“The customer at the center means sacrificing some operating margins,” said the CEO
MADRID, 22 May. (EUROPA PRESS) –
Banco Mediolanum, the Spanish subsidiary of the Italian group, indicated this Wednesday in a meeting with the media held in Madrid that they are going to “bet heavily on Spain” in the business of financial advice for high net worth individuals, since they foresee that “it is going to be a golden decade” for the sector.
In the words of the commercial director, Salvo La Porta, the potential of the business in Spain lies in the fact that there are barely 8,000 financial advisors with a national savings management volume of 1%, while in Italy, the entity’s country of origin, there are 22,000 advisors who manage 22% of families’ savings.
In that sense, he recalled that, although there are not many differences between both countries, in Italy the profession of financial advisor has been regulated since 1991 and is already consolidated, while in Spain the figure of the advisor has gone several steps behind.
In parallel, the CEO of Banco Mediolanum, Luca Bosisio, has observed that its model “is of great interest” to Spanish clients and has expressed that they have before them a “highway” as a way of growth.
They also see this “golden decade” premise in their latest data: net capital raising has increased by more than 50% in the first quarter of 2024 compared to the same period in 2023, equivalent to 261 million euros, a fact that is aligned with the fact that in “a few months” the average assets of clients have increased by 20%.
Likewise, it is worth noting that the Spanish subsidiary recorded a historic profit of 43.8 million euros in 2023, 46% more than in the previous year, while they plan to beat that figure in this year’s accounts.
Precisely regarding the business model with which they intend to structure growth, Bosisio has commented that the axis is putting the customer at the center, a maxim that they specify as follows: “The customer at the center means sacrificing some operating margins.”
In that sense, he has stated that historically, since the 90s, they have been an entity very exposed to technology, already providing Internet service at that time: “the idea there was the possibility for clients to use technology and thus giving them the freedom” that transcends the fixed hours of commercial offices.
Likewise, they have exemplified their proposal to be at the customer’s side in measures such as those they adopted during the pandemic, such as dedicating more than 300 employees to instructing customers in technology.
Going into detail about the financial advice segment (they call it ‘family banker’), which has the largest network of agents in Spain, over 1,600 professionals, Bosisio has stressed that its sales network does not collect payroll, but rather commissions: “You will not find [in us] a family banker that is limited to placing a product, but rather provides follow-up,” he added about his way of working.
Along these lines, the company’s executives have stressed that “having a financial advisor is having a person who looks at the long term”, an idea that they have connected with the words of the president of the National Securities Market Commission (CNMV), Rodrigo Buenaventura, who yesterday focused in a speech on the need for growth in the country, in which there is no adequate mentality for long-term savings.
In line with the takeover bid launched by BBVA to Banco Sabadell, whose resolution will not be known for months, Banco Mediolanum has pointed out that in the coming years this issue “will continue”, which will translate into greater concentration in the sector. banking.
For the subsidiary of the Italian parent company, this represents an opportunity for professional recruitment in Spain: “We are targeting the 100,000 professionals who are now in the offices because with us they can build long and successful careers,” said La Porta, who has pressured to do so before these professionals “get a letter from human resources.”
In a more personal way, La Porta has explained this concentration in the sector with his personal story: “When I arrived in Spain in 2009, in the 700 meters from my house to my work there were 16 bank offices; now there are only three.”
In broader figures, he recalled that since that year Spain has gone from 62 banking entities to just over a dozen, while there are 22,000 fewer professionals in the sector and the number of commercial offices has been reduced to 25,000. levels of the early 1980s: “For banks, offices were an asset until 2009, since then they have been a liability,” commented the president of Banco Mediolanum, Carles Tusquets.
For Banco Mediolanum, all this is an opportunity: “We now have an average of 147 clients per advisor; we can redouble this in a natural way, but this means strengthening the network and targeting the 100,000 professionals in the sector,” the managers have agreed.
On the other hand, they have stated that the growing commitment in Spanish banking to the financial advice business does not worry them, but rather represents a stimulus, while they have recalled that in Italy they already compete with twenty entities with which they share a model. of business.
In addition, they have claimed the experience accumulated prior to the arrival of MiFID II (it came into force in 2018) and which already imposed obligations regarding advice, such as suitability tests.
“We were already trained, Mifid II did not represent a change for us, but it did change the traditional Spanish entities,” they argued.
In line with the “paradigm change” motivated by the ECB’s interest rate increases from 2022 (now at 4.5%) after years of negative rates and in a framework of uncertainty due to geopolitics, Bank executives Mediolanum have claimed that from the beginning of 2023 they remunerate their deposits at 4%.
“We are capable of giving up some elements in our accounts in favor of clients, although we are not a systemic entity here,” explained the firm, which brings together 25% of its managed assets in this product.
Likewise, they have drawn attention to the competition based on the fact that, citing data from the Bank of Spain, the average remuneration of Spanish deposits is 2.4%.
On the other hand, they have admitted that there is a “high percentage of growth” in the credit business, since the default ratio, 0.55% in Spain (three times below the average for the entire banking group), It’s “interesting.”
