Leadership in the SME market opens doors to UHNWI business

Private Banking Magazine: Last autumn, you bundled the UHNWI business into a new division. Why was that necessary?
Sebastian Ahlhorn: The idea of expanding the UHNWI and Family Office business had been in consideration at Commerzbank for some time and is based on our strong growth in recent years. Starting from October 2024, we consolidated relevant competencies and departments into an independent corporate division. We aggregated and restructured existing departments and established new teams along the value chain - for example, a specialised credit team for private clients and large financing projects. Modular Multi Family Office services within a universal bank with global access: this was and continues to be the fundamental idea.

What has changed specifically for clients?
Ahlhorn: For our clients, the unit provides even more specialised advice within a holistic 360-degree model. We can access Commerzbank’s global service range - such as the “Mittelstandsbank” or the capital markets division - and work with individual client task forces, established through new processes within a day. Our clients want decisions to be made at the consultation, not to receive an offer with a delay. Therefore, we bring together our experts and specialists beforehand to provide immediate and comprehensive guidance.

Were clients reassigned to new advisors under the strategy? After all, new UHNWI locations were opened in Hamburg and Stuttgart.
Ersin Soykandar: We operate at six UHNWI locations - including Berlin, Dusseldorf, Frankfurt and Munich. We network with the respective advisors from the Wealth Management or Corporate Clients segments on-site and meet clients together. This means: existing client relationships were retained. However, where it made sense, we brought in experts with specific experience and long-standing expertise to better meet the evolving requirements.

Ahlhorn: Many entrepreneurs and entrepreneurial families seek for a regional contact person. For complex, cross-divisional investment topics and Family Office services, we are brought in. Ultimately, the client always decides. For example, in the South of Germany, we had a case where a Wealth Management advisor developed into an UHNWI advisor. She continues to advise part of the family networks she previously looked after. There are also cases where we are in the lead, depending on specific needs.

How large is your UHNWI advisor team?
Ahlhorn: We currently have over 50 employees and are planning to grow further. Through a business-focused structure - each colleague in our teams is responsible for specific topics and projects - and our comparatively short decision-making paths within the banking industry, clients receive reliable answers to all their questions in the shortest possible time. The new architecture in Wealth Management, under the leadership of Division Board Member Christian Hassel, further promotes this mindset.

You mentioned the new structure of the retail customer business. The entry thresholds in Private Banking have been raised to 250,000 €and in Wealth Management to 2 million €. When are clients under your care?
Ahlhorn: Essentially, we start with 30 million € of investable assets. A large portion of the investment opportunities we introduce - including direct investments, co-investments as well as services - are tailored to this size cluster. However, our experience has shown that in individual cases, it can also be effective for both the client and the Bank to start below this threshold. For instance: a startup entrepreneur after an exit, where not immediately 100 million € were involved, but 10 or 15 million €. Or for clients who have Commerzbank as one of several asset managers and where we aim to increase the portion of the total assets under our management.

Does the new organisation also mean that certain services are no longer available to Wealth Management clients but are still accessible to your UHNW clients?
Soykandar: Our advisory services are fundamentally open to all clients. We do, however, have products and services - such as private market concepts - that only make sense for larger sums. On a monthly basis, we are currently acquiring new products and services through in-house developments or strategic partnerships. The key point: it must fit into a strategic asset allocation and ultimately align with the goal to grow together with our clients.

In liquid asset management, you have Yellowfin, an asset management subsidiary in-house that explicitly addresses UHNW clients. How does the collaboration work?
Ahlhorn: In Asset and Wealth Management, the Bank relies on its own very successful asset management and a modular multi-boutique model. Whether Yellowfin, Aquila Capital for investments in renewable energy and sustainable infrastructure projects or Commerz Real - we can offer internal corporate and boutique solutions for all relevant asset classes and, if needed, additional solutions through our numerous cooperation partners. We, as UHNWI & FO, act as intermediaries. The client decides which solution is ultimately chosen. One thing is clear: our boutiques must prove themselves in benchmark comparisons.

Last year, alongside your institution, Deutsche Bank, Hypovereinsbank and Merck Finck announced UHNWI strategies. Where does the seemingly great appetite for the UHNWI business come from? Is it the simple equation: high wealth equals high margins?
Soykandar: The demands of clients are becoming increasingly complex, we are currently witnessing many wealth transfers and company sales. The next generation wants to invest sustainably. UHNWIs increasingly have international investments; wealth controlling should no longer encompass only liquid assets but the entire asset allocation. Some banks recognise this and are restructuring to meet the emerging advisory needs.

