Altoo stands for “all together”, which gives a good indication of what this firm is all about, namely, to provide support to independent investors regarding how their assets are faring, including contracts, cash flows, new calls for capital, and so on. Making use of advanced technology, the company is able to address this. And, total secrecy and discretion is a hallmark. The company’s clients are the focus, and the firm’s key philosophy is to make it easier for the client, employing this latest technology.
Altoo initially started in December 2017, as a distressed technology buy-out from Switzerland’s first fintech bank FLYNT. This bank was targeting entrepreneurial families and received its banking license from the Swiss banking regulator FINMA in July 2017, but ceased its activities shortly afterwards due to funding challenges.
Martin Stadler, Altoo’s CEO, was hired by FLYNT in 2016 to build up the business development, took the opportunity together with the core team of FLYNT employees, buying out the core technology and the hardware for private cloud services at a distressed asset price from FLYNT. This transaction was financed by two Swiss entrepreneur families, who have been using FLYNT’s services already. Today, Altoo has 24 employees, all also being shareholders in the firm, with stock holdings that they actually paid for, i.e. “skin in the game”.
Altoo was trying to take advantage of the strong tradition of Swiss wealth management banking. While the cost of running a business such as Altoo in Switzerland is relatively high (high salaries, etc.), the company is attempting to sell itself through “Swissness”, i.e. that this guarantee of premium service and the data storage in Switzerland would be of value to its clients. Altoo is the only company providing this unique combination of service and technology with the 100% commitment to Switzerland. The company seem to be able to attract, say, four to five new customers per month, mostly from family businesses, and including many from outside Switzerland. The typical annual cost for a client might be within the range of CHF 25,000 – 30,000.
Altoo’s founder and CEO, Mr. Martin Stadler started out working at UBS when he was 16 years old, at the bank’s branches in St. Gallen and in his home village, Toggenburg. In parallel he studied economics at the Fachhochschule in Easter Switzerland earning a degree in economics. He is thus an example of the highly successful Swiss way of studying (20% of the time) and working (80% of the time).
At the age of 26, he was sent by UBS to Singapore, and given the responsibility to serve wealthy German-speaking investors. After three years, his career took him back to UBS in Zurich, where he continued to work as a client advisor for entrepreneurs and single family offices. In 1996, after being 20 years with UBS, he left for the endeavour with FLYNT.
The Swiss banking sector was strong, in Mr. Stadler’s view, as it has been for a long time. But, for the banking sector, the challenge would, of course, be the same as in most other businesses sectors with a past history of success: how to make good even better? Here there might perhaps be several opportunities for future strengthening:
How might a client’s specific needs be more realistically put at the center when it comes to the work of banks’ client advisors, in contrast to a “push” to “sell” the bank’s own products?
How can a bank’s calls for formal internal procedures (often imposed by FINMA) be modified in such a way that a client manager can spend more time with his/her client?
“Publicly traded banks are, of course, under pressure to come up with relatively sturdy bottom line results on an ongoing basis i.e. “to deliver every quarter”. This stands in contradiction with the long-term nature of a client relationship, which is necessary to build trust in private banking.”
The renumeration of senior bankers, including account managers, is typically high, and largely a function of achieving the above-mentioned, bottom line stability. How can renumeration and incentives be modified to become more in line with supporting customers’ needs?
How can more openness regarding clients be achieved, in the sense of acknowledging what are a bank’s key areas of competence? Are proposed “solutions” “honest”? Non-listed banks may perhaps have an advantage when it comes to this.
Senior management might often find its role to be primarily “controlling” that expected revenue streams indeed might be coming. How can this group, instead, be “empowered” with rethinking their bank’s future strategy, so as to implement changes proactively?
The size of some of the leading public banks may represent a challenge here, in the sense that investing for such banks in new assets within their wealth management offering may “crowd the market”, rather than being opportunistic.
The above challenges, or dilemmas, facing many leading banks today, may of course, make it difficult to “make good even better”. Perhaps a way forward for some of these large traditional banks might be to try to build their own “new” banks, with more reasonable cost levels and with a stronger customer focus, i.e. a call to “reinvent” themselves!
So, what is. Way forward for the typical family firm, with its unique portfolio, when it comes to seeking support from the banking sector? Perhaps the following trio of needs might give signals regarding a way forward:
Choose a bank to handle one’s daily needs, including cash flow management.
Choose another bank to support the family business when it comes to coping with investments. A non-listed bank might be ideal here.
Choose an organization to support the family, with its portfolio, when it comes to maintaining a firm oversight over the portfolio.
A way to accentuate the difference between the second and the third issue in the above is to think about it in terms of “b2b” or “b2c”, as follows:
b2b: this is for investment bankers
b2c: this is for providers of portfolio transparency, above all, perhaps, to cope with the increasing complexity that typically often takes place. Total wealth aggregation is typically key, and this must allow for secure interactions.
Two examples might serve to illustrate how a company such as Altoo might add value, especially during extraordinary periods such as the one with the Corona crisis:
The stock market fell dramatically around the 19th March, dropping more than 10% on an overall basis. Many issues seemed to come together in one day! To have the necessary information in order to cope with all of this might be key. Actions might have to be taken at a rapid pace, in order to minimalize economic losses! The overall structure provided by Altoo was a great help.
A successful family-owned conglomerate was de facto managed by the father, in his role as the pater familias. The children were only involved on a partial basis. When the father suddenly died, the issue came up of whether an important part of the information, the “corporate memory” of the father, has been lost. It did not take long, however, before the rest of the family were able to reassess the portfolio they had inherited, for then to make three key changes:
Learn more from the data
Restructure the group
Reassess the overall risk, which was deemed to be too high.
Altoo was indeed a valuable resource!
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