Good afternoon. A very warm welcome from our side to Vontobel's Investor Day 2020. I'm Zeno Staub, the CEO of Vontobel, and I'm happy that you all join us for this live stream on our Investor Day. Let me quickly guide you through the program of this afternoon. I will kick off with an update on strategy and the priorities into 2020. I will be followed by Elodie Duvaldestin, our head of marketing, for an update on how we deliver the Vontobel Experience to our clients. François Rüf will be with us on becoming a data-driven company and an update on our fascinating journey on this path. Caroline Knöri, our Head of HR, will give you an update on how we create a great workplace for some of the best talents in the industry.
After that, it's Q&A with all of us, and then we will try to fit in a small break that we can all recover from those live streams we're all pretty used to right now. Part two, it's Asset Management with Axel Schwarzer, our Head of Asset Management and Head of Investments, and with Marko Röder, our Global Head of Sales within Asset Management, with another dedicated Q&A session. Another quick break, and then we will be back with part three with Georg Schubiger, our Head of Wealth Management, Markus Pfister with an update on our capital market activities within Structured Solutions & Treasury. Thomas Heinzl, our Chief Financial Officer, will do the financials and the roundup, and we will all be back for a third Q&A session. That's the overview. Let's kick off.
Whenever we want to move ahead into the future and shape and conquer the future, it is helpful to quickly look back and take stock of where we are, what brought us to the point where we are, and what we can take as learnings from where we are before we move forward. I am happy to report that over the last years, we were able to deliver the growth. We were able to outpace global growth in wealth by a factor of two. It is from this position of strength that we decided to take the next step on our journey to become a pure-play, buy-side only global investment firm. We strongly believe that our journey into the future will be driven by four strategic levers. Client centricity and investment-led at the core.
We see client centricity and being investment-led as two sides of the same coin that drive us in bringing investment solutions that fit the needs of our clients. We are technology-enabled and will strive to become ever more so. We are very aware of the fact that in our industry, ever more so in the future with more technology, people will make the difference, and we strive for the best talents in our industry. Let me quickly report to you how we have done against the business plan and the targets we have announced on our last Investor Day three years ago. Before we then use the time to think ahead and try to explain and onboard you on how we want to move forward and how we want to achieve our targets now in the next phase.
How have we done in the last phase since our last Investor Day? We pretty much delivered on growth. On average, our top line grew by 6.4% on an annualized basis, which is above the target range that we put ourselves up to. We also reached the upper boundary in terms of net new money with 5.9% against a range of 4%-6%. I think that was very important to us, that is very important to us, that will remain very important to us to deliver on organic growth. Also, in terms of profitability, we made progress. We delivered a return on equity of 13.4% in H1 and have been always close to our target of 14%. We missed our target on cost-income ratio that we have actually increased after the acquisition of Notenstein La Roche. We are now at 74.7%.
Our CFO will give you a more detailed update on what the details and what facts are behind the progress we made, but also why we decided to keep investing into future organic growth. In terms of capital, we made the targets. We are now at 20.2. After we completed the last acquisition, we were at 18.9, so we were able to accumulate capital and to build and continue to have a very strong balance sheet, while at the same time being true to our dividend promise and paying over these three years, CHF 6.5 per share out to shareholders. We have also pretty strongly and decisively changed the characteristics of the business and have built a business that is in line with that ambition to become that pure-play buy-side investment firm. We are much more international today than we have been a few years ago.
We are much more diversified by asset class. This was a very important target to us to be strongly diversified and very credible in each of the asset classes, in multi-asset class, in fixed income, in equity. I think a very strong proof point to that was the fact that we were able to deliver net new money growth in all asset classes in H1. We also have a strongly changed pattern on our revenue side now with 60% recurring commission. Within the commission part, we are heavily above 80% of recurring commission. Our net interest contribution is down to 6.4%. We have really transformed ourselves from the revenue pattern into a buy-side investment firm, and we are happy with the progress that we made on this side. How did we do against the more qualitative targets and against the strategic ambitions?
I already commented on growth and market share, where we delivered. We also delivered on our market shares in public distribution. On drive efficiency, I also commented. Our CFO will be back with more details. In terms of brand, three years ago, we launched our One Brand Strategy with the new look and the new brand language that we used. We're happy with the impact that we're getting from that. As one of the proof points, we have risen 11 ranks in the European Fund Brand 50 ranking, where we're now at top 21. The brand starts to show its power in terms of attracting clients to the Vontobel platform. We see also upticks, though not yet to the level where we have the ambition to go into the future on our social media channels.
How have we done in delivering the Vontobel Experience to our clients? I think we have been pretty consistent in rolling out the brand globally across all touch points, and we have made a major step in moving the whole institutional business to one global CRM system. We will be back with an update on that in the next phase. We intend to move our whole book of business to one consistent global CRM system, a clear prerequisite for success in the digital age. In terms of empower people, we are happy that we get strong feedback. We regularly pulse our people. Our people are our most important asset, and Caroline will give you more insights into that. We made progress. We are and will remain an employer of choice in our industry.
Having reached this position and analyzing the environment, we came clearly to the conclusion that we wanted to step up our game one step further and actually look at this environment, which looks full of challenges, and trying to transform this change into opportunity for our clients, for you as shareholders, for us as a firm. When we look into the environment, a few things stick out. Saving is dead. Zero or negative interest rates are here to stay. Investing is the new saving. That creates an environment where the need for advice and professional solutions in terms of managing money has never been as much in demand as it is today and as it will remain in demand for the decade to come. That is testified by the allocations of private people, but it is also testified by where the global pension gap is moving.
