Entrepreneurs and families make up about 40 per cent of its AuM in the overall wealth business and are growing parts of its total business, a senior figure at the Paris-based firm said.

This news service interviewed Pierre Ramadier, who has been in the post of global head of entrepreneurs and families at BNP Paribas Wealth Management since December 2020. We delved into the details of  intergenerational wealth transfer, family businesses and wealth dynamics. As one of the largest European banks, with strong connections to regions such as Asia, this Paris-listed firm is in an interesting position to comment. 

How has your time in this job been so far? 
It was an unusual challenge to take on such a global job in a context of the Covid pandemic and lock-downs. My team is in many countries, so I had to grasp this new perimeter and meet my colleagues in remote working, without even getting out of my living room … which was definitely peculiar. But at the same time, this specific environment has also enabled us to strengthen our contacts and links with our customers through the acceleration of digital processes.

Thanks to our digital maturity, we were able to accelerate the deployment of new digital features such as “Voice of Wealth,” webinars, videos, chat and more. The Covid crisis has also demonstrated the resilience of our model and platform to surmount challenges such as market shock, strong volatility, travel restrictions etc. We now have a robust model and we will continue to invest in our platforms and people.

What sort of clients does your area of business cover? Do you have a particular segmentation model and if so, could you describe it?
We are strengthening our support to large entrepreneurs and families clients across all our geographies, drawing on the strengths of BNP Paribas' distinctive, diversified and integrated model, so that this clientele can fully benefit from synergies with CIB, asset management and real estate in particular.

Just to name a few of our latest developments:
-- In Germany for example, we accompany entrepreneurs from the Mittelstand to develop their wealth and businesses, building on the strengths of the group’s local presence; and
-- We have the same approach in the Netherlands. In 2019, we increased our positioning in this country to better support entrepreneurs from Northern Europe by leveraging our international footprint. This new team, based in Amsterdam, allows us to strengthen proximity to customers. Clients can therefore access an enriched offering – particularly in private equity, mandated management and financing – and benefit from the group's expertise in corporate and investment banking and real estate.

When working with families/owners, what sort of client coverage ratio, in approximate terms, does BNP Paribas have for its advisors? Is this an area where an advisor can only realistically look after a relatively small number of clients?
We develop a very close relationship with each of our clients, which requires proximity and availability. We do not communicate on the number of clients, but we develop a customised approach with each of them, combining our internal expertise – strategic asset allocation, private and alternative investments, sustainable investments, wealth and business transfer, credit, M&A – and the Group’s capabilities – real estate, corporate and investment banking.

In your experience, what are the main forms of help that clients seek from your firm?
Beyond the traditional offering of a private bank, our clients are more and more interested in advice on specific solutions to diversify their portfolio such as private equity, M&A and credit. We are able to support our clients with different types of investments and this is a very distinctive element compared with more specialised players. A trend that is predictable and has been rapidly growing for the past few years is sustainable investment. The resilience and financial performance of sustainable investments combined with the collective consideration of the climate challenges ahead have heightened entrepreneurs’ interest in sustainable investing.

Today, 60 per cent of them hold sustainable investments in their portfolios; an increase of 25 per cent compared with 2019. Within BNP Paribas Wealth Management, our ESG approach is based on a comprehensive customer journey, from the needs identification phase to the solution and reporting phase, fully integrating digital. 

To support this approach, we have developed a very robust set-up to accompany our clients in their sustainable journey: a team in Paris and a network of impact coordinators in all our geographies, an internal methodology measuring the level of sustainability of our entire recommended universe (funds, equities, bonds, ETFs, etc), and MyImpact – a digital tool to help our clients define their 'impact investor' profile based on the 17 SDG of the UN, specific mandatory trainings for all our relationship managers, etc.

How much of what you do in talking to families/owners is about the specific financial issues in front of them (transitioning ownership of business, handling liquidity events, etc) and how much on the supposedly “softer” side on governance, intra-family relationships, etc?
Wealth and business transfer is a key topic for our clients which requires a long-term approach and planning. Each situation is different and depends on our client’s individual objectives, constraints and decisions regarding the management of assets, investments and projects. Thanks to a global understanding of their private and professional wealth, we help them manage their legacy to preserve the future of their family and business. 

On the business side for example, we work with our clients to define the relevant solutions in terms of sales and acquisitions, structuring of investor relations (shareholders agreements, LMBO, FBO), structuring of holding solutions, and restructuring and consolidation of business assets. Governance is also of paramount importance for our clients. Over the past few years, we clearly see a growing influence on the next generation on wealth planning and strategic business decision-making. The role of the younger members of leading families is no longer limited to behind-the-scenes planning and collaboration.

