Alain Zell from CAPITALIUM ADVISORS: Redefining Wealth Management
CAPITALIUM ADVISORS® is an independent wealth management company based in Geneva, offering premium services for international clients. More than a name, CAPITALIUM ADVISORS® revolves around people and values. Its founders, Alain Zell (CEO), Clement Schoeb (CFO) and Sebastien Leutwyler (CIO), share a passion for endeavors, abide by common values and adhere to a collective vision to redefine wealth management and its practices. In tune with a new generation of clients, the associates of CAPITALIUM ADVISORS® understand evolving expectations as well as the stakes that are at play. They offer an innovative approach, built on rigor and excellence.
Here, Finance Monthly speaks to the company’s CEO – Alain Zell who tells us all about the company’s beginnings, the services it provides and their plans for the future.
How did the idea about the company come about?
CAPITALIUM ADVISORS® was born of our determination to become independent, in order to guarantee our clients the highest possible standards of service and without any conflict of interests.
Wholly owned by Clement Schoeb, Sebastien Leutwyler and I, CAPITALIUM ADVISORS® is not a part of any financial establishment. This allows us to deliver services completely independently and with the standards of excellence that we have imposed on ourselves. Our added value is based on a firm commitment with two objectives: protecting and expanding our clients’ assets.
Tell us a bit more about the principal services the company provides and its priorities towards its clients?
We develop solutions especially for our clients, whether families, the emerging generation of millennials, or entrepreneurs. These offerings were not designed for our clients, but with them for the purpose of simplifying the financial component of their life equation.
We take a three-pronged approach:
CASA INVEST: We manage discretionary mandates, consultancies and supervisory services. Our investment landscape covers all types of financial assets and monetary bases. We implement tax-efficient management, in the structures and in the investments we select.
CASA NEXGEN: Our proprietary concept; it is the non-financial branch of the CAPITALIUM ADVISORS® services. It is targeted above all to families, helping them tackle challenges related to the transmission of patrimony. We offer an ecosystem built upon three pillars that the young generation interacts with on a regular basis: investment, education and mentoring.
CASA ADVICE: We help our clients to maintain total control over their private affairs, with a team of professionals who master the challenges and increasing complexities of today’s environment. Our company has equipped itself with state-of-the-art tools that allow for granular monitoring and analysis of financial assets.
How has the company grown in terms of operations and service offering in the past year?
We have stayed the course while focusing on our sole objective of disrupting common practice while offering our clients a unique financial experience. CAPITALIUM ADVISORS® is now one of Switzerland’s most important asset management firms. With our partner, SCHOEB FROTE® in Neuchâtel, in 2017 we exceeded the billion-dollar mark in AuM. Clearly, what clients are seeking more than ever is a relationship based on trust in which the lack of conflicts of interest allows a dialogue that goes to the essentials – preserving, growing and guaranteeing the transmission of their assets.
What differentiates Capitalium from its competitors?
While banks focus on staying profitable by cutting costs and raising prices, we do just the opposite – we constantly invest in enhancing our offering. This is the only to create concrete and tangible added value. Merely cutting costs is the reaction of those who are unable to renew their offering and adjust to clients’ new expectations.
On the portfolio management front, we have two requirements. First, we manage by convictions and avoid the “soft consensus” at all costs as it undermines performance over the long term and marginalizes risk control. Second, we privilege “open architecture” financial products. This guarantees us access to the best providers and the expertise of specialists. These requirements are accompanied by a clear code of conduct: refusal to receive retrocessions, no bias towards highly marginal products, no unjustified portfolios turnover and a systematic hunt for “hidden costs”.
Foremost, performance is what drives our decisions and recommendations. We also consider factors such as flexibility and efficiency to optimize our output. Models borrowed from core-satellite institutional investors inspire our work. The choice of tools revolves around indexed vehicles and investment funds, which we supplement via investments in direct lines, derivatives, structured products and real assets.
If you could share one piece of advice with Finance Monthly’s readers, what would it be?
In most cases, clients customarily diversify by entrusting their assets to several different managers, including both banking establishments and independent asset managers. While the need for counterparty risk diversification is an accepted fact, this is not as true for the way that assets react once they have been invested. The reason for this is that, while all asset managers claim to be different, investment management profiles have inevitably converged, due to regulatory constraints (standardised risk profiles), temporary profitability biases (retrocessions and high-margin products), and the fear of losing mandates (benchmarking to reduce the risk of underperforming the competition). This has, in turn, increased the financial risk that is inherent to portfolios.
To address this bias and offer more structural and robust diversification in wealth management, it is becoming necessary to combine several different investment approaches. Taking a unique approach is, in itself, one way to diversify risk and manage family assets on a solid basis for the long term. With this in mind, CAPITALIUM ADVISORS® has developed a three-pronged model that aims to guarantee the greatest visibility and traceability possible in investments. By reducing the asymmetry of information that too often exists between managers and clients, we provide clients with all the tools for objectively evaluating the work done and making informed decisions. This makes clients participants in the management of their own assets.
“We say what we do and do what we say”: in portfolio management we stand out in the way that we strategically overweight or underweight assets in a clear-cut manner, as dictated by our analysis of the financial markets. Accordingly, we eschew “cosmetic” transactions, which are too often used to mask a lack of conviction in portfolio management.
“Before making comparisons, accept that it’s fine to be different” : in contrast to the “fog machines” that are too often used by the financial industry to explain away performances, we want to avail CAPITALIUM ADVISORS® clients of instruments that help them precisely measure the quality of services provided to them. To do so, we have entered into a contract with IBO, a firm that audits returns adjusted to real levels of risk and compares them to the main Swiss investment managers.
“Optimising one’s financial ecosystem”: based on each client’s investment management profile, we seek to determine which counterparties and suppliers of financial products are most able to allow us to stay within the commitment we have made to our clients that their total fees will not exceed 1%, hidden fees included. This is what we consider to be the fair price for wealth management. What’s more, this enhanced efficiency has a direct impact on performance by reducing the risk incurred on a constant-expected-return basis.
In addition to the more entrepreneurial and contemporary model that CAPITALIUM ADVISORS® offers its clients, wealth management, like many other businesses, is based above all on the notion of trust. And trust can’t be forced; it must be earned over time. We do believe that it’s possible to earn this trust through an approach offering full transparency on the business model, the absence of conflicts of interest, and an uncompromising investment management process.
What are your goals for the future?
Within a few months, CAPITALIUM ADVISORS® has positioned itself definitively as a player able to offer a true alternative to traditional banks. CAPITALIUM ADVISORS® will continue to expand both organically and externally while continuing to demonstrate the added value of a business model that is close to its clients and with no conflicts of interests. Backed by common sense, hard work, boldness and enthusiasm, we ensure that we are positioned to implement our ambitious plans.
CAPITALIUM ADVISORS® SA
16, rue de la Pélisserie
CH – 1204 Geneva
Phone : +41 22 544 63 00
Fax : +41 22 544 63 09