Massimo Doris, CEO of Banca Mediolanum, the Italian parent company of the Spanish Banco Mediolanum, considers that the group still has a lot of growth potential in both countries and does not believe that clients are concerned about the issue of the cost of the products, as stated European regulations, if they obtain profitability.
What objective of attracting clients and assets do you have for Spain?
This year we are going to attract well over the number of 10,000 clients. Exceeding 1,000 million euros in total net asset acquisition is a goal we have, but it is not about having more family bankers [denominan así a sus asesores financieros] to attract more clients and more money. In a year like 2022, where the profitability of all assets suffered, it was more difficult to convince clients to transfer their money with us, but we achieved net deposits.
Do they have more growth potential in Spain than Italy, where the market is more mature, for the group to continue growing?
In Italy we are very far from having reached maturity. But we still have very important growth potential. That is why we will focus over the next few years on organic growth, both in Italy and Spain. Traditional banking will continue to lose market share and the number of banks will be reduced, although they will not disappear, but at some point the situation may come. surprise from specialists in financial advice.
In Italy they were pioneers with their advice model through financial agents. But in Spain the bank is betting heavily on advice. Do you notice more competition now?
I’m not worried, because it’s one thing to do advice and another to do it well. If you look at what has happened in Italy with investment funds in the last 20 years, there are about eight years with net reimbursements, like last year, with outflows of 22,000 million. But if you look at the net deposits of the agent networks, which act as advisors, there is only one year with net reimbursements, in 2008. So the outflows came from traditional banks. And Mediolanum has not had any outflows of money even in 2008.
Because?
In 2022 there were falls of 20% in the equity markets and 18% in the fixed income markets. Investors compared it with the profitability offered by the bills and did not understand the losses. If you are a bank employee and you have to face angry customers, you will tell them to sell the funds and buy the bills. But in the case of an advisor, it is very likely that he made the fund recommendation and explained the difference in profitability he faced by selling at the worst time.
What do you think of the debate on the cost of advice and the elimination of setbacks?
90% of clients are not interested in the commission they pay. If you achieve 10% profitability, you are happy. If you lose it, no. Spot. He is not concerned if he pays half a point more or less, especially retail customers. But for a financial advisor to be available for their clients and help them costs money. Because if you offer this service and the client doesn’t pay anything, something is wrong in the model. If I sell you a Ferrari for 30,000 euros, it’s either used or stolen, because it can’t be.
How can the wind of change coming from Brussels affect financial agents?
In the United Kingdom, the rule prohibiting retrocessions in the sale of financial products was applied from 2013. The cost of the products has plummeted but the cost paid by clients has not, because the retrocession has been transformed into an advisory fee, which In the United Kingdom, after 11 years of regulations, it is above 2%. So in Europe, if it ends up being applied, the cost of the products will be lower, but what customers pay will be the same. Or the service will have to be reduced.
Growth based on agents and without bank offices
Although the Mediolanum brand has been operating in Spain since 2000, when it acquired the old Fibanc created by Carlos Tusquets, the entity has a history of more than forty years in which it has become the sixth bank by capitalization on the Italian stock market. and one of the 113 supervised by the ECB, with more than 6,300 family bankers (as they call the financial agents on which they base their model of advice and distribution of financial products), 3,700 employees, nearly two million clients and 130,000 million euros in assets under management.
Founded by Ennio Doris in 1982, the success of the group lies in the fact that this growth has been achieved without having a single banking office and thanks to the trust established by advisors with their clients, the basis of the entity’s model.
In Spain they have positioned themselves as the largest agency network, with 1,610 advisors, around 250,000 clients and approximately 12 billion euros in asset volume. But Massimo Doris, CEO of the group, believes that they still have a lot of potential, in a context in which advice is encouraged in Europe and not mere product placement.
In recent years, the group has been betting on attracting private banking clients, both those with lower assets, those with between 500,000 and two million euros, as well as the millionaires. For the first they created the figure of the private banker (870 in Italy and 71 in Spain) and for the latter, that of wealth bankerwhere they already have 135 professionals in the transalpine country.
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