As the ‘B’ in BRICS – the grouping of Brazil, Russia, India, China and South Africa – Brazil is one of several economic heavy-hitters predicted to become increasingly important to world GDP in the coming years. A manufacturing and agricultural giant, Brazil is also rich in oil and precious minerals; it is the world’s main producer of coffee, and a cultural powerhouse besides. It’s no surprise, then, that the country is home to some exceptionally wealthy people.

In Brazil, Julius Baer serves clients through its family office. “We take care of investments as if they were made with our own money,” says Fernando Vallada, managing director and CEO of Julius Baer Brazil in São Paulo. A family office provides a full spectrum of wealth management services to high-net-worth individuals and their relatives, taking care of succession planning, philanthropic giving and tax affairs as well as traditional investment activity.

Vallada and his team face stiff competition. There are numerous family offices currently operating in Brazil; indeed, they have become so popular that a major proportion of private equity and venture capital fund investment in the country is conducted by firms in the subsector. 

“We have the challenge of showing clients how we compete with the giants that are here in Brazil,” Vallada says. He adds that managing family money requires thinking like a family.

“We are very close to our clients – the personal relationship is the key element, and the key difference between the traditional private banking business and what a family office does,” Vallada explains. We have families with huge volumes of investments, and it’s hard to say where we start and where the family ends, because everything is so interrelated.”

Another advantage enjoyed by his office is what Vallada describes as the “bank-agnostic” approach the firm takes to wealth management. The office can provide advisory and investment services to families regardless of where their money is held, helping to save time and avoid logistical headaches.

“The bank-agnostic approach means we can help our clients find the best solutions in the market, which is transformational compared to what the local players in Brazil can do,” he says.

The unit Vallada runs – based in São Paulo – is the result of the merger of two of Brazil’s largest independent wealth management firms: Global Portfolio Strategists, acquired by Julius Baer in 2016, and Reliance, acquired in 2018. Julius Baer maintains two other offices in Brazil, located in Rio de Janeiro and Belo Horizonte.

Though the family office staff provide highly personalised services, a degree of impersonality turns out to be rather important: anonymity and privacy are key concerns for clients, Vallada says – so much so that he and his colleagues don’t use client names at work, opting for nicknames instead. Such measures have become more important with the spread of the internet, he notes.

“One of the impacts of technology is that you can spend five minutes and find someone’s entire profile – everything they have invested in. We have to deal with that to the best extent possible and protect our clients’ information,” Vallada says.

Privacy is especially significant given Brazil’s high levels of wealth concentration – a troubling situation, Vallada says.

“Where you have such concentration, it’s really important to have privacy in terms of information related to wealth – 50% of the financial assets in Brazil are concentrated in a tiny section of the population,” he notes. “We have lots of issues to resolve. As wealth managers, we have a responsibility to raise this with our clients. We can help with investment opportunities, but we can also help with philanthropy.”

According to Oxfam, Brazil’s six richest men combined own the same wealth as the poorest 50% of the population; the country’s wealthiest 5% own the same as the remaining 95%. Vallada hopes that the family office can be a force for change, guiding clients toward the charitable causes that will make the most impact.

Looking to the future of the investing landscape, Vallada says that Brazil’s younger investors are increasingly comfortable with digital tools, and are happy to immerse themselves in the world of trading technology, algorithmic approaches and robo-advisors. But financial success, he argues, can often involve a pivot toward more traditional wealth management strategies.

“When the young generation has 10,000 or 50,000 or 100,000, they use robots and the internet – they do everything digitally. But when they get their first million or 10 million, they come to traditional wealth managers. They want human interaction, and they want to discuss wealth management, succession, donations and so on,” Vallada concludes. “So tech is indeed an important tool, but the combination of human experience and tech’s capacity to deliver information is the right way to go.”