61 patterns Trade Offs 1 The bank serves two diΩerent markets with very diΩerent dynamics. Advising the wealthy is a long-term, relationship-based business. Selling fi nancial products to private banks is a dynamic, fast-changing business. 2 The bank aims to sell its products to competing banks in order to increase revenues—but this creates a confl ict of interest. 3 The bank’s product division pressures advi- sors to sell the bank’s own products to clients. This confl icts with client interest in neutral advice. Clients want to invest in the best products on the market, regardless of origin. 4 The cost- and eΩiciency-focused transaction platform business confl icts with the remuneration- intensive advisory and fi nancial products business, which needs to attract costly talent. 5 The transaction platform business requires scale to drive down costs, which is diΩicult to achieve within a single bank. 6 The product innovation business is driven by speed and quick market entry, which is at odds with the long-term business of advising the wealthy. other product providers advise product r&d marketing platform management custom-tailored wealth manage- ment services fi nancial products transaction management intimate personal relationship key account management wealthy individuals & families private banks private banks independent fi nancial advisors brand/trust product ip transaction platform personal networks sales force transaction platform platform management hr: r&d hr: private bankers management & advisory fees product & performance fees transaction fees The Private Banking Model • Relationship Business • Product Innovation Business • Infrastructure Business 1 2 3 4 5 6 unbundling business patterns bmgen_final.indd 61 6/15/10 5:33 PM