At the same time, clients change how they interact with us. They decide on timing, on journey, on touch points. We have adapt to that environment. We took this challenge seriously and said, "This is the time now to even think more long-term than we did so far." We get rid of the three-year planning cycle that we shared with you and that we were used to, and we adopted an even longer-term vision. We have developed what we call internally a lighthouse that describes how do we want to be, how do we want to look like, what do we achieve to become by 2030? That is a very clear goalpost towards which we work in two-year cycles that gives us clear priorities, more agility, and more flexibility on that journey towards our lighthouse.
That lighthouse is condensed in that ambition to become this pure play buy-side investment firm with these four strategic levers. In order to reap the full benefit, the full potential of that vision, we decided to align our setup and the way how we work internally. We have built a collaborative model that brings out the best from an expert-led organization. We commit to very clear performance management, very clear priorities over a two-year cycle, which we will share with you now over the next hours to come. What does that lighthouse thinking bring to the table? First and foremost, it focuses our minds. It tells us also what we don't do. It creates a strong pull towards change, and it gives context and guidance to the whole firm.
The thinking behind that lighthouse, the content is shared across the firm to make sure that everybody joins the vision, and then we can work with a fast-moving, empowered organization in which everybody thinks and acts as an owner of this company and moves a common purpose forward. In more detail, what does that lighthouse spell out? We want to become one of the most respected global investment firm, a completely client-centric organization. We strongly believe that through time, digital data and analytics will have to be seamlessly interwoven with every client experience, with every process, with every touch point that we bring to our clients. We are and will remain investment-led, fully committed to high conviction, active investing, with strong and best-in-class access to alpha, beta, and income sources of return. We think and act in ecosystems, which are the new environment for building solutions for our clients.
We strongly believe that the disintermediation of capital markets will continue, and we want to play a role in that with our platforms and with the way we interact with ecosystem partners. We want to expand strongly the footprint, both in the U.S. and in selected Asian countries, as we are strongly convinced that fast-forwarding 10 years, the U.S. will still remain the largest and most important fee pool in our industry, as at the same time, Asia will outpace everything else in terms of growth. We continue our journey to a capital light business model, and also in 10 years, we will be fiercely independent, family-controlled, and bring that unique combination to you of being listed and therefore accountable to investors like you, but having the stability, the long-term vision of a controlling shareholder, which gives us a very entrepreneurial platform.
In order to reap the benefit of that lighthouse, we decided to adopt the way we work. We built on the one side, client units, which are dedicated areas that have only one thing in mind, how to best serve the client. They are the interface to the client. Client centricity is obviously an end-to-end endeavor across the whole organization. You need an interface, a window, to clients and markets. All of these client units tap into big, attractive, and growing fee pools in the selected markets. We have then grouped our organization in what we call centers of excellence. Why is this important? This is important to attract, retain, nurture, and build the best specialists in each and every capacity and capability that we need. Great investors want to work with great investors.
The same is true for great IT people, great data scientists, great risk managers. These centers of excellence create an environment where we can attract and build the best talent in our industry. Around that, we have built a collaborative model, one firm, one P&L, one Vontobel, to bring the best to each and every client according to her or his needs. At the core of this model is our investment capability. We have now a very diversified and very strong lineup of boutiques. We strongly believe in the multi-boutique setup, and we will remain true to it. I'm also happy to report that over the last three years, we have invested in this core capability. Only companies that invest in their core capabilities will win the future.
As of today, we now have 300 investment professionals out of 2,000 people located in our investment hubs from New York to London to Zurich to selected European cities, and then ever more so to Asia. We are building on a number of very concrete success factors on which you will also get more details and more insights in the asset management and investing part, dedicated to active investing, early mover on ESG, and a very credible supplier of ESG solutions to our clients. We have become an emerging markets leader, and we are privileged to have investors with very long tenures and very long track records with us. Now, I want to illuminate the growth potential of our firm and of our business plans by going along the structure of the four client units.
I will keep shorter on these client units on which you will get a more detailed update and insight this afternoon. Asset management, tremendous growth in H1, very strong growth track record over the last years at a very sensible and very robust margin of 42%. Very distinctive value creation with outstanding products in the multi-boutique environment and very clear and tangible growth opportunities in regions, EMEA, U.S., Asia, and in targeted client segments, especially the global banks, which have become one of the key demand pockets for active investment solutions. Platforms and Services, the area where we serve smaller intermediaries and banks with our structured product offering. We have the privilege to serve globally 490 banks with structured product solutions and 460 independent asset managers or IFAs with our full range of investment offering, starting from funds to structured products to custody and execution services.
We had sensible growth. We are convinced that we can do much more. We are now a top six player in Switzerland. The market for external asset managers in Switzerland is big. We are now a top six player. We have the ambition to become top four. We have decided to set up the business also in Singapore and Hong Kong, which we see as an emerging market for external asset managers. With our structured product platforms, both our own open architecture platform, as well as with our dedicated digital pricing services, we serve banks in Switzerland, in Germany, in Hong Kong, in Singapore, and in selected other markets. We see strong potential to win further market share and to build business with these buy-side partners. Wealth Management. Again, here, you will get more details from Georg. Just a few highlights.
