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Seven generations of bankers behind a financial coach

Boris Matijas, Archipiélago

Seven generations of bankers behind a financial coach

Article produced for ESADE ALUMNI FAMILY BUSINESS CLUB NEWSLETTER:

FAMILY BUSINESS TRANSFORMATION


A portrait of Alexandre Arnbäck (MBA 99), seventh-generation member of LODH and author of Heal Your Investments: A Story Your Banker Will Never Tell You.

The Swiss private banking firm Lombard Odier Darier Hentsch (LODH) is one of the world’s oldest banks. Since 1796, it has been owned by the four founding families and led by eight partners appointed by the families.

It is an exceptional case, especially considering the statistics highlighted by

Alexandre Arnbäck (MBA 99), which suggest that companies survive, on average, just 50 to 60 years. “The only way a family business can last,” says Alexandre, “is by authorizing – or, even better, by facilitating–innovation within the company. But this is actually very difficult, because once a business gets comfortable with its way of doing things and starts making money, it is very difficult to change things. ”For this seventh-generation member of the firm, the key is to let the next generation have the independence to create something new and be innovative enough to do better than average.

“What sets this type of bank apart is the fact that it’s a family business–a society of people rather than a corporation,” says Alexandre. “This makes the partners’ participation, their approach, and their vision for the business much more intense.

They’re not just the owners; they’re personally responsible. Their own money is on the line.”

In Alexandre’s opinion, one key to the bank’s success is the strict selection process that all family members who aspire to work there must undergo. “Just because you’re a family member doesn’t mean you automatically own a share of the company,” he says. Prospective partners must be invited to join by the current partners. As a result, the selection process is tougher than it is in most family businesses,“ where the general practice is for the next generation to inherit the company”.

Until he was 29, Alexandre didn’t believe he would actually work at LODH.“You’ll never work with us, ”is what he had heard his relatives say since he was young. Then one day, shortly after he completed his studies at ESADE, he was invited to work at LODH. “I don’t think they changed their minds,” he says. “This is their way to encourage people and make them understand that it’s not easy get a position at the family bank. There’s tough competition and you have to work for it. If you had told me when I was 20 that my job was guaranteed, I would have been much less motivated.”

Alexandre’s decision to leave LODH was just as unexpected as the fact that he joined the bank in the first place. When he joined, he had a romantic vision of the “gentleman banker” who built the reputation of a private bank by establishing and nurturing close relationships between the customers and the owners. “That’s what makes for shared values and ideas and facilitates the development of such banks,” says Alexandre.

Times had changed, however, and the new way of working did not meet Alexandre’s expectations. “What bothered me the most about my previous job,”he says, “was that the banker was not an advisor but rather a salesman–like a car salesman.

Bankers make money by selling products and transactions, and this can potentially lead to conflicts of interest. My motivation stems from the idea of building a coaching-style relationship. ”His vocation is to be a “financial coach” who guides investors by providing advice that leads to “a healthier financial life”.

In Alexandre’s vision–laid out in his book, Heal Your Investments: A Story Your Banker Will Never Tell You, co-written by Trevor Pavitt– the customer plays the central role, taking control of his own financial life and making informed decisions rather than buying products that he doesn’t understand.

Alexandre’s goal in writing the book is bold: to help people change things because“ those who work at banks and other suppliers of financial products do not want to change, for fear of earning less”. He hopes that readers will realise that they can have a healthier financial life just by gaining knowledge.

He is very grateful for everything he learned while working at LODH, which he describes as a chance to gain “marvellous insight into how the financial world works”.

Alexandre cites two factors that hastened his departure from the family bank: first, an internal process that led him to rethink his life, which prompted him to leave the bank and create something of his own“ without having to fight to change things from the inside”; and second, his creative passion for being an entrepreneur. “I’ve always been very independent, and I could only put this freedom and creativity to use if I left the family business,”says Alexandre. His family’s response was not very encouraging.“ It was a difficult experience for the family, but now, five years later, they support me more,”he says.

He speaks directly and honestly, with the clarity of someone with strong personal integrity. He grew up in one of the world’s most prestigious banking families and has experienced the financial world from within. Many would consider his position fairly comfortable, in terms of economic standard of living. But he was brave enough not to settle for anything less than his own path.

Alexandre expresses gratitude for the “fantastic experience ”he had at ESADE.“ In my professional life, I have met people from Harvard, Princeton, Yale and other great schools, but I have never felt that my knowledge is inferior to theirs,” he says. “Plus, ESADE has given me contacts, friends and a work ethic that has been a great help in my career.”


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