The financial system is suffering from “collateral damage” from the war in Ukraine, the pandemic, disrupted flow of goods and inflation, to name just a few.
Some call the current inflation “the most evil financial lie in history”. Others are more than worried regarding CBDCs (Central Bank Digital Currencies) because they fear that the governments issuing CBDCs might not only monitor but also control the way we spend and save our money.
Within this storm on the global financial markets, four brave founders have just launched Switzerland’s first digital private wealth bank – Alpian. The founders got their full banking Finma license in spring 2022 – the official launch of the new digital private bank, which will use digital technology to combine machine learning with human intelligence, was in fall 2022. Over three rounds of financing, Alpian, which was originally established by Geneva’s Bank Reyl, secured more than 50 million U.S. dollars.
The founders are young and not at all what you may would expect to be founders of a private bank: Schuyler Weiss (CEO), Gianmarco Bonaita (Deputy CEO), former BCG expert Alessandro Sbrizzi (Head of Strategic Projects) and Marion Fogli (Managing Director). Schuyler Weiss has quite a track record in the financial industry after being with Morgan Stanley and Reyl & Cie, Gianmarco Bonaita was with P&G and Boston Consulting Group for the last seven years. Marion Fogli ran digital transformation projects in the wealth management industry and is a business economist from Ecole Hotelière de Lausanne. Quite an unusual quartet for this industry – but maybe that’s why everyone is watching Alpian’s moves on the market right now. Because they do it differently – with a lot of passion, purpose and incentives for their bankers that are directly linked to customer satisfaction. Let’s take a closer look and let me introduce you to someone who has come to rock our financial world: Marion Fogli.
Ladies Drive: Marion, what drives you…?
Marion Fogli: Passion, without any hesitation – and my values. I think we live in a world where, unfortunately, values have been deprioritized at many levels. I love the fact that, in the financial services industry, we have the opportunity of embedding our clients’ values in the investment decision-making process. It is possible to make value-based investments and, at the same time, have an attractive portfolio performance relative to your risk profile. This values-based approach is central to Alpian’s product offering and how we interact with our clients. Every day I bring these values with me to work. They guide me and drive me.
You are 41 – meaning that you are a totally different generation than a lot of other bankers. But where do these values and the passion, you just spoke about, come from?
I was fortunate to be raised by parents that were passionate about their own work, and very hard-working entrepreneurs, but also remained well-balanced. They raised me, my sister, and my brother with a positive, “can do” attitude, and the importance of building trusted relationships. My passion also comes from learning. I love to learn and this energizes me. I studied hospitality at L’école hôtelière de Lausanne (EHL) and did an Executive MBA at IMD. I’m an avid reader and make time for continuous learning. For example, in the last couple of years I have done certifications in artificial intelligence at MIT and Sustainable Finance at Cambridge Forbes.
But how come you became founder of a digital private bank…?
I already had 10 years’ financial services experience prior to Alpian. I have always considered my education background at EHL useful in financial services because, at the end of day, banks and investment firms need to be very customer-oriented. Indeed, I was drawn in part to the Alpian project because I saw an opportunity to innovate in how we interact with clients and to offer the same level of hospitality as a great hotel although the interaction is by video call or through chat. If you work at a hotel you get to know the customer on a relatively superficial level as they typically only stay with you for a short period. It’s just a small moment in their life. In contrast, when you are in wealth management, you accompany your client for a long period of their life. You know their family situation, often even meet their spouse and kids, you know their aspirations, their worries and fears, and a lot more! Alpian makes private banking accessible to hundreds of thousands of affluent people that up until now were not serviced by traditional private banks. We also democratizing investment through education, including offering financial master classes to clients and non-clients alike. This means that we can have a significant impact in terms of banking services and financial literacy. What a fantastic opportunity!
The launch of Alpian was last October. How did the other banks react now that you kicked it off?
For a long period this adventure was a secret. As such, other banks were not aware of our project. We were beavering away, applying for our license, hiring the team, designing processes, building technology, in short, setting everything up. I think you need to be a little bit of a fool to start out on such an adventure because building a bank from scratch is very complex. The fact that the Alpian team included people from within and outside the banking industry was very helpful. Had we known how many challenges we would have we may have been put off from starting the adventure in the first place. And how did the banks react when they eventually heard about us…? Well…some of them obviously had a closer look and even introduced some small changes aimed to help their clients. This is a good thing overall for the sector. In general, we get positive feedback from other banks, and they may not even see us as a competitor because Alpian focuses on a client segment that up until now has probably banked with retail banks. There’s space for another player like us on the market.
You have three kids between seven and fifteen – how do they influence and inspire you for your work at Alpian?