I think the composition and the stability of the margin that we have delivered over the last year clearly shows that our boutique approach, our high-quality approach, and our investment-led offering works. With a recurring commission margin of 47 basis points, we have a very strong industry position. That is driven by three key value creation drivers, a fully client-centric advisory process, a proprietary multi-asset class-inspired investment approach, which we call 3α, and a very transparent and need-based customer-friendly pricing model. We see significant growth potential going forward. We are confident that we will be back to deliver the historic growth levels after having suffered for different reasons for the last 18 months. We have created a fourth client unit last December and announced that where we have bundled everything which is direct to consumer through primarily digital channels.
There we have a strong starting point, which is the business of public distribution, which has done CHF 90 million revenues in H1. We have a strong pan-European offering. We have a strong footprint and a promising footprint in Hong Kong from which we can start. We have a number of well-established platforms that attract significant interest from self-guided investors, the leading one being derinet, that attracts 70,000 users on a monthly basis. We have built and innovated a number of digital assets over the last years, which we now have pooled in this client unit with three main growth ideas and initiatives going forward. First, extend our footprint and our success in public distribution of structured products. Second, scale the existing platforms and solutions for these type of investors to make our platforms the home for the investments of our clients.
Then third, go towards a fully integrated direct-to-consumer digital offering to help the man on the street to invest credibly for his freedom, for his independence, for his future. There are two other key centers of excellence which I would like to highlight. One is Structured Solutions & Treasury, on which you will also get the more detailed brief this afternoon. We have bundled everything that is related to risk management and risk transformation in one center of excellence. We now support our client units and our clients with one center of excellence for everything that is related to leverage, to risk mitigation, to risk transformation, and we bundle the capabilities of our own balance sheet, of the capital markets, and of the risk transformation tools that capital markets offer to us for the benefit of our client.
Today, 70% of this business is done through Digital Investing, 20% is done with the 490 banks and the 460 external asset managers, and 10% is used by our own Wealth Management, for which obviously risk management and risk transformation is an important part of the offering. Technology and services. We are strongly believers that technology is an enabler of a successful future. Therefore, we have taken a number of significant steps or are about to take further steps on that road. One I already quickly touched, one CRM system across the firm. It's the only way to bring a multi-channel client experience across the whole life cycle of a client to the market. It's a must-have for every successful company in the digital age, and we have already moved the institutional business to this infrastructure. We will now move the private client business to this infrastructure.
Behind that is one global platform hosted on our private cloud. Every workstation across the Vontobel firm is hosted from one private cloud, and that has heavily supported us now also during COVID. We have also built, and I will leave the details to François, one big data and analytics platform across the firm. Within technology and services, we deliberately also invest in tech skills, having now more or less 100 full stack developers, data analysts, cloud engineers, so top-notch tech competencies. We think that we can do that journey into the future with recurring investments of around CHF 60 million on a yearly basis, which is more or less the current speed that we have now. Cloud technology and the newest technology tools, they favor not the big ones, they favor the fast movers, and we intend to use that potential.
Let me turn to the fourth element that I cited, which is a very clear set of priorities for 2020 to 2022. Priority one, deliver the Vontobel Experience. It's a commitment to a journey on which we have now been for a number of years. We have now started to build a number of tools and prerequisites in order to deliver that with the utmost impact, and Elodie will give you more insights into how we do that, especially from a marketing perspective. Second, deliver a pure-play investment firm to all clients. We are investment-led and client-centric at the same time, and obviously the quality of our investment offering is a key prerequisite in order to defend and command the margins that we have been able to deliver over the last years and that we intend to continue to deliver going forward. We will look into two examples.
Our two biggest client units, Asset Management and Wealth Management, how we deliver that investment-led approach to these clients. Obviously in our new setup, all our clients will feel and breathe the same commitment to being an investment-led firm. We also deliberately said we don't think now for 10 years in a lighthouse environment and then go back and optimize everything on a short-term two-year basis. In these two years, we have deliberately set us goals that will not all of them fully pay back on the bottom line in these two years, but will give us the right to play in the next two-year phase and in the next two-year phase on that journey towards that lighthouse vision. These tipping points, as we call them, are crack the global bank segments, which is important to build above average global growth.
You will get more insights into that. Build a strong regional anchor in the U.S. and Asia. Harvest Asia, not from a distribution side, but from a key source of alpha, which will impact the way how we prioritize and build investment capabilities. Assemble a convincing and differentiating ultra-high-net-worth offering, then from that idea of having pooled the capabilities of our own balance sheet and the potential of the whole capital market offering to crack the lending-led competition in servicing the most demanding ultra-high-net-worths. Fourth priority, deliver the power of technology data and analytics. Here, François will bring you more insights, and on the talent side, you will be in better hands with Caroline than in my own.
That's it from my side with the overview, how we came to here, where we are, what is our ambition, why did we make the decision for a lighthouse, why did we move to another setup, and what are the key priorities, and where do we see the convincing growth potential across all client units for our firm. I gladly now hand over to Elodie, who joins us to give you more insights into how we deliver the Vontobel Experience. Thank you.
Thank you, Zeno. I'm Elodie Duvaldestin. I'm heading marketing for asset management. I'm happy to be here today to talk to you about Vontobel Experience, how we deliver it to client prospect globally and across all our client units. We deliver the Vontobel Experience in every client journey. As there is not one single touch point that is more important globally for our clients across client unit, our aim is to optimize client experience across every touch point. In order to do that, as mentioned already, we use one global CRM across client units. It's a key element in our setup to ensure we work globally with a global operation. We follow standard and enforce data privacy regulation globally, such as GDPR, as well as follow Swiss banking secrecy. Again, while running global operations. We are using Salesforce as a client data source.
