In safe hands

In the battle to win the business of the very wealthy, private banks are developing ever more refined bespoke services, and even delving into clients' psyches to help hone their investment strategies.

Private banks have always performed a myriad of services for their clients beyond mere banking. Among the private banks that pride themselves on listening closely to the needs and aspirations of their high-net-worth clients, some are developing services that clients would be hard pressed to find elsewhere. Coutts has just developed a network of like-minded investors, while Barclays has been focusing professional attention into the inner workings of the ultra-high-net-worth (UHNW) mind.

"My area of fascination is how people actually make their financial decisions," says Dr Peter Brooks, Barclays' behavioural finance specialist, who is based in Singapore. Brooks works with a team of experts on behavioural portfolio theory, the psychology of judgment and decision-making, and decision sciences.

In part, the impetus has come from lessons learned during the financial crisis, which he says led to an increased focus on the working of investment behaviour.

"A lot of people have recognised in the industry much more widely now that behavioural finance is an important part of wealth management," he says. "I see people talking about emotion in markets much more, and whether they realise it or not, many market commentators [express emotion] when they're on the television or [in] the press."

Although he trained as an academic - holding a master of science degree in economics and econometrics and a doctorate in behavioural and experimental economics - Brooks differentiates his work from that of financial academics, who focus on how people make bad financial decisions rather than helping people make better financial decisions. He also distances himself from wealth managers who typically assess their clients' risk appetite, provide them with an optimal portfolio and then effectively abandon them, he says.