They are a significant part of my motivation. I hope that Alpian can be a force for good in democratizing finance, whether or not you are our client. For example, one of my kids joined me for a day at the office and he learned from Victor, our Chief Investment Officer, his team, and the wealth management team, what “appetite for risk” means. This provoked his thinking and interest in investments.
But I am not going to lie – having kids and being part of a startup is not easy.
I wake up extremely early, like at 4:45 a.m., work from 5 a.m. to 7 a.m., and then get the children ready for school, including starting the day with breakfast together.
I drive my youngest child to school. Starting work early enables me to leave the office at a reasonable time and spend quality time with the children. If I really need to, I will do some work in the evening when the children are in bed though I try to limit this. It is important to have some “me time.” I like to read and listen to music before bedtime. Like many people, I am separated from my husband, and this makes the job of being a parent more challenging in terms of organization. And, unfortunately, our society does not always make it easy when both parents work, for example school opening hours.
To blend your family into your job and vice versa, is a challenging task. But seeing the next generation growing up can be an incredible source of inspiration for our job, our business. Creating financial stability and financial independence is, at least for me, one of the greatest achievements of my life and with Alpian you will have the opportunity to transform and inspire the whole industry – if you deliver what you promised. It’s the same with kids, friends – if you don’t deliver what you promised you won’t be trustworthy.
Absolutely. Let me give you an example of what we want to do. This may sound totally silly or stupid but, nonetheless, it is key to what we do at Alpian. The first thing is that we act in the best interest of the client. We work with an “open architecture.” What does this mean? Behind Alpian, there is an ecosystem of investment specialists we partner with and that we select for their expertise. We do not have our own products, instead we bring to our clients what we think is the best available in the investment world. In the jargon of finance, this is what we call “open architecture.” We believe working this way helps us achieve the best possible investment outcome for our clients. Each investment that goes onto our investment platform must meet three criteria: it is managed in our clients’ interest, managed at a fair price and managed by competent professionals with a robust investment process.
By being objective we ensure alignment of interests with our clients. For example, when selecting a third party fund it is customary for the distributor to ask for retrocessions or to take a placement fees. Not only do we refuse retrocession, but we also use our bargaining power to negotiate fees on behalf of our clients. In many instances we are able to give our clients access to conditions that are normally reserved for pension funds or large institutions.
Fees are always a sensitive topic. Nobody like to pay fees but they are supposed to reflect the extra value you get for a service provided. We charge our clients a unique fee of 0.75% for the investment services we provide. This includes the definition of the individual strategy, the management of the portfolio or the advice we provide, the research and work done by the investment team, the custody of the assets and the transaction costs and of course the direct access to the advisors. On top of that, there is the TER (Total Expense Ratio) of the third-party products on which we perceive no retrocessions and that we have negotiated. Additional fees may apply like taxes and FX markup but these are either administrative costs every investor in Switzerland is subject to or fees that we keep control of.
The starting point of the investment journey with Alpian is the definition of an investment strategy. It is a long-term plan we devise together for attaining the financial goals you’ve set for yourself in life. This strategy is then translated into a portfolio. Because the strategy will dictate the future outcomes, it is important that we get it right and that it reflects who our clients are, as investors. When profiling clients, banks usually collect information about their financial situation, their aspirations as investors, their knowledge and experience and some of their constraints, their ability to withstand risk. But the human factor is often missing. What do we mean by that? Two investors may have the same profile on paper and thus end up with similar portfolios but if we could enter their brains, we would see that their sensitivity to gain and loss differs greatly. Borrowed from the now famous experiments run by two Nobel prizewinners in the 70s. Suppose that you are asked to play a simple game. Two options are available to you: We give you 1000 CHF straight away or we give you a lottery ticket where you can win 10,000 CHF with a probability of 10% or nothing with a probability of 20%. From a pure statistical point of view, the expected gains are identical and a “rational” investor should be indifferent. But each one of us will have a preference. The more conservative investors will prefer a sure gain, while the risk takers will take their chance to try to win more. These preferences are shaped by our background, our experience and probably our genes and they defined us as investors. They should be factored in the building of an investment strategy. Because they are likely to influence the way we react when the market goes down or when we miss an investment opportunity. Most profiling tools will ignore them. At Alpian, not only do we not ignore these insights, but we use them to come up with individual strategy. Each client will have a different strategy and a different portfolio. We avoid clustering. In addition to these cognitive elements, we also take into account other factors that are part of our client identity: the asset class they don’t like and their preference for investments that make an impact on our world.
To build a long and meaningful relationship with investors, we need to build trust. And trust begins with more transparency.
Earning investors’ trust begins with providing clear and precise knowledge about what is in their portfolio, how it is built and how much they pay. We also disclose our performance.