However, much more than that, this is a working tool we use daily to interact on client, on prospect in a 360 ways across the organization. To deliver the Vontobel Experience, we build journeys that match investment demands from our clients with our investment solutions and capabilities. The Vontobel Experience goes way beyond our home market, and we work to increase brand awareness in all our focus markets, in Europe, in the U.S., and in selected Asian countries. What do I mean when I talk about optimizing the client experience across every touch point? Some touch points are physical, some of them are digital. As we've seen with COVID, the digital touch points became really critical in maintaining traditional relationship management activities. We need to work on all of these touch points, from awareness to loyalty with our client. However, a great client experience starts from the client.
While I quite like this visualization, what may be true for a client will be different from another. Looking at a client experience with us, it will probably start at an event, for example, working, coming to a fair, like FINANZ'20 in Switzerland or Salone del Risparmio in Italy, or you may come to one of our digital event like the one we're having today. Can be for our platform and services unit, can be for our asset management clients, could be for wealth management client. Is that their choice? The client decide how they interact with us. We have to be ready to give them the best experience possible across all those touch points. She or he might pick up their favorite Financial Times or another news provider like Reuters.
If she picks up the "Financial Times," they may come across TwentyFour, our U.K.-based fixed income boutique, and they may read about what we think about inflation from this boutique. They may go on Reuters, and on Reuters, come across what our Quality Growth boutique thinks, an equity-based boutique headquartered in New York, about the China versus U.S. war. Again, they are in the driving seat, we are not. However, our work is to be ready to deliver them the best experience however they choose to interact with us. In the end, the real journey is far from the nice, smooth design we had on the previous slide. In order to optimize this journey, we need to go beyond traditional approaches, because it's all about every client wherever they are. We need a data-driven approach to do that, and delivers the edge.
Today, data is really at the heart of the decision we make when we deliver client experience. We use data from our website, data from our emailing, from our social media, from our event, to optimize the content we deliver to our client. We originate it from our investment boutiques and investment centers. However, every time we publish and pushed out a message, we learn from our client, from our prospect, what they like, how they like to hear about us, and what's the best way for us to reach them in various geographies and across different segments. It's really an iterative process here. We also use data to optimize our multichannel campaigns. As mentioned, the client is in the driving seat, and depending on the channel, depending on the culture they're in, they will choose to interact with us differently.
Using data, we can manage the best way to promote our messages so that we make sure to reach our target audience. Finally, we use data to enhance our relationship management. In a world today where clients expect us to know them, they expect us to get it, and at the same time, we see an increasing development of a self-serving pattern. They go online, they compare offerings, they compare ideas, they compare messages. It's only when we can get together the sales pattern message and touch point, which happen on the marketing side through websites, through emails, through social media, with the sales touch point, when a Relationship Manager calls a client, or when they meet them when they can. That's only when we put those two together that we can have a 360 vision of the client interaction and how we interact with Vontobel.
Doing so allow us to have more relevant contact and journeys with each of our clients and prospects. What is it we do better at Vontobel? We have one brand. This One Brand Strategy makes it more efficient and more impactful when we build brand awareness across all core countries. We have strong investment content. This content originate from multiple boutiques and investment centers. This makes us relevant to investor across investment challenges, across asset classes. In addition to that, we are also launching a Vontobel Investment Institute. This think tank will generate impactful content around private and professional investor challenges, and will also help us further support our strong reputation. We run integrated and multichannel campaigns. They are end-to-end from investor challenges to specific client and prospect solutions.
This multichannel approach allows us to bring Vontobel's value and messaging into the client ecosystem, making sure we're client-centric and we interact on their terms, according to their habits and their choices. We are data-driven with one CRM, a 360 tool enabling us to communicate across the organization about client lead and prospect across touch points. We measure journeys, we measure touch point, we measure content, and that enable us client-centric, fact-driven enhancement of the Vontobel journey. Thank you so much. Now I would like to hand over to François Rüf to talk further about data and how that helps us being a data-driven company.
Thank you very much, Elodie. I'm going to talk about tech, data, AI, analytics, and how this is going to help our business to do better and to do more. As Zeno also already outlined, Vontobel has a very strong IT backbone. We talked about the One CRM Strategy . We have top-notch execution and trading platforms, and we have made smart investment into digital offerings like our digital wealth offering, Vault, or our new baby, Volt 3a, a digital pension solution. What we have also learned from the big tech companies out there, that this is not enough anymore. The best companies out there, they can leverage the data to deliver better products, to deliver better services, better user experiences, and to automate processes that have not been able before to automate. You can also ask yourself, why is this so important?
In a digital age, the data is the only context that you have about your customers. If you want to have a meaningful discussion with your customers, you need to be able to do this advanced analytics based on this data. This is what we call a data-driven company, and this is the path we have followed now for 2.5 years. We're super proud of our data science and data engineering team that we have built up. These are more than 20 specialists now in this field. It's a very young team. It's a very diverse team. We have over nine nationalities, this is from all over Europe that we acquired the best talents out there. Mainly, they're coming from math or computer science, or are physics people. Skill and talent alone is not enough.
Secondly, we have also mastered to a very high degree to fully leverage the cloud. Our One analytics platform is fully based on the cloud with the latest technologies available, like real-time streaming, data lakes, machine learning. This is also what Zeno has outlined, that nowadays, even a mid-size company, the technology is not the blocker anymore. Thirdly, and this is also, I think, really important because many companies, I think, have done a mistake here. If they build this advanced analytics AI solutions, they do a lot of POCs, they do small labs, where they are experimenting. From the get-go, we focused on the biggest problems that we have solved to make a real business impact. We are also proud that we have already five real use cases in production. I want to give you one of these cases here.
