Investec offers One Place for banking by wealthy clients

WEALTHY South Africans’ banking needs have changed in the past decade as exchange-control regulations have eased, and they have found themselves forging complex relationships with multiple global financial service providers.

A wealthy South African might have a private bank and investment banking relationship domestically, as well as offshore banking and investment accounts with overseas service providers, said head of Investec Wealth & Investment South Africa, Henry Blumenthal.

In response, Investec has developed a single offering where wealthy clients can see all their accounts.

So, for example, a client could see in one platform their offshore Swiss accounts, their rival banking institutional accounts, their UK credit card balance, the value of their art, vintage cars or race horses, and their share options.

All of this is pulled into one balance sheet, giving them a complete view of their assets, liabilities and the resulting net asset value. This can be viewed in any currency. Clients can also transact through this single platform, known as One Place.

Mr Blumenthal said this offering was aimed particularly at South African clients.

“Up until 10 years ago, because of exchange control regulations, South Africans had no international needs because they weren’t allowed to have,” he said.

In the past 10 years, South Africans were first allowed a R750,000 once-in-a-lifetime offshore allowance.

This was subsequently increased to R1m then R2m. Now South Africans are allowed to take R4m a year offshore, as well as a R1m discretionary offshore spending allowance.

Investec has found that this has changed clients’ needs, while at the same time the bank has developed its international capability through its operations in the UK.

Investec has 238,000 corporate clients and 171,000 wealthy individual clients globally.

Research by consultancy New World Wealth has found that 22% of South Africa’s ultra wealthy had second homes abroad, below the global average of 30%; and held about 20% of their wealth offshore — also below the global average of 30% due to the impact of exchange controls.

New World Wealth, with offices in the UK and South Africa, bases its analysis on its database of more than 600 of the country’s wealthiest people, as well as other databases and the wealth management market.

Mr Blumenthal said Investec had developed One Place as it had realised its clients had complex, time-consuming banking needs.

“Hearing (a client) say, I am going to see what is happening with my Goldman’s account, and, just excuse me, I need to pay my daughter’s tuition fees at Oxford, we felt this gap in what the client was experiencing and what could be a wonderful, practical solution,” he said.

One Place is plugged into 6,500 platforms, including offshore share accounts, loyalty reward programmes and insurance policies held at various institutions.

As Investec administers the share incentive schemes for almost 60 of the top listed companies in South Africa, One Place is able to show the value of an executive’s share options.

“If you are an executive you can see your share options, which is where a lot of corporate executive wealth is tied up in South Africa,” said Ryan Tholet, head of Investec Private Bank South Africa.

Investec plans to roll out One Place to its UK clients in late October, but sees it as “very much a South African story”, said Mr Tholet.

“When we talk about making a payment internationally from South Africa, it is an exchange control-driven event. From the UK it is just a simple transfer. But the technology and the integration are universal and that we will roll out,” he said.

Investec listed on the London Stock Exchange in 2002, retaining a JSE listing.

It is now the third-largest private-client investment manager in the UK, with £27bn under management. In South Africa, the wealth and investment division has R256bn in assets under management.