The Swiss banking giant talks to this publication about its work in the philanthropy area and some of the challenges thrown up by recent developments.

Uncertainty is a concept that many, if not all, banks have become inured to in recent years as a result of the 2008 financial crisis. And UBS, Switzerland’s largest bank, is no exception to this fact, especially in light of recent global cutbacks that shook the industry and its investors.

However, for Mario Marconi, head of philanthropy and value-based investing at UBS Wealth Management, three things are certain. Firstly, philanthropic and sustainable investment (or values-based investing, as UBS calls it) are integral to wealth management. Secondly, demand for related advisory services is growing.  And thirdly, Asia will take a leading role in the philanthropic, sustainable and impact investing space.

The UBS philanthropy and values based investing team has offices in the US, Switzerland, Hong Kong and Singapore, with satellites scattered around key hubs in the world. These satellites are set up where the bank is already present, so that Marconi and his colleagues have access to local expertise and an overview of global developments. He highlights the overall UBS network as being a core part of the firm’s value proposition to his clients – managing $1.6 trillion of private assets globally, with over $204billion in the Asia Pacific region, the company is certainly well connected.

Role of wealth managers

“We look at that (philanthropic and sustainable investment) as part of how we define wealth management. There might be some slowdown because of the economic impact, but definitely, demand for advice is growing,” Marconi said in an exclusive interview with WealthBriefingAsia.

UBS Wealth Management became the first bank to build a dedicated professional team in philanthropic advisory back in 2004 and Marconi feels that the role of the wealth manager is becoming increasingly important in clients’ philanthropic experiences.

He referred to some research he came across in the World Wealth Report (conducted by Capgemini and Merrill Lynch Wealth Management, 2010), which concluded that demand for philanthropic-related services offered by wealth management firms is on the rise. Specifically, the study found that advice on financial planning and tax aspects of philanthropy were the most demanded service of philanthropic offerings. Additionally, nearly half of all advisors said their High Net Worth clients were asking for information related to philanthropic project organisation and selection.

 “The point is not to make them (wealth managers) experts,” Marconi said, explaining that their roles are already highly complex. Instead, the key capabilities wealth managers should develop are:

1.      The ability to identify when a client has a need to explore the social investment/philanthropic area.

2.       To be able to engage them in the first discussion on this personal topic.

After this initial dialogue between the client and his or her wealth manager, “the experts need to come in” – the experts being Marconi and his team.

The offering

Marconi is clearly a passionate person – not just about giving back to society, also very much so about his clients. He enthusiastically spoke about treating them case-by-case and supporting them through the initial thinking phase to help them identify a tailored solution.

Thirteen years ago, in response to client demand, UBS WM set up the UBS Optimus Foundation, for which Marconi sits on the board. It works as a hybrid model in that while all the donations come from clients, all the costs are absorbed by UBS. Since its inception, the foundation has worked with over 12,000 contributors, donating close to $130million to over 250 projects in 75 countries.

On a day-to-day basis, with Marconi as the front-man, the advisory team offers a “one-stop-shop to philanthropy”, helping clients to develop their vision and mission; provide structure in the form of foundations and trusts; donate through various platforms, including the UBS Optimus Foundation; carry out due diligence of projects; and to continuously build up their knowledge through education events and studies.

These services are offered exclusively, and generally free, to UBS Wealth Management clients, with Marconi putting emphasis on its ‘more important clients’, presumably the big spenders.

Rising demand

When asked whether demand for these services is growing, Marconi was quick to respond: “Short answer: demand is growing. Around the world.” He gave two reasons why: 

One was that investors realise the complexity of philanthropy and the need for professionalism: “It’s not about how much they spend, which is what I call the ‘feel good’, but it’s about the ‘do good’ - ie, I want to make sure that I have an impact and that the money is well spent.”

The second reason is the emergent feeling for the need to give back. Marconi said: “We see a lot of successful entrepreneurs who get to a point and say, ‘OK, now what is my contribution back to society?’ ”  This is particularly prevalent in Asia with escalating riches and increasing awareness of social issues, including the unequal distribution of this growing wealth, said Marconi.

The future

Making comparisons to more developed economies, Marconi said: “In Europe there is (what I call) a lot of restructuring taking place at the moment, and because of people acknowledging the complexity, I think that they are rethinking their approach (to philanthropic giving/ values-based investing).”

 While typically we might associate philanthropic best practices with countries like the US, being home to names such as Carnegie, Rockefeller, Gates and Skoll, Marconi said that in terms of giving back to the local community, “Philanthropy in Asia is extremely well established, it’s a tradition.”

However, he predicts that the region will spend the next five years or so learning from Western approaches while it is in the process of “building its infrastructure”, before becoming the lead innovator in the field of social giving and investment.

So what’s on the agenda for Marconi and his team of thirty, three of whom are based in Asia? “We are very optimistic about Asia bringing new innovative approaches to philanthropy. Asia is one of the key platforms in the wealth management business, and philanthropy is one of the key components of that business. Asia will lead in shaping philanthropic activities, so with time we will also be expanding,” he said.