This is all about structured products and how we do quoting. This is a big data problem because we have a lot of products out there. Firstly, on the tech side, we have shown through pandemic, where you have super high volumes, that actually we're still out there in the market capable of giving quotes. We stayed in there, and this was very much valued by our customers. At the same time, now we're able to use analytics to actually optimize the quoting. This is done on the cloud with the latest machine learning technologies. Remarkably is that the core of this solution, which has, like, 2 billion records that need to be processed per day or up to 40K records a second, was mainly built by one person. Then you can ask yourself, how is this possible?
In the old world, that would be completely different. Right now, with all the cloud technologies, you can actually scale out your solution easily. Finally, our definition of a data-driven company, we really focus on three areas. One is the core investment performance. We help our portfolio managers to make the best decisions out there with the best technology. Secondly, client experience. We heard it from Elodie, data is at the core, so we use the technology to have the data ready to know what our customers want. Thirdly, this is all about efficiency to automate processes. Thank you very much, and I am looking forward for your question. Now I am going to hand over to my colleague, Caroline, who will talk about the great workplace. Thank you.
Thanks, François. Hi, everyone. I'm here today to talk about how we are creating a great workplace. Let me say one sentence first. Great workplace starts with great people. We do believe that if we have inspired employees, talented people, we are going to have great ambassadors for Vontobel, and those great ambassadors are going to attract other people to join. This is the virtual cycle we want to create at Vontobel. How is this great workplace going to look like? Our EVP comes down to three words: engage, excite, exceed. This is about creating a workplace where people make a difference. They act as owners, and they're rewarded for what they do. They drive, and they don't wait to be driven. This is about creating a workplace where people are obsessed with creating the best experience for their clients and delivering the right solutions.
This is a workplace where people are inspired by their leaders, by their colleagues, and they feel they can be self-architects of the workplace. There is a good news with it. Where we engage, where we play, we are coming across as a strong employer. The last 12 months, we've made it to the high-performing norm, and this is, according to Willis Towers Watson, the place where great companies are based on the results of our employee surveys. We also ranked very high as an employer of choice by those professional medias that have been assessing us. How do we build this great place further? At Vontobel, we use a wheel of a great workplace, and this is really, if you want, the frame of reference for us on how we drive work. I'll give you a few examples of what we do in each space.
Let me start with values. Mission and values is what I see to be the absolute must of employees' engagement. At the beginning of this year, we have shared our company goals with all employees. We've asked each employee to define his personal objective based on how they can best contribute to the company goal. We also have global virtual town halls on a quarterly basis and regular lunches with leaders. Those are cross-functional and are here to foster not only common vision, common mission, but also common values. Second, great people. As I've said, attracting and hiring great people and talents for Vontobel has been an absolute priority for us. First thing we've done is we've enhanced our sourcing channels in the last years. We've built a team of experts in the recruiting space that know and master each business area.
Our recruiting team is based in Zurich and London, and they represent the diversity we want to create at Vontobel. To attract a broader pool of talent and a more diverse pool of talent, there are a few things we've done. First, we've revamped our candidate journeys. You actually do not engage the same way depending on which profile you want to attract. In the tech space, for example, we have entirely revisited the platforms we're using. We've been participating to HackZurich last year. We're using WomenHack, HackerX to recruit talents. We're also using coding game as a tool to assessing talents in the tech space in the first place. Very different way to interact that you would with a Relationship Manager, for example. We've also rewritten our job specifications and do train interviewers to be more aware of their bias.
Lastly, we've enforced a 50/50 male/female rule when it comes to recruiting for senior role. We want to increase our diversity. Talking now about young talent, we do have an existing successful Graduate Talent Program. Our goal for the coming years is to make it a more international, diverse, and tech-focused experience. Third, trust. Trust comes with communication, open communication, and a feedback culture. As an example, for the second year in the role, we have run a manager survey. This is employees giving feedback to their managers, results being shared transparently with teams, and then openly discussed among teams. Fourth, growth, what I call the make or the break of a great culture. If you want, there are just two good reasons why you should invest in growth and creating growth opportunities.
On one side, it massively enhance retention, it just also results in making the workplace better skilled. This year, what we've done, we've decided we wanted better leaders, and we've entered in a partnership with IMD and sent 130 leaders to join a leadership program with IMD. We have realized that people learned other ways right now. We've added to our learning offer, the platform Degreed. This is an online learning platform that people can access and self-develop and learn. As best learning happens on the job, we have also been promoting internal mobility and launched a new internal job portal this year. Last but not least, recognition. Recognition is a nice thing for the people being recognized, obviously, but what it tells is what success looks like in a company.
We do firmly believe that through our promotions, through our performance processes, we equally want to reward the what and the how, and we do look at Vontobel values as a frame for assessment in everything we do in this space. Those are our five must-haves of a great workplace and also our commitment to our workforce. Thank you for your attention, and I'm now handing over to Zeno for Q&As and the summary. Thank you.
Thank you very much. Please join me for the Q&A session. We try to give you an overview in this first half on our lighthouse, how we want to get there, and about the priorities, and also now some deep dives into three out of these five priorities. We are happy to have your questions now. There is a function on your internet device in order to type in the question that should then be forwarded to us so that we can answer to them. I would read the-- I don't know, do people see the questions on the Okay. We start with the first question of Matthew from UBS. Could you clarify how you intend to crack the lending-led competition in wealth management and AM market?