Is there any other bank that works like this?
With a fully digital and compliant bank opening in less than 10 minutes, professional and tailor-made discretionary management and – soon guided by Alpian mandate – favorable exchange rates from a multi-currency account – you do not need to exchange; it does it automatically if you do not have EUR on your bank account for instance – a hybrid debit visa card, a dedicated advisory team available that is digital, at your service and resolutely human? There is only one! Us!
As a banker, you can have clients with smaller budgets and still earn money with Alpian?
Exactly. The market practice is that a banker earns a commission each time they sell a financial product and usually the commission is higher for selling one of the own bank’s products. At Alpian we are not comfortable with this practice. We believe that this business model incentivizes the banker to promote certain products over others rather than prioritizing the client’s best interest.
Another example is that we have taken a very different approach to creating risk profiles for our clients. The industry practice is that a client is allocated to a limited number of risk profiles, for instance, conservative, balanced, or aggressive. At Alpian we do not have a rigid and limited set of risk profiles. Instead, every client has a personal risk profile that is unique based on our own proprietary model. This model then enables us to create a highly tailored investment portfolio or each client. This is an atypical practice in our industry.
Finally, despite being a digital bank, our wealth advisors are human, not robots or algorithms. We are truly, deeply human. When you have interactions with us, including through the app chat feature, a human being takes care of you. We are reachable from 8:30 a.m. to 7:30 p.m. and the client can choose in which language they want to talk to us. If a question pops up during the night, the client can leave a message through the chat feature and in the morning, they will have an answer. You can make an appointment to talk to an advisor and you will have a dedicated person with relevant subject matter expertise for the topic you want to discuss.
How many people work for Alpian at this moment?
As of today, 100.
And how do you intend to create trust together with your team? You’re a startup – and the industry has seen a lot of scandals and scams over the last years. So how to prove your trustworthiness?
We have a great team at Alpian. Building a bank is very challenging and takes a lot of commitment. This is only possible if there is a positive team environment. We have invested lots of time over the past few years building a culture based on teamwork, trust, and respect. This is continuous effort. Trust within the team is the starting point for having trust with clients. Trust with clients is also based on Alpian having highly competent professionals and excellent customer service. Importantly, our wealth advisors use understandable vocabulary and listen to clients rather than pushing products. The end result is a highly personalized approach, not “one size fits all.” All of this is underpinned by Alpian being properly regulated. Over time I believe that our financial masterclasses, which you can join free of charge on our website i-vest.ch, will help us to build trust in the market. All of this is underpinned by Alpian being properly regulated. We have a FINMA license for complete banking services.
And you collaborate with a number of pretty well-known ambassadors like Belinda Bencic, Géraldine Fasnacht and Sébastien Buemi. Is that another tool of how to create trust through these ambassadors?
We are delighted to have our three ambassadors. We call them Chief Inspiration Officers because we see their role as helping our clients and potential clients to think about “Wealth Beyond Money.” Belinda, Geraldine, and Sebastien truly understand us and they collaborate with us because they believe in what we are doing.
Can your clients invest in cryptos with Alpian?
At present, no, but the situation may change in the future.
And what is the future of banks, money – and of banking in general?
The financial service industry is evolving. It is a gradual process but is picking up speed. This is partly due to innovators like Alpian and also due to changing client expectations. People are becoming more conscious about what to do with their savings. In the past the affluent people that did not have access to private banking had had a tendency to think “Oh, I don’t have many options so I’ll keep my funds in that well-known bank because it is really safe.” However, people see that even big banks can be unstable, which may well be reflected in their share price, regulatory fines, or regular management changes. And these large banks often feel very impersonal as a client experience. As such, I think we will see people being increasingly willing to change their banking relationship to find a more personalized and purposeful experience – at a fair price – where they feel listened to and have a product range that aligns to their vision. As such, over time I think there will be more consolidation in the market, both in Switzerland and internationally. It is inevitable that technology will play an increasingly important role in the customer experience. Nonetheless, I hope that banks will focus on the human because Alpian proves that they are not mutually exclusive. For banking to become more democratic and transparent, we also need citizens to be financially and digitally educated.
So going back to the beginning of our conversation regarding ambition and passion. How would you – personally – like to create impact? As a human being, as a mother, a friend, a banker…?
My longer-term vision, perhaps you could call it a dream, is that all school leavers have a minimum level of personal finance knowledge, for example managing your budget, your first income, understanding basic investment principles, and the difference between “good debt” and “bad debt.” I would love to play a role in helping the Swiss education system to address this important challenge, which I am convinced would have a positive social impact.
Interview by: Sandra-Stella Triebl
