Geneva-based financial services software provider Temenos started in the region by securing partnerships in Panama and later in Miami
Most recently it signed Brazil’s Banca Itau, an advice-led private bank.
Temenos believes cloud computing can deliver cost savings in the burgeoning region.
O’Reilly sees growth in the advice market most visibly in Brazil, Mexico, Chile and Peru driven by macro-economic trends.
Behind this, he sees three factors underpinning the development of the advice market.
Banking secrecy is dead
“First of all, the idea that you would open an account in Switzerland and keep it hidden that is gone,” O’Reilly told International Adviser.
“Bank secrecy is no longer there and taking funds out of a country is obsolete.
“This means mass affluent and high net worth clients now prefer to manage their assets with the banks they have come to know.”
Economic stability
“Part of the reason for this is because LatAm economies and currencies are now much more stable,” he said. “Clients feel their funds are safe, especially with local banks who can offer advice and portfolio diversification.
“Expats are a force but it pales in comparison to domestic growth. We expect some baby boomers to come here with their assets in the next few years for better weather. Miami and Panama are certainly options for this segment. The Bahamas, Cayman Islands and even Miami can offer better tax treatment.”
Technology
A third trend is the ability of technology to allow banks to offer advice at lower costs by using robo-advice or simple portfolio modelling.
“Whether a client chooses robo-advice or face-to-face advice I believe they will be complementary,” observes O’Reilly. “It depends on the client – some will be satisfied with automated data-driven solutions and some will like the personal touch.”
O’Reilly believes the banks are at a cross roads depending on whether they chose to become efficient product makers or whether they focus on the adviser and client needs.
He believes in the latter and the centrality of the trusted adviser, backed by efficient technology not in opposition to it.
