CaixaBank has just launched a service for all its private banking clients through which they can receive global portfolio advice at a cost of 0.7% on the volume of assets advised. Advisory GPS, which is its name, is focused above all on attracting the profile of high-net-worth clients who until now receive advice in a non-independent manner, although the entity does not set any recruitment objective.
The winds of change favorable to the elimination of rebates (the percentage of the cost of a financial product that the distributor keeps in exchange for its marketing) continue to fly over Brussels, despite the fact that the European Parliament approved a series of amendments in April on the initial text of the Retail Investment Strategy (RIS) that allows incentives to be maintained in the sale of funds as long as it is not under the umbrella of advice, in exchange for more transparency in the cost and choice of investment vehicles.
The legislative development of the RIS was paralyzed by the European elections in May and until the new Commission is formed it will not be able to move forward, taking into account that the text could be modified again depending on the new composition of the European legislative chamber. But almost no one now doubts, within the asset management sector, that sooner or later retrocessions will end up completely prohibited.
In this sense, CaixaBank is ahead of the competition with the new advisory service it has just launched, after having managed to position itself as a leader in discretionary portfolio management, where it already manages 48,000 million euros, according to the latest data from Inverco.
Precisely this business segment, in which the client delegates investment decisions to a firm in exchange for a commission based on their risk profile, has been the one that Spanish financial institutions have promoted the most in recent years, in the heat of the European regulations that were being forged. In fact, 25% of the funds distributed in Spain already do so in this way, in addition to the fact that almost 47% is done through advice, without distinguishing whether it is independent or not.
Hence, the next step for firms once they have verified the success of the portfolio management model, which manages 126,000 million euros in total, is to promote advice. And this is where CaixaBank with Advisory GPS wants to position itself ahead of the competition.
In fact, This service will be of explicit payment and with access to clean classes (this is the name given to the classes of funds that do not allow retrocessions and are cheaper) for non-independent advisory clients.
It must be remembered that according to the Annual Private Banking Ranking of elEconomista.es, CaixaBank Private Banking is positioned in second place by asset volume (see graph), behind Santander, which has just hired Víctor Allende as head of this area , the person responsible for CaixaBank gaining ground in asset management and wealth advisory.
The 0.7% cost that Advisory GPS will apply is only 10 basis points above what the Catalan entity charges for discretionary portfolio management, which suggests an attempt to transfer a significant portion of clients to the advisory model in exchange for paying a little more for the new service.
How it works
Advisory Global Portfolio Strategy makes a play on words with the acronym GPS by wanting to become a kind of market navigator for private banking clients. Actually, This is a platform developed through Aladdin Wealth, BlackRock’s risk management technology.which allows personalized investment proposals to be made to clients in portfolios of funds, ETFs or specific securities, depending on the profile and preferences of each investor, also taking into account possible biases that they want to incorporate, such as style value or dividends, and even alternative assets, as long as they are liquid products with the Uctis seal.
The platform is also capable of anticipating possible scenarios for portfolios in the face of certain market movements, and allows the firm’s global strategic vision to be integrated and change proposals to be made, always under advice.
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