Are you referring to a third-party lending platform that is connecting third-party lenders with your clients in need of a loan? What type of loans? I'm happy to comment on that. First of all, we do not intend to change our risk appetite. We will remain within the risk appetite that we have delivered over the last years. We will not join the race of becoming lending-led. We are investor-led, and we will remain so. However, it struck us of being a little bit awkward. In each and everything we do, usually in serving private clients, we have learned as an industry over the last years, and many, many years to come, to be actually open architecture and open platform.
Being it from the investment solutions we offer, being it from best execution, being it, in our case, we opened up our structured product platforms for our own proprietary channels. When it comes to lending, actually every one of us seems to be a proprietary closed shop by leveraging only their own balance sheet. Our balance sheet is a pretty conservatively run lending platform, therefore we decided to work towards an offering where we actually open up. One of the approaches we're running is cosmofunding, where we say, okay, whatever we can, what can be securitized gets a much broader competitive offer and better pricings. What we intend to is that we will bring to our clients best advice then an open, competitive offering, combining different prices, different offers, and the full depth of the capital market. That's where we want to go.
Let's move on to the question of Daniel Regli. Yeah. Okay. We can go to page seven to look into the numbers that Daniel is referring to. The question is, the drop in H1, and perhaps I would ask our CFO to crunch some additional numbers. If it is different to my thoughts, we will give you an update in part three, Daniel. I would say they dropped more because we had this huge drop in assets in H1. We had this seesaw of asset levels, at the end of March, we were much more down than what you would actually think when you look at the end of June numbers.
As most of these fees are accounted on a monthly basis, we obviously suffered from the significant drop that we had, that everybody had in the industry when markets tested the lows in H1. I would say that is the main driver for the stronger drop in absolute numbers, in H1 on the recurring. We look at this as this is a price to be paid for two things. One, that's what you predominantly are interested in, the reliability, the visibility, the recurring aspect of the fees. We also like recurring fees because fees that are in basis points linked to the assets. We think it's the easiest and best way of interest alignment with our clients. What is the optimal degree? We are actually offering to clients both options. Obviously, on the Asset Management institutional side, it's recurring only.
On the private side, we give people a choice. I don't expect that we will ever go to 100% recurring, but I think with the discussions that will continue in the public space and in the industry about interest alignment and about simplicity and transparency, I would expect the share across the industry to further increase. We are now already at 85%, 89% of recurring. It probably also depends a little bit on the revenue mix of the different client units. We have no intention to nudge that in the one or the other direction. We offer the options to clients who want to have a choice, but again, in principle, we like basis point fees in relation to assets, clear and simple interest alignment, and second, recurring, reliable, highly visible fees going forward.
We'll be back with a check on why these fees dropped in H1, but I would suppose it's the drop in assets. Okay. I have some technical problems here to scroll the questions. Okay. Good. No, we do have other questions. The hybrid choreography of our setup is challenging all of us. Most is digital, then a few things are. Okay. Thank you for your answer. Can you elaborate more? How do you intend to play a role in the disintermediation of capital markets? Well, one of the points is actually that lending thing. We just think that markets will continue.
To be a little bit provocative here on a Wednesday afternoon, most of you probably like digital business models and platform business models, and most of us are probably users of Uber, and we all are convinced how comfortable it is that demand and supply matches itself directly on platforms without having an intermediary to be paid. We all admire the valuations these platform business models command, and then we move on. We should sometimes think about our first two lessons in microeconomics that most of us spent some time in life on, and who is the intermediary of the whole capitalist system? It's actually the bank. That's the intermediary. Why should not the intermediary, as such, driven by technology, by ever lower transaction costs, by ever more accessible technology, come under pressure? Where do actually intermediary fees, where will they continue to be paid?
We think that's a very long-term, very reliable trend. Securitization was probably put into question in the global financial crisis in 2009, 2010, but it was not stopped. It will continue. In that disintermediation, we see opportunities. We see opportunities in terms of the platforms we can offer. We see opportunities in terms of being more competitive in servicing clients without being restricted to our own limited risk capacity on the lending side. We see possibilities in this, why we also move direct to consumer with our digital offering because obviously also on the way towards direct to consumer businesses, there is a lot of intermediation still going on. We think we have to be ready and to be prepared for these developments. On the back office side, we would only see ourselves as a user. We would expect there that disintermediation continues too.
Perhaps very long down the road with that innovation of distributed ledger technology. There we would simply see us as an investment firm, as a user of cheaper and more user-friendly technology. We pick and choose the fights on the disintermediation of value chain, where we want to be a user and where we want to be a provider and active player. Yeah. Question on the CHF 60 million. Yeah, that's the budget for project costs, and it covers Run the Bank and Change the Bank. We are able to cover regulatory adjustments and innovations and building the future, but it's not the maintenance and the running of the systems. That's separate. Yeah. That's kind of the investment budget yearly that we need in order to adopt our platforms to the future. Good. We think we covered. There is another question here on mail coming in on diversity.
As you can't read it openly as it was forwarded by mail, I will quickly read it. Vontobel still does not have a woman on the Management Board. What is the reason why there are no women in the Management Board? The new head of Digital Investing is also a man again. How does Vontobel intend to become more diverse? I'm happy to quickly kick off on this, and then I would also hand over to Caroline Knöri with more details on how we try to tackle this first. Perhaps three points from my side. We are not happy with where we are, point one. Second point, we're not optimizing for gender diversity only. We are optimizing for diversity of thoughts. There are different walks of life and different aspects that contribute to diversity of thought.
