Giovanna Lagutaine is a banker through and through. In our interview, she tells us about the inspired vision of Mayer Amschel, the founder of the Rothschild dynasty; about what it is like to work for a family bank like Rothschild and what Rothschild and Hermès have in common.
Rothschild is a big name in European history and in the world of finance. Is it a particular honour – or perhaps even a burden – to work for such a brand?
It’s an honour, of course, because Rothschild is more than just a brand. Behind the name is a real family steeped in banking tradition, stretching back more than 200 years. We’re currently in the middle of the transition from the sixth to the seventh generation. Not many family businesses can boast such continuity, and certainly not listed companies.
Why do you think the Rothschild family has succeeded in this regard where others have failed?
The founder of the family firm, Mayer Amschel Rothschild, was an exceptional businessman based in Frankfurt. He taught his sons that they would be more successful if they worked together, rather than alone, sharing talents and profits and supporting each other. In 1810, Mayer Amschel formed a partnership, with his sons, which embodied these principles. He emphasised the importance of a long-term view and of dealing with clients in a fair and open way. After his death, his five sons developed the business across Europe, not just in Frankfurt, and used their own communication style and network to support it. These days, everyone is talking about globalisation and new communication technologies, yet these concepts, as well as innovation, have always been part of the Rothschild business model.
What was so special about their business model?
In addition to the geographical presence, their confidential and rapid communication system also enabled them to be absolutely up-to-date on the important social and political developments in those locations. Information has always been crucial for making good business decisions. They were able to lever their trans-European knowledge in support of their first major client, the Elector of Hesse, who entrusted his assets to the family when Napoleon invaded his territory. At the same time, they earned a mandate from the British Government and these two things – skilful management of the Elector’s portfolio and successful execution of a complex series of transactions – led to the family becoming recognised as a major financial house. The Rothschilds, innovators and leaders in this field, also helped states such as Prussia, Austria and the United Kingdom with financing.
Nevertheless, even the Rothschild family have had some downs to go with the ups?
Yes, they have. When French President Fran.ois Mitterrand nationalised Rothschild Bank in Paris, in 1982, this was a serious blow for the Rothschilds. However, they bounced back with considerable entrepreneurial zeal and set up a new bank from scratch. This is now the Rothschild Group.
You manage clients for Rothschild Bank in Switzerland. Is being able to mention the family’s long-standing history an advantage?
The name Rothschild certainly gets the attention of the people you are talking to. If we contact someone, at the very least we receive an answer. Our former Chairman, Baron Eric de Rothschild, used to say that the name would get you a better table in a restaurant but no more than that. Ultimately, it’s about the professionalism. Clients are not satisfied with a good name alone, and rightly so.
Has this changed over time? Yes, it has. Clients, these days, are well informed and are looking more for a partner than simply a bank that handles their financial affairs. This is particularly so for us since most of our clients are entrepreneurial families and they are used to questioning things and being involved in decisions. You need to be professional and well prepared to interact with this type of client on an equal footing.
That takes a lot of time, though, and time costs money. How does that work out in an environment where all banks are having to make savings and cut back on their services?
We have relatively few clients per relationship-manager. The partnership-based support we deliver would not be possible, otherwise. However, we look after our clients in a team, which means the time we have to spend on this can be spread around. Furthermore, there is also a trend towards greater volumes of assets per client.
So, assets per client are greater than before. Are there any other trends?
Yes, there are. Although most clients are still men, I have more and more women as clients. In the past, women often shied away from financial matters. Thankfully, that has now changed. Moreover, women also mostly ask very good questions, with keen attention to detail. Another trend in banking is, of course, digitalisation.
Does that mean clients want an Internet bank? Some of them do but there are others who still appreciate being able to discuss things with a professional partner. Rothschild will never become an online trading bank. We’re not the right choice for any client looking for that. That said, we are taking advantage of digitalisation, in that it is helping us to increase efficiency, deliver better monitoring and reporting for our clients and to structure information.
Everyone has access to information these days.
That’s true. However, in this age of infinite means of communication, much less real communication is taking place. In other words, despite the glut of information, nobody is really informed any longer. That’s where we come in – intelligent partners who clients can talk to and who can structure, prepare and interpret the information.
Rothschild is also associated with wine and art. Do clients come to you because of that?
No. Although these are areas that interest many of our clients and Rothschild does indeed have a lot to offer in these respects, as I said before, our clients are mostly entrepreneurial families. We are an entrepreneurial bank for entrepreneurs, a family bank for families.
Let us return to the subject of your brand. Which luxury brand do you think is most comparable with yours?
A few come to mind, but I’d choose Hermès. Hermès is synonymous with style and tradition, they make iconic objects of incredible quality. It also has a rich family history with the family still involved in the business. We move in the same space and have a very keen awareness of the Rothschild family being with us. Our family is also actively involved in the business. I certainly have the feeling that I’m part of a family company.
Despite the size?
Yes, because our daily business centres on people, and because we don’t have some financial investors as our owners who want to see figures every three months. We don’t have to sell products quickly and we don’t have any false incentives. The Rothschild family takes a long-term view.