Star Banker Collardi’s Past Raises Tensions at Bank Pictet
Star Banker Collardi’s Past Causes Tension at Swiss Bank Pictet
(Bloomberg) -- A star hire at Pictet & Cie is causing consternation at one of Geneva’s most exclusive private banks.
Pictet’s partners are discussing damage to the firm’s brand related to co-wealth management head Boris Collardi’s time as chief executive officer of Julius Baer Ltd., according to people with knowledge of the matter. In a strongly worded rebuke last month, Swiss regulators criticized Baer’s controls during Collardi’s near decade in charge, highlighting “systematic failings” in due diligence and anti-money laundering processes.
Pictet’s leadership is closely monitoring the situation, the people said. Marc Pictet -- the only partner to currently carry the family name -- was appointed as co-head of wealth management to work alongside Collardi last month, replacing Remy Best, shortly before the regulator’s report was published . Pictet’s partners swap roles every couple of years.
Collardi joined Pictet just under two years ago after his surprise exit from Baer, becoming the first outsider in almost two decades to join as a partner. Employing a tried and tested growth formula, he cast a wide net for personnel, recruiting bankers from Miami to Hong Kong and vowing to become one of the top 10 private banks in Asia.
His expansion plans are another cause for tension at his new employer, according to the people with knowledge of the matter. Some bankers in Pictet’s wealth management unit have expressed frustration that the Collardi-led recruitment drive has reduced pay by splitting compensation across a wider pool of relationship managers, the people said.
Pictet, which previously declined to comment, disputes any splitting of the bonus pool. In a statement, the bank said that “almost all” its newly hired bankers are performing above their business plan. A spokesman for Collardi didn’t return requests for comment.
Under Collardi, Julius Baer was known for its fast expansion. The company bought the international operations of Bank of America Merrill Lynch and made nearly a dozen small acquisitions, particularly in Latin America, doubling the money it oversaw in the process.
Collardi himself personified the rise of Julius Baer as a young and energetic CEO, doubling assets and spearheading a drive into Asia, inspired by his experience in Singapore with Credit Suisse. That was a contrast with the more consensual style at Pictet, which is run by a committee of seven partners that jointly own and manage the business.
For Swiss private banks managing the money of some of the world’s wealthiest individuals, discretion and the avoidance of any whiff of scandal are vital to maintaining their reputation and position. Finma’s criticism of Baer during Collardi’s tenure adds to a particularly turbulent time for the industry after a spying scandal brought down Credit Suisse CEO Tidjane Thiam.
The cost of the expansion at Baer under Collardi came in 2018 with the arrest of a high-flying banker in Miami who was later convicted and sentenced to 120 months in prison for his role in laundering money for Petroleos de Venezuela SA, Venezuela’s state-owned oil company.
Finma’s investigation into Baer’s role in the PDVSA corruption scandal found the bank fell “significantly short in combating money laundering” between 2009 and early 2018. The bank has been ordered to overhaul its money laundering measures and change the way it recruits, manages and pays its bankers, Finma said. The investigation didn’t name Collardi in person.
Collardi’s successor at Julius Baer, Bernhard Hodler, put the brakes on the bank’s rapid expansion and focused on improving its compliance efforts during his 21 months at the helm. He was replaced in July by Baer insider Philipp Rickenbacher, who quickly moved to reduce the number of top executives and is planning to eliminate 300 jobs across the bank this year.
Collardi began addressing the money laundering concerns before he left Julius Baer by replacing the management in Latin America and beginning a compliance program called Atlas.
The majority of Pictet partners come from a small circle of Geneva families, though partners can’t pass on their stakes to their children.
Over the past 214 years there have been only 43 partners, each with an average tenure of over 21 years. The partners meet three times a week, according to Pictet’s website.
To contact the reporters on this story: Patrick Winters in Zurich at pwinters3@bloomberg.net;Steven Arons in Frankfurt at sarons@bloomberg.net
To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Ross Larsen
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