How can one differentiate in this segment? All providers in the UHNWI business claim to offer the complete package.
Ahlhorn: We have already discussed some points of our offering. The biggest challenge for most of our competitors is to earn and then maintain the trust of clients in the long-term. Commerzbank has been a partner of the German SME sector for several decades. Our market leadership in the SME sector in Germany ideally is also an USP, but at least an entry ticket in the UHNWI business. Furthermore, we are ready to finance large real estate or infrastructure transactions. This additionally makes us attractive to the target group.

Commerzbank’s strategy through 2028 formulated ambitious growth and return goals. How do you intend to contribute?
Ahlhorn: This year, we will expand our holistic advisory model. In addition to expanding our loan book for the target group, specialised products in private market investments are the focus. We have already sat on the other side of the table as investors and know that standards rarely lead to success - focusing on the small and mid-cap sector or specialised niche providers is not something everyone offers. On the service side, we focus on generational transitions and security. How do I protect my family and assets? How can I introduce the next generation to the wealth? A keyword is family governance. For us, it is both a commitment and passion to connect our clients with each other through joint events and masterclasses. This also applies to access to an exclusive network of service providers such as notaries, lawyers, and experts in the field of health care.

All in all, does it mean advisors in the UHNWI segment need much broader competencies?
Soykandar: That is correct. We must think beyond financial assets. I recently had a conversation with an entrepreneur after a company sale. He said: "I am afraid. Everywhere in the press, it says how much money I received." In this case, the issue of family and privacy protection was much more important to the client than the question of how to invest the money. Here, too, we must consider the individuals holistically.

Wealth transfers or generational changes are commonplace in the SME sector. What does that mean for your unit?
Ahlhorn: We position ourselves as the Family Office for entrepreneurial families, and our clients expect us to understand both the entrepreneurial and private spheres. We address the topic of succession through the specialised department "Multi Family Office." This includes foundation managers, executors, wealth planners, and succession experts. Many banks, for example, have outsourced the establishment of foundations to law firms. We have in-house lawyers who have been accompanying these families for many years. We can extend the advisory services to topics such as family governance, controlling & reporting, impact investing, or philanthropic consulting.

Consulting topics that are also covered by multi-family offices. Both of you were most recently at Finvia. What do you, as a large bank, have over family offices and independent asset managers?
Soykandar: During our former roles at Family Offices, we could provide only a 180-degree consultation. The other 180 degrees - the traditional banking business from account opening to payment transactions to the important topic of financing - were missing. For complete support, banks are always needed. The fact that we can seamlessly support clients on both the active and passive sides is the essential advantage.

Ahlhorn: Another point is access to restricted private market investments. When weknock on the doors of large private equity and venture capital funds, it usually leads to a strategic cooperation, including preferential conditions for our clients. Also, at addresses where smaller Multi or Single Family Offices could never invest.

On the flip side, enlightened wealthy individuals or Single Family Offices probably don’t expect independence from you, do they?
Ahlhorn: Independent advice is always in tension with the margin pressure that many Multi Family Offices face. Smaller providers, in particular, are often not able to launch sufficient in-house concepts for a reasonable diversification. Meaning that they must - even if they are white-label products - collaborate with selected banks and fund initiators. This can create a certain bias that cannot be argued away. There are many family offices that transparently communicate this to their clients - but there are also those that do not or only insufficiently.

Soykandar: We work with selected Multi Family Offices, and there are other banks beside us that have interesting concepts. For example, we have an investment for a major infrastructure project in the field of AI and present it to a Multi Family Office, which in turn has a demand from its clients precisely for this investment theme. If the Family Office conveys our concept or that of another bank to its clients in such a case, it does not question its independence. It is all a matter of structure and unrestricted transparency.

In the past, Commerzbank strengthened Private Banking, then raised entry thresholds again, closed locations and has now reopened them. How sustainable is the setup you have now?
Ahlhorn: The current adjustment is simply the result of the Bank’s strong growth in the premium segment in recent years, and if the consequence is the opening of new locations, then we are very pleased and it is, in a way, a reward for our work. Additionally, it is only logical for us to continuously tailor our offerings to the needs of our clients in a time of increasing individualism.

Soykandar: This also applies to our Private Banking. Our institution is equally investing in a better advisory experience, continuous individual care, and expanding our business. Our goal is to grow our clients' assets optimally and responsibly. When Private Banking clients grow with us, Wealth Management takes over, and perhaps eventually, our UHNWI team does. These are always personal success stories that drive us.

This article was first published on March 28, 2025 in Private Banking Magazine.