Obviously, being gender diverse is one of the drivers for diversity of thoughts. Third, we made some progress. We increased, and I will leave the numbers to Caroline. We increased gender diversity in senior roles, we acknowledge that we are on a journey. May I ask you to add your thoughts to this?
Sure. Practically, I am not happy either where we are. I think this is a journey. It takes time. I have mentioned a few initiatives we have been running. One of them is really when we look at senior hires, like have diversity slates of candidates. We apply this rule of 50/50 for senior roles. I also do believe we need to act at various level of the organization as much in pipeline building, GTP programs aim to be 50/50 and international. Same for apprentice program, and then making sure in every single HR processes, performance reviews, hiring, promotion, we do apply a diversity lens, not only about women, but looking at age, internationality and gender.
Thank you. There is another question from Citi. How does the CHF 60 million compare versus the prior strategy? It actually compares almost unchanged to what we've done over the last one to two years, in comparison to the past, it's higher. We clearly had to change our mind here. We had been spending more than this in the early 2000s when we needed to upgrade the back office system. That was also at the time when infrastructure and IT costs were not coming fractionally priced as a service from the cloud, but packed and priced in bulks in our own back offices. We went into a phase where we actually, and now in hindsight, that was not the right thing to do. At that time, that was what we did.
We looked at IT as an efficiency tool, and we limited IT to being an efficiency tool. We brought down investment costs to a certain degree up and out till 2011, 2013. Then we realized that IT becomes ever more, and technology become ever more important on the touch point with clients, on the client experience, on distributing and reaching clients, respectively, as Elodie has pointed out, adopting and reacting to whenever and wherever the client decides to interact with us. Thirdly, technology has moved to a level where we can actually improve our service, such as quoting services that François has pointed out. We therefore decided to upgrade our investment appetite into technology. We think that CHF 60 million on a yearly basis is still a very sensible number for a company in our size.
We think we get a lot of results and impact out of this CHF 60 million, but we see the need to move to that slightly higher cruising level and in order to being able to deliver top-notch infrastructure and solutions. We are convinced that the benefit in terms of client experience, leveraging our experts, and being more relevant to our clients will more than reward us for the investments we do. Okay, now that's a question I have been hoping to get it. Do you think you will be able to compete with your bigger peers with much deeper pockets for IT and technology? Yes, absolutely. I don't know then after François understands more about technology than I do, wants to chime in and add a few thoughts. Let me start. Let's scale back 10 years.
10, 15 years ago, corporates were having the better technology than consumers because only corporates had the money to build server rooms, to run mainframes, to have, what was it called? The AS/400 from IBM somewhere in a freezing room. Today, all of you, me not because I'm not allowed, it would interfere with the digital solution. Most of you probably have your mobile handy. Behind that mobile is probably some of the leading technology stacks available nowadays. Top-notch technology is now available at the fraction of the price and can be sourced as a service from the top five, 10, 15 technology companies in the world. The scarcity is not the money you can spend. The scarcity, in our experience, is the people who are able to unlock the potential of these new platforms.
We see actually leveraging technology limited by talent and by our ability to change and move. We think we're not bad at it, but I think we could get better, and it's not limited by money, actually. We think we can compete very nicely. Perhaps, François, it makes sense if you add a few thoughts about the potential of, for example, cloud technology.
Yes, absolutely. I think you summarized this really well. I don't think this is a limiting factor if you think about WhatsApp was built by a handful of people and how this is possible. It's really if you can fully leverage the cloud, you can scale with the cloud. You don't have these huge investment costs anymore in the beginning of a project because you can grow on demand with your service. Also what I see, if a mid-size company, we can move faster than the big ships. Also this comes with, if you think about all the regulations that you have out there, we're just quicker in moving. That means we can also leverage the speed within the cloud. I really think what you have mentioned, that this is not a limiting factor anymore.
Perhaps to add another thought to this, when we come to investments in digital models, we don't see that the limiting factor is actually building the technology or the solutions. What we cannot do and will not do is because we're not financed by venture capital and driven by exits, but we are financed by shareholders that want to have recurring long-term value creation. We will not be willing or able to burn money on client acquisition costs. There are other advantages of us coming. We have a brand, we have a reputation, we have an existing client base, and that will be then the art to leverage our heritage and our credibility in order to create digital clients without burning money on the way. Good. Thank you very much for staying with us through this socially distanced digital experience. That was part one.
Thank you all for contributing. Thank you for joining in. Thank you for your question. I hope it was helpful to all of you to grasp and judge what we here at Vontobel want to do and intend to do. We will be back at 3:00 P.M. sharp with Asset Management. Thank you.
[Break]
Good morning and good afternoon. I'd like to welcome you to the Asset Management session. This afternoon, I'm here. My name is Axel Schwarzer. I'm the Head of Asset Management, and with me is Marko Röder, our Head of Global Sales for the Asset Management. What I'd like to do, we would like to split a presentation. I want to talk about products, the strategy, and the culture of Asset Management, and where we see the growth drivers there. Then I will hand over to Marko, who will talk about our client approach and where we see the growth driver in the client segments. To start, let me start with our favorite chart, which is what are, from our perspective, the key industry themes for an active manager and where is the growth?