They also take part in leading aspects of the business transformation and are fast becoming key players in modernising company operations, product lines and brand, and more and more they are integrating sustainable practice into their business. Consequently, as reported in our last Entrepreneur and Family Report, 40 per cent of entrepreneurs feel that the priority area where wealth managers could support them is developing the business management skills of younger members. That is precisely what we do in the NextGens programme, dedicated to our client’s children and grandchildren. 

Whether they wish to take on leadership roles in their family businesses worldwide or purse their own entrepreneurial passions, it is essential to support the next generation to enhance their financial and portfolio management knowledge, meet financial experts, discuss with opinion leaders and develop their leadership skills. We organised the first “in-person” NextGens event since the beginning of the Covid pandemic last month and it was a great pleasure to meet with this next generation of leaders and discuss topics such as wealth planning, metaverse, circular economy etc.

Within the overall wealth management operation of BNP Paribas, how important is the area you head up in generating revenues? Is your segment of the business becoming more important over time?
Globally, BNP Paribas Wealth Management is growing, which is reflected in our very good results both in 2021 and in this first quarter of 2022. We manage more than €420 billion of assets, up by 20 per cent compared with the beginning of the last strategic plan in 2017. Entrepreneurs and families represent around 40 per cent of those assets under management and a growing part of our revenues. 

Since 2018, we have rolled out an ambitious development plan in Europe (Germany, the Netherlands) to combine our expertise with those of our colleagues in other businesses. BNP Paribas is already well established in those countries (CIB, real estate, commercial banks) so entrepreneurs can fully benefit from the Group diversified model, which enabled us to gain market share. 

Also, the entrepreneurial spirit strengthened during the pandemic, and we support this new generation of entrepreneurs and develop specific expertise to meet their wealth, private and corporate needs. In France for example, we work closely with start-up entrepreneurs; 80 per cent of French Next 40 companies and 75 per cent of French Tech 120 are clients of BNP Paribas.

Other large banks say they work with business owners and families. What does BNP Paribas do that you would say is distinctive? What gives you an edge?
Our diversified and integrated model gives us this edge. Because we have all the expertise in the same “house” – wealth management, corporate banking, investment banking, real estate, asset management, we can offer our clients a very distinctive experience compared with players that are more specialised. We also have a very significant global footprint, so we can accompany clients internationally, building on the expertise of all our local teams in the 17 geographies from where we operate. 

Can we talk a bit about the domestic French market? Inheritance law and other laws relating to transfer and control of assets are different from those in Anglo-Saxon countries. Are there any specific features of the French market that create types of work for your firm?
Beyond tax measures that can always evolve and differ from one country to another, there is a permanence in the support we give our clients, in all our geographies, to anticipate their wealth transfer and diversify their portfolio.   

I know that philanthropy/impact investing/ESG are important topics across the whole of the bank. Can you talk a bit about how your section of the business addresses these areas – can you give a couple of examples of recent initiatives/projects?
As impact investing/ESG is a very different topic from philanthropy, it might be clearer to separate the two questions.

Impact investing/ESG: We’re at the forefront of sustainable investing. As I said earlier, we already have a very robust set-up with a central team in Paris and a network of impact coordinators in each of our locations. We integrate sustainability at all stages of the client experience. Our ESG approach is based on a comprehensive customer journey, from the needs’ identification phase to the solution and reporting phase. First, we collect our clients’ preferences regarding sustainable investment via myImpact, a unique tool, based on the UN's 17 Sustainable Development Goals. This first stage, enables us to better understand the causes our customers want to defend. From this “impact profiling," we can help our clients make to right decisions to align their portfolio with their preferences. We have also deployed our own “in-house” methodology.

Thanks to this new rating methodology, clients can identify the level of sustainability of their investments. It measures the sustainability of our entire recommended universe using a consistent approach, with criteria adapted to all asset classes. As such, It allows the comparison of all financial instruments (funds, equities, bonds, ETFs, etc.) in a client portfolio to align their holdings with their sustainability objectives. Employees are also key to this approach so we continue to onboard our teams in this impact transformation process. We have integrated a specific ESG module into our certification programme, mandatory for all our private bankers.

Philanthropy: In 2008, We created a fully-dedicated philanthropy team to support our clients to achieve their philanthropic goals. We help them define their focus, determine their strategy, decide on structuring and operational aspects of their philanthropic structure and choose their financial management. Our deep knowledge in the philanthropic field enables us to support clients to build their network and choose the best solution to achieve the desired outcome.