The main thing is complexity! This sums up Deutsche Bank's new growth strategy in wealth management for the super-rich. Banks refer to this as ultra-high-net-worth clients (UHNW) - in other words, the particularly wealthy private clients within wealth management. Although there are relatively few clients in this segment, the business is highly profitable.

According to a study by BCG, there were 2,900 super-rich people in Germany in 2022, who together own around a fifth of the country's total financial assets. In its Global Wealth Report 2023, UBS predicted that the number of extremely wealthy individuals worldwide is likely to rise to 372,000 by 2027. However, the figures should be treated with caution, as each bank defines the segment differently.

As part of a new growth initiative, Deutsche Bank has recently repositioned itself internally in its business with the super-rich. „What's new above all is the direct and regional responsibility on site,“ says Stefanie Rühl-Hoffmann in an interview with Börsen-Zeitung. She has been with Deutsche Bank for almost five years and was initially head of Wealth Management in Munich, later the Central-West region and most recently the Central-South region. In the future, she will be responsible in Germany for expanding business with existing clients and acquiring new UHNW clients for the bank.

Until now, particularly wealthy clients have been served centrally from Frankfurt. This is now set to change. To this end, the bank has set up its own UHNW teams - so-called Client Service Teams - at the six existing wealth management locations in Frankfurt, Düsseldorf, Hamburg, Berlin, Munich and Stuttgart.

Each of these teams consists of a trio: a relationship manager who looks after the client relationship, an investment manager as a capital market expert and a so-called Client Service Executive. The latter is basically an assistant who is responsible for administration and customer service. The team currently comprises around 50 employees and is expected to grow to around 60 in the future. „However, there won't be a big wave of recruitment,“ says Rühl-Hoffmann.

The seven specialists of the so-called Financial Engineering Team are now also part of the UHNW team. This team has been in place since 2002 and already looks after wealthy private clients and family offices. „They build the entire financial architecture for the client,“ says Rühl-Hoffmann. There is also the so-called Growth Office, which is responsible for implementing the growth strategy in a structured manner, but for which a head is currently still being sought.

The regional relationship managers are also to have their own top management. Michael Kremzow will be responsible for the North and West regions, while Rühl-Hoffmann will temporarily take over responsibility for the South-East region, although this is not intended to be a permanent solution. The Investment Managers will also have their own head, with Björn Gebhardt. A manager is still being sought for the Service Executives. In the final stage of expansion, they will all report to Rühl-Hoffmann, who will report to Lars Stoy, who heads the German Private Clients Bank - and thus Wealth Management and Private Banking.

The new organizational structure is more complex than the previous one. Rühl-Hoffmann hopes that it will lead to the client group being handled in a more structured way than before. The idea is to interlink the private client bank, corporate bank and investment bank more closely, thereby identifying more potential UHNW clients and being able to offer them a broader and better range of services. „Only when you focus on something, allocate clear responsibilities and implement it systematically can the potential be leveraged,“ says Rühl-Hoffmann, hinting at the shortcomings of the previous approach.

The bank remains silent on the exact number of customers. „It's not that there are thousands,“ says Rühl-Hoffmann. It's more likely to be a three-digit number of customers. There are no stoic asset limits as to when a customer falls under the jurisdiction of UHNW. In most cases, these are assets well into the three-digit million range. „We are active in the upper end of the UHNW segment,“ says Rühl-Hoffmann. The complex asset structures in Germany are the decisive factor.

These are mainly entrepreneurial assets where the bank has direct access to the people responsible or to the intermediary family offices. Family or church foundations are also among the clientele. A typical example of when the UHNW team becomes active are cash events - for example when an entrepreneur sells his company.

Deutsche Bank does not wish to comment on this. However, it can be assumed that the UHNW team must have followed the sale of Viessmann's air conditioning division for 12 billion euros with great interest. Especially as the billionaire family recently invested in the wind farm operator Encavis together with the financial investor KKR.

The bank is keeping a low profile on its specific growth targets. It is targeting the most profitable segment within the private client sector and wants to grow sustainably, efficiently and profitably. For 2023, the bank reported an after-tax return on tangible equity of 4.5% for the entire Private Clients Bank - a fraction of the UHNW returns. Expanding market share and acquiring new customers is a goal against which Rühl-Hoffmann will be measured.

„This is not a mass campaign, but it is a growing market,“ says Rühl-Hoffmann. Growth comes from the sale of companies or start-ups that become large. The bank does not communicate how much market share or assets under management it has in the UHNW sector to date, nor does it communicate specific target figures. However, the topic is cross-divisional and therefore very relevant for the bank.

The so-called alternative asset classes are becoming increasingly relevant for the super-rich - above all venture capital, private equity and private debt. This asset class, which was initially reserved for institutional investors, wants to open up more and more to wealthy private individuals. Deutsche Bank is focusing primarily on individual cooperations, but wants to expand its offering in all private market asset classes. According to Rühl-Hoffmann, Deutsche Bank already offers UHNW clients access to venture capital providers and works together with a private equity investor specializing in the consumer goods sector.