Digital technology touches almost everything we do today – including banking and investing. Indeed, we can carry out any number of transactions with a couple of quick taps on our smart phone.

But the technology is not a one size fits all solution. As you move up the wealth curve the complexity of managing large pools of wealth to meet the expectations of its owners requires a more hands on approach.

It is why the personal relationship that is at the heart of private banking has never been more important. Today’s wealthiest and most successful individuals and families are intent on getting so much more out of their money – through philanthropy, through responsible investing, through developing and expanding family businesses, and through the successful transfer of their wealth to the younger generation.

The focus remains on directing wealth to where it can grow, but it is enhanced with an equally important goal of making  a positive difference to the world.

It may be that you require the ideas and networks that support your philanthropic passions, or the insights and advice that ensure a holistic approach to responsible investing. You may need the framework and expertise that necessarily attends family governance and the successful transfer of wealth between generations. All go well beyond the remit of DIY technology.

Instead, they call for the highly personal approach of a private banking team – one that is grounded in years of experience and involves a deeper understanding of your long-term vision and goals.

Pursuing the bigger picture

We see it time and again at NAB Private Wealth as more and more of our clients seek to build portfolios that reflect their social conscience –while still achieving superior long-term returns.

Darian Kuzma, Private Client Executive at NAB Private Wealth, for example, recently worked with a client who had inherited their family’s wealth. However, it was mostly tied to listed shares in companies that didn’t reflect the new generation’s passion for environmental sustainability. Moreover, the portfolio suffered from little-to-no asset class diversity.

“When they came to us, their motivation was to transform the portfolio to better align with their passion for sustainable and responsible investing,” Kuzma says.

“They were conscious of environmental issues, both domestically and globally, and wanted to do their best to make a difference in how they allocated their capital.” At this point, we decided to engage our investment partners JBWere.

After a series of discussions that delved into the family’s goals and aspirations, the wider team at NAB Private Wealth including JBWere were able to develop a portfolio that closely aligned with their values. Deon Cavarra, Director Wealth Advice at JBWere explains more. “This included a mix of sustainability-linked infrastructure, healthcare-related property, social housing and green bonds, along with publicly listed and private investments that had an ESG overlay”.

At the same time, the family hoped to maintain a certain degree of liquidity without holding too much cash. “Together with their NAB Private Banker, we set-up a line of credit against the investment portfolio,” Cavarra explains.

This allowed the client to withdraw funds for short-term purposes, only incurring interest charges when funds were drawn. As a result, the family could move quickly to invest in real estate assets, private businesses and external managed fund opportunities.

The result was a portfolio that truly reflected the family’s shared vision, while also meeting their ongoing practical needs.

For generations to come

It was a similar story with another long-term client who approached NAB Private Client Director Sangita Singh about setting up a private ancillary fund (PAF) – a type of charitable trust that allows you to create your own personalised giving program that can operate into perpetuity.

The client had a passion for social justice and wanted to instil this in his children, ensuring his legacy endured for generations to come.

As Singh explains, the first step here was getting the right people in the room to collaborate and exchange ideas. This included JBWere’s Head of Philanthropy and its Head of Alternative Investments and Responsible Investing, plus the client’s private banker.

Next, the client’s children were brought in on the discussions – to better understand their father’s vision but also to help shape it.

They have been an integral part of the family’s wealth strategy ever since. “It was quite the journey,” Singh says. “The children are now in their late twenties and the client is in a great place to continue to go on that journey with them… to really instil a legacy that will be passed down the generations.”

Making things simpler, but also better

There’s no doubt it’s the personal relationships here that help to effect real change – to build trust and confidence and help make a long-term difference.

Nevertheless, digital technology clearly plays its part as well. In fact, when it came to setting up the client’s PAF, it was key to ensuring the fund ran as smoothly as possible.

 “The [client’s fund] requires quarterly reviews between JBWere and the client, but because of our digital reporting capability, we’re able to simplify administrative tasks, and focus our energies on delivering better outcomes for our clients,” Singh says. “It’s especially beneficial at tax time.”

Indeed, digital technology can be a great enabler in many instances. “A lot of people want to simplify their life and that’s a large part of it,” Singh points out. “Understanding their wealth and reporting on it takes a big chunk of their time. So our role is to make life easier for our clients through our digital capabilities.”

Moreover, if you’re keen to go it alone, digital technology can shine in other ways.  “We’ve seen our private clients embrace direct access  to  FX capabilities that allow them to hedge offshore investments or to trade in currencies ,” says Singh.

However, digital technology and a DIY approach can’t hope to address the complexities that are inherent in dealing with large sums of wealth – particularly now when a growing number of people want to ensure they’re genuinely making a positive difference.

You could say its back to basics, but at the same time the ‘bascis’ are evolving, says Singh: “A decade ago responsible investing, inter generational wealth transfer and even philanthropy were sophisticated add-ons to the private wealth offering. Today, they sit alongside the traditional focus of enhancing and protecting generated wealth.

Whether you’re focused on growing, preserving or sharing your wealth, or shaping the world around you, a highly personal approach from a team of experts is indispensable.

The information contained in this article is gathered from multiple sources believed to be reliable as at May 2023 and is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on the information in this article you should consider whether it is appropriate for your your objectives, financial situation or needs and consider the relevant Product Disclosure Statement, Target Market Determination or other disclosure documents The clients featured in this article consented to the use of these case studies. The nabtrade service (nabtrade) is the information, trading and settlement service provided by WealthHub Securities Limited ABN 83 089 718 249 AFSL No. 230704 (WealthHub). WealthHub and JBWere Limited ABN 68 137 978 360 AFSL 341162 (JBWere) are a wholly owned subsidiaries of National Australia Bank Limited ABN 12 004 044 937 AFSL and Australian Credit Licence 230686 (NAB).  NAB doesn’t guarantee the obligations or performance of its subsidiaries or the products or services its subsidiaries offer.