Ever since the banking crisis of 2008, new disruptive players have emerged in the finance sector, aiming to revolutionise investment and asset management with new technology, services and client relationships. We focus on Capitalium Advisors®, a Geneva-based firm taking asset management by storm.
Fintech is the new frontier of disruptive innovation in finance, utilising new technologies and innovating new forms of customer service. A report by Gelis and Woods for Kantox said that since 2008, investment in the fintech sector has tripled and that investment in the sector is forecast to reach $8 billion this year.
Gelis and Woods argue that the interest in fintech is precipitated by factors, including anger and a lack of trust towards the traditional banking sector and that sectors poor adjustment to economic change after the 2008 crash, difficulties in accessing credit, widespread adoption of web-based technologies and smartphones.
Capitalium Advisors® is one company actively engaging with fintech and offering a new way of doing finance. It’s based in Geneva and describes itself as an independent wealth management company regulated by the ASG (Swiss Association of Wealth Managers). Established in 2016, in two short years it has joined Switzerland’s largest 10% asset management firms. Together with its sister company, Schoeb Frote® in Neuchâtel, Capitalium Advisors manages over CHF 1bn.
Capitalium argues that its success is down to the firm’s innovative approach to investing. While many financial institutions focus on cost-cutting, Capitalium invests in new solutions.
The firm’s approach is client-centred, and the dedicated and experienced team at Capitalium develop solutions tailored to meet the client’s exact requirements.
Capitalium have a business model which is based on three complementary strategies. Alain Zell, Managing Partner and CEO of Capitalium, calls the first strategy “squeezing the lemon,” which means applying best practice standards to what they do and offering a “fair value” for services.
“The second stage,” says Zell, “is based on a “marginal gains” approach – building an efficient setup in every part of the business, from portfolio management (including an open architecture philosophy) to the tools we have developed together with financial fintech. It is all about enhancing the company operational leverage.
“Last but not least, we run a strategy called “+1” that aims at driving growth based on client’s specific needs. In doing so, we stick to the area where the company can bring as much added value as possible. It has also helped us to draw a comprehensive and coherent offering along the way.”
The firm isn’t part of any financial establishment, allowing the team to deliver services entirely independently without any conflict of interests and with the standards of excellence that we have imposed on ourselves. The company’s priorities are protecting and expanding its clients’ assets.
“The banking environment,” says Zell, “went through a challenging decade (end of banking secrecy, financial crisis, pressure on margins, digitalisation). As a consequence, the nature of wealth management is slowly evolving from hermetic silos into an open ecosystem.
“Since most players are facing barriers to developing new products, services, or solutions, the more flexible and entrepreneurial actors (including the newcomers) can benefit from this transitional period by offering more unique solutions, without requiring gigantic capex.”
The firm’s investment in fintech has shaped Capitalium offerings. “To add real value,” says Zell, “wealth managers have to be able to identify appealing solutions wherever they are. We did so by investing early with fintech in areas such as asset consolidation, performance audit, participative investment.”
CASA Invest®, CASA Nexgen® and CASA Advice®
Capitalium offers three different services.
CASA Invest® manages discretionary mandates, consultancies and supervisory services. Their investment landscape covers all types of financial assets and monetary bases. They implement tax-efficient management in the structures and the investments they select.
They manage by conviction. And the avoid ‘soft consensus’ at all costs because it undermines performance over the long-term and marginalises risk control. Capitalium privilege ‘open architecture’ financial products. This guarantees them access to the best providers and the expertise of specialists. These requirements are accompanied by a clear code of conduct: refusal to receive retrocessions, no bias towards highly marginal products, no unjustified portfolios turnover and a systematic hunt for ‘hidden costs.’
CASA Nexgen® is the non-financial branch of Capitalium. It is targeted primarily at families, helping them tackle challenges relating to the transmission of patrimony. The company offers an ecosystem built upon three pillars which the younger generation interacts with on a regular basis: investment, education and mentoring.
The company is dedicated to engaging with the millennial generation, appointing a 19-year-old bio-engineering student to the board of directors. Alain Zell says that “Millennials have become extremely connected with sense-making, including when it comes to investment. Emerging wealth is now in the hands of this generation who are either creating new wealth or inheriting from the families.”
The final offering is CASA Advice®, which helps clients to maintain total control over their private affairs. The company has equipped itself with state-of-the-art tools that allow for granular monitoring and analysis of financial assets: Connect by CASA (listed assets) and F&P System (not listed assets).
The firm works closely on that offer with the F&P Group in Neuchâtel offering services covering legal advice, notarial services, tax services, advice regarding business management as well as administrative services. The pooling of the skills of Capitalium Advisors®, Schoeb Frote® and F&P Group allows Capitalium to assume limited or global mandates which can include the management of a ‘Family Office’ type structure.
In all its services, Capitalium collaborates directly with clients, ensuring that its solutions simplify their finances and integrates easily into their lifestyle and principals. Clients benefit from unique financial expertise, which puts transparency, excellence and simplicity at the forefront.
The firm argues that it builds lasting and trustworthy relationships with its clients and put their best interests at the heart of everything that it does. Says Zell: “More than ever, clients are seeking a relationship based on trust in which the lack of conflict of interest allows a dialogue that goes to the essentials – preserving, growing and guaranteeing the transmission of their assets. We believe we deliver on these essentials.”
It’s still early days for Capitalium Advisors®, but the firm has put itself in a situation to offer a genuine alternative to traditional banks.
The firm says it will continue to expand both organically and externally while continuing to demonstrate the added value of a business model that is close to its clients, with no conflicts of interests.
Backed by common sense, hard work, boldness and enthusiasm, the company has ensured that it is well positioned to implement these ambitious plans and achieve even greater successes for clients and the company.