Interview with Patrick Héritier and Patrick Humbert-Verri, Pleion SA

Could you describe the DNA and the evolution of the key stages of the Probus Pleion group (in particular, the merger in August 2021 between Probus SA and Pleion SA that formed the group). What have been the key factors in your success and what synergies have been achieved as a result of the integration?

Our DNA is reflected in the name of our Group: “Probus” stands for integrity and ethics, while “Pleion” indicates the ambition to get better and improve towards excellence. Our success depends not only on this merger, but also on a common culture, shared values and compatible visions. In addition, it is essential to be passionate and enjoy working together.

For us, complementarity is generally more important than synergies, which currently account for around 5-7% of our turnover. In the case of Probus, we have opted for a strategy based on accelerating growth with our existing teams to achieve economies of scale. This has also generated intangible synergies, as we have significantly improved processes and professionalised the organisation of our departments.

How have you tackled the challenges of implementing FinSA/FinIA?

We anticipated the challenges by obtaining the CISA licence in 2019. With the arrival of Patrick Héritier as CEO in 2017, the idea was to strengthen the management and the organisation of the company.

With the entire necessary framework in place to ensure sustainable growth, the entry into force of FinSA/FinIA required only minor adjustments, as we were already organised and structured appropriately.

With the anticipated increase in regulatory costs, what do you think are the main organisational areas/ processes that need to be mastered to remain competitive and efficient under the new regulations?

I like to talk of the “scissor effect” in wealth management: revenues are falling at the same time investment requirements and current expenses are rising.

Transparency has increased competition, which puts pressure on unit revenues. This is coupled with the FinSA regulation, which is driving up our costs. In addition, we observe an increase in the investment needed for the digitalisation of processes, not to mention the current inflationary environment.

As a consequence, we have to control our costs to remain competitive, and we are strategically focusing on efficiency gains through digitalisation, process improvements and the development of our staff, as well as teamwork.

FINMA is now extremely alert to risk management. For a company like ours, it is important to have most of the risk processes automated, digitised and standardised (taking into account the diversity and complexity of our Swiss and international client base) to control these risks. We are also committed to greater sharing of best practices between asset and wealth managers and have begun collaborating with some of our peers in specific areas.

In terms of your clients and their needs, what innovations are you investing in to meet and anticipate their expectations?

To meet our clients’ needs in terms of asset management and digitalisation, we are integrating Finstoy SA in Lausanne through a merger by absorption (subject to approval by FINMA). This company has been using Swissquote’s robo-advisor for many years. This is an innovative approach to asset management: according to his profile and risk appetite, the client allocates “risk budgets” and chooses which assets to invest in, and the tool generates management transactions on this basis. This results in individualised advice and portfolio management even for smaller clients.

We have been advising and managing pension funds for 15 years and are very familiar with our clients’ needs for transparency. Our clients appreciate the fact that we can consolidate their global bankable and non-bankable assets with a personalised classification and a transparent breakdown of costs. We have also developed solutions for private placements (private equity and private debt). Our structure and size offer our clients undeniable competitive advantages over most banking institutions.

How do you see the dynamic and ecosystem between asset and portfolio managers and custodian banks evolving in the future?

We see our custodian banks as true partners. In the future, we’re convinced that we’ll be moving towards open-banking solutions with data shared in the cloud between the different stakeholders. This approach will benefit banks, asset and portfolio managers and clients alike, and will strengthen our collaboration with these institutions.

We have been very active in improving and standardising processes with each institution, which is mutually beneficial. For example, we have joined forces with asset and portfolio managers and banks with the company We can comply to standardise the asset manager questionnaire on a secure platform with blockchain technology, providing a single point of contact for interactions between institutions. We are currently exploring other areas in which similar technologies could be used to benefit all stakeholders.

The anticipated consolidation of the industry has so far materialised only to a limited extent. We understand that the group aspires to position itself as a partner of choice for this consolidation. What is your outlook for the coming years?

We have a proven track record in this area, with inorganic growth moves that have enabled us to integrate or merge with other companies, including the recent acquisition of Finstoy SA, as mentioned earlier.

As far as the consolidation of the portfolio manager industry is concerned, we foresee two successive waves. The first one, happening now, involves companies that have started the process of obtaining their licence and are anticipating the implications in terms of organisation and the challenges that this represents. The second wave concerns small and medium-size companies, which will realise the concrete impact of FINMA’s requirements once they have obtained their licence, particularly after their first regulatory audit. In my opinion, this second wave will be more significant than the one we are experiencing now.

At the same time, I think we will also see the merger of companies with over a billion in assets under management.