-known winemaker from Argentina who wanted his portfolio moved to Switzerland. He told Velez, “Either you move to Switzerland or I change banks.” The vintner put in a call and Velez found himself on a plane to Switzerland and was again managing Argentina, Chile and Uruguay. He ended up generating up to 50% of the revenue of Deutsche Bank Latin America. “The team and I discovered an agreement whereby if you invested in Austrian paper it was the same as for Argentine paper in terms of taxes for Argentinians. Since it was safer to invest in Austria, we became bigger and bigger for the Argentine community investing declared money in Switzerland via Austrian papers—to the point my team became important enough in Deutsche Bank that I was appointed the co-head position of Latin America.”

His book of declared money from Latin America in Switzerland caught the eye of UBS in 2013. “They saw the future coming and they wanted me.” For Velez, UBS was “the center of everything that had to do with private banking. They had learned from their mistakes during the 2008-2009 crisis and by 2013 were moving in the right direction.” He joined the UHNW team in Zurich as the head of Latin America.

In 2017 Velez became Head of WM Latin America for all segments overseeing the European locations— Germany and Switzerland, plus Mexico, Brazil, Chile, Colombia and Panama, where they “still had a large presence.”

“It was a very international post within the UBS European footprint,” Velez recalls. As the new Head of Latin America, he was given a To-Do list. “On top of that list, my boss told me I had to fix a situation in Brazil where we were losing money, and acquire a family office.”

In May, Velez was co-responsible for the UBS Group AG’s first purchase in Latin America in four years, buying a 60% stake for an undisclosed amount in Brazil's largest multi-family office, Consenso, which managed around 20 billion reals ($10 billion) in assets. (UBS bought the remaining 40% in April of this year.)

“This transaction will allow UBS to accelerate its expansion in Brazil and demonstrates our long standing commitment to growing our wealth management business in this key market,” Velez said in a statement at the time. 

“I learned from Consenso how interlinked you can be with a client,” he remarks. “Their leadership is very much aligned with anticipating the needs of the client, always doing the right thing and offering the right asset allocation, the right product and the right fees.”

A year after the acquisition, and following an announcement of a stronger-than-expected rise in pretax profits in 2017 (32% to SFr 5.4bn), UBS merged international wealth management with the U.S. and Velez was asked by UBS to return to Miami, tasked with the integration of UNHW and GFO business. “They were two different business models,” he assures.

Velez had considered himself American until he spent sixteen years in Switzerland. “I became European. I like the culture and the fact you speak different languages. Even villages in close proximity have different histories. So I felt I could contribute to the European model, despite the challenges of not sharing the explosive growth found in the Americas or Asia. I asked for a position should anything come up.” (Today, UBS is one of the Top 5 banks in the U.S., No. 1 in Europe and Switzerland and the top bank in Asia, including China, in wealth management.)

The call came for country head of UBS Monaco. “I had no idea what to expect. I had heard large institutions had left Monaco, so maybe there was a hidden issue. Not at all. I thought as it was a holiday place like Miami, next to the sea and yachts, I would find a less-focused staff. Not at all. The team in Monaco is very professional and we have reacted well to each other and our performance here has been amazing.”

Velez is confident he will add a dose of internationality to the Monaco location and has switched the private bank’s main language from French to English. “English reflects an international institution with clients worldwide.” The private bank has also introduced a new slogan—“We are One”—a strategy of understanding and having empathy with the client.

“There is no perfect location but Monaco is as good as it gets,” says Velez, and even more so in context to the social, fiscal and economic pressure elsewhere in Europe. “There is an international airport in close proximity, an excellent healthcare system, a very good international school that is growing and good local schools, excellent weather, a sound banking system and, on top of that, a favorable tax situation. If you are a wealthy individual deciding where to live, you start adding up all of these things and realize that the package is better in Monaco, despite its small size and extremely expensive real estate.”

Velez is adamant he is not looking to have 5,000 clients. “I want to make sure we treat our wealthy clients correctly, to offer value and understand them better than anyone else because there are good competitors.

“We have an issue with the Monaco location as we only manage $140 billion of $800 billion of wealth. Either we are not set up to manage large pools of wealth, we do not have a platform or we do not know our clients. We need to fix that. When we look at compliance issues, the group in Zurich has analyzed every angle of how we should manage a client or who we should accept or not. When the bank says no, it is no.”

The UBS Monaco clientele is twofold. First, it is made up of international clients (although no French residents) from the French Riviera who need a mortgage, for example, to buy a high-end property in the French Alps or Paris.

The other part of their client base comes from long-term international Monaco residents or Monegasques who think globally and have decided to use UBS and the content of UBS to invest all over the world. “Our typical clients are not looking at holding cash, but to invest their money globally—equity around the world, bonds around the world, FX around the world. And they are into sustainability. In Monaco, we are growing our sustainable portfolio and in terms of returns, today these investments have done better than regular types of mandates. People have realized that it is better to invest in a sustainable company.”

Additionally, UBS Monaco is probably the only institution in the Principality off ering VEFA off -plan buying to fi nance 50% of a property while it is under construction and the other 50% once complete in the Mareterra project.

The CEO adds, “Beyond real estate and the on going development of our headquarters, we have entered into a heavy investment phase in Monaco to reshape our IT and digital client off erings. New digital channels will enable us to reach out to our clients with personalized and relevant services and solutions, complementing the world-class services that our clients expect from a leading wealth manager.”

Velez describes his empowering management style as “very transparent, with open communication where everything is on the table. I don’t want anybody to be put down. If someone is not meeting their goals, we need to elevate them. Some people feel uncomfortable making decisions because it makes them responsible, but with empowerment comes responsibility. The team has become much more objective-driven and know I want to transform this institution for the better and leave a legacy.”

Velez puts his successful career down to being at the right place at the right time. “I have been a very lucky man and every single day I say thanks for what I have and for the opportunities. I surround myself with the best I know, and I extract the best from those around me.”

He smiles, “I am here not because of who I managed in my past, but who I did not manage. The problem is having the wrong type of client in your book. If tomorrow, Google gets access to my client base, I want people not on that list to say, ‘Shoot! I should have been there.’”

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Forbes MC Staff   Forbes Monaco