IN the mythology of private banking, Banque Pictet & Cie stands apart. Over the course of more than two centuries, the Swiss institution has discretely tended to the assets of the very rich, led by a small crop of partners. From their Geneva perch, they oversee more than 600 billion francs ($847 billion) in assets under management and a level of profitability far beyond larger, publicly-listed peers, often rewarding each of them with more than 20 million francs a year.

But in recent years, an unsettling new trend crept into Pictet, cracking the faade of corporate cohesion: key employees began leaving. At the heart of the exodus lies a culture clash. Longtime employees were bristling at the brash style of the flood of recent hires brought on to manage the money of the ultra-rich, particularly the explosive growth of new wealth in Asia that has set off an aggressive race for assets and talent with bigger rivals like UBS and HSBC.

Interviews with a dozen people familiar with Pictets private-wealth arm reveal a business at a crossroads, confronted with the reality that, in order to stay ahead, Switzerlands preeminent private bank must adapt. That means embracing more risk and changing the client relationship away from the concierge-like approach that endured for generations toward a more transactional model.

For all its tradition, Pictet has become more attuned to change in recent years. The company transformed its legal status after the end of banking secrecy in 2014. It turned out that the operation required fresh blood. Collardi is everything that the typical Pictet stakeholder is not. More bon vivant than ascetic financier, Collardi stands apart as the first outside partner in decades. His ascent to the Pictet partnership not only made him one of the youngest people in recent history to hold that title, it also tipped the scale for the first time to a majority of members in the group who arent descendants of the founding families.

The challenge facing the partners is that in order to grow, they need to aggressively target Asia, the epicentre of wealth creation. But that requires the embrace of new and potentially riskier investment assets, chief among them structured products. Collardi spent more than a year trying to win backing from the other partners to push Pictet to sell its own products in that asset class. The others werent convinced, priding themselves in their track record of never having endured a defaulted loan. The project was watered down in early 2020 and Pictet settled for the less-risky option of being a broker selling other banks structured products.

While Pictet has steadily grown over the years, it has so far avoided the tense transitions to a modernised corporate structure embraced by other well-known former partnerships, notably Goldman Sachs and Lazard. The transformation in 2014 into a limited partnership removed the risk of the partners bearing the full brunt of losses. Suddenly, Pictet was forced to reckon with its haphazard organisation that often put personal relationships before a systematic structure. Until then, it wasnt unusual for bankers to act independently with no uniform approach to clients, for example sending out correspondence using their own fonts and letterheads. Among historic quirks, some employees didnt have a formal work contract joining the bank was a social compact with a benevolent patriarchy holding a protective hand over its flock.

The bank took a hard look at which private wealth customers were bringing in the lions share of revenue, realising that some were costing Pictet too much, while others still should be targeted more aggressively to buy more services. That forensic approach caused a stir among employees. Pictets private bankers hadnt previously been required to disclose their clients, or say how much money they were making for the bank. Personal customer relationships gave way to faceless scorecards measuring net new money, return on assets, and whether bankers met growth targets

Discuss the ethical transition for Pictet.