How do new technologies help or challenge your daily work?

Caroline Quéré. —“Digital transformation journey is key for the future of the whole financial sector: we need to embrace new technologies, focus our efforts on clients’ satisfaction to remain competitive, and ensure operational excellence.

For example, the digitalization of client account opening, or smart apps where clients can access their portfolios’ composition, movements and live pricing.

The digitalization of investment firms own documents is a key development which is also very linked to digitalization of account opening documents by private banks to facilitate the complete clients’ account opening process and ensure an easier client experience.

Then, new generations of wealthy clients are looking for smart technologies to have a real-time access to information on their portfolio, valuation, performance, pricing. Digitalization remains a significant opportunity for agile players like us. We have the possibility to adapt quicker to this new demand from younger generations, as opposed to larger institutions with heavier processes. We have both room for improvement.”

What are the main challenges that asset managers face today?

“The regulatory requirements applicable to our sector has significantly evolved and increased. This has benefited Luxembourg financial center in terms of image and trustworthiness, but it has also significantly increased the administrative and compliance workload as well as the costs for all financial institutions. Despite a heavily regulated financial center’s attractiveness to institutional clients, the regulatory burden has become somehow disproportionate for investment firms and will for sure weigh on business plans and profitability of all Luxembourg financial institutions. Not only can this be detrimental to business development activities but the attractiveness of Luxembourg as financial center itself is also impacted,

Also, in recent years, the sector has been facing increasing difficulties and delays in opening bank accounts for their clients with local banks, as well as for asset managers themselves. This is a critical problem that we believe should be tackled for the whole industry as there is already an existing risk of business shift to other countries. This is an issue already raised by both ABBL and ALFI.

Then, a key challenge for asset managers and the whole financial industry is attracting talents in Luxembourg. The increase of real estate prices, the inflation as well as the removal of various incentives such as warrants schemes combined with the difficulty to recruit talents for key functions is a matter of concern.”

Why are ultra-wealthy clients turning to Luxembourg for their wealth management? Is Luxembourg still an attractive jurisdiction?

“First of all, Luxembourg has managed to remain a stable and competitive financial center, well recognized for its pool of competencies in Europe, and we expect the country to continue prospering.

The war in Ukraine has created increased demand from customers to transfer their assets to Luxembourg, which is recognized as a stable and trustworthy financial center located in the center of Europe. In addition, Luxembourg remains competitive compared to other EU countries when considering all parameters such as salaries, taxation, social security and the recognized pool of technical expertise available in Luxembourg.

Appropriate regulation, proportionate to the size of entities industry’s development while maintaining the image, reputation and attractiveness of the financial center are key.”