You see on the left side, there is another decade of low interest rates, cash is not an asset class. That's a great opportunity for us as an investment house because investing is the new saving. I think you will not put your money into a saving account and will be happy going forward. This is an opportunity for every active management you're looking for going forward. What we see, which is important for our overall position is, it's an increasingly divide between high conviction asset manager and, if you will, low-cost passive factories. Why that the case? You can ask yourself the question, do you want to put your money on autopilot and then go home and just see what happens? We all have seen, not only due to corona, but in general, that investment needs take care, markets change, situations change, sector change.
That's why we are very convinced that this, if you will, bifurcation in high conviction asset managers and passive factories, I'm not saying that both are not needed, but to achieve the goals, particular on real investing, I think we are well-positioned to leverage this trend and which is always nice, I guess, for all of us to understand that the margins in the business, they lay in active high alpha and specialist asset classes and less so, I will come back to that later, in low-cost areas. What we always say, but I think it's very meaningful if you are an active manager, the talent is a growth driver. The ability to attract top talents is key. You don't go in a restaurant and just for the food, you go into a restaurant as well to get the service, the people, and the people make the difference.
We are not that different to other people. We will not always have top products, that's clear, but we at least thrive to have good products. The other parts which we have seen, digital communication service, the people really, really matter. What we have learned, it's not just about the people, how you assemble people as well, which we see in the second bullet point. We have to be able to put eight teams together for the client. Whatever the client needs. Sometimes it's sales, sometimes it's production, and sometimes it's the service part or the operation part of the business. That together makes, in my opinion, a very successful mix for our business. Of course, we have the client themes. Sure, we are in the institutional business, but that's nothing new. We are talking here about growth drivers.
For us, the global banks, I think we talked about this earlier already, is internationally because they're integrating much more, they're really global, they cover all the continents, is one of the key growth elements and growth driver. They organize themselves much better. They have to. The other one is the intermediaries, and we are talking here on the wholesale channel. Intermediaries becoming much more sophisticated, much more institutional. The quality of the products you have to deliver has to be as good as in the institutional piece. ESG becomes mainstream, that's clear, but it's very important for portfolio construction but not only this. We see in the future that all the flow patterns will change. We have the EU regulations, we have other things.
There's a huge opportunity for asset manager investment houses who do really ESG investing and not just like we all know, greenwashing the products. Why we feel we are perfectly positioned to benefit from these trends. You might have heard that a long time or very often, but the stable ownership structure is the most important thing for an asset manager. We hate change, and we have in and out. We are here for the long run. That's the foundation for active asset management. We don't go in and out, and when you look how many asset managers close funds, change strategies, merge or doing things, that's not what you want. You want to be here for the long-term. As we want the people here for the long-term. Our people have long track records.
They are very long with the firm. This is for us the prerequisite to build the culture of our organization. I think it goes without saying, if you want to be a high-conviction asset manager, you have to be investment-led. That's why we feel that our investment boutiques across almost all asset classes have superior products. We have the opportunity and the capabilities, we will see that going forward when Marko takes over to tap into all asset pools globally out of Switzerland. That's fairly unique. We said we want to break it down for you because we are not one-off charts. Is our business robust? What are our diversification driver, of course? I think that's an important thing, and I will cover the product perspective. What does a client really think?
He thinks from a client experience, what has a leading investment firm to deliver? Alpha, of course, beta, and yield. I will keep re-emphasizing that saving is over, investing is in, and therefore, this is what the clients will expect going forward. Can we deliver? You might think, "Oh God, what a stupid headline." It takes 10 years to build a 10-year track record. It means, at the end of the day, that we are in for the long-term, and it takes time to build. I can say it from my experience here. I'm here now 10 years. It takes time to build a superior asset manager. You can't acquire, you can't just put a product out. It's the culture, it's the people, it's the tenure of the people. It's a lot of things you have to do.
You see here, I don't want to go into the details, how long key people, it's not the only ones we have, of course, but how key people have the tenure with us in Asset Management . This covers, and I like to re-emphasize that, almost all the important asset classes we are working in. We are not a one-trick pony, if you will. We can cover most of the relevant asset classes for the client, which you can see on the next page. The next page shows the total inflows from 2019, which were a little bit about CHF 13 billion. When we look at this, I said, remember alpha, beta, and yield. We have broken the pie a little bit in active beta. You have to be smart when you talk about passive.
I said autopilot for us is not an option and shouldn't be for most of the clients. Active beta can compete with all passive and weak asset managers, which we all know as closet indexers or benchmark trackers. That's infinitely scalable and technology led. With Vescore and the boutique here, we are very well positioned as we see here to capture that kind of trend. Emerging market products, where we are one of the biggest one in active management globally out of Switzerland. We can offer alpha and yield, which means equity and fixed income products. On the flexible side, remember, investing is the new saving, and we are in a low or negative interest rate for 10 years. We have the products who give you yield.
As you can see, it's not what I'm saying or hoping, the client reconfirm that we are here on the right track. This is a chart which might be a little busy, which I like to explain, is can we grow with a profitable margin. What we have done here, it's the U.S. fund industry. It's nothing else, just the U.S. fund industry. What we have seen here, we have the fees, broken down by asset and equally weighted. That's important to understand because, as you know, asset weighted, a big fund can dominate the entire sector and then you don't really get a good insight. Equally weighted means every fund, however the size is, counts the same. We have seen active and passive and all together.
I just want to show you, the active equal, still good margin here, but active, basically asset weighted starts a little lower, which means that the big funds dominate. You could argue that big funds bring the margin down and equally weighted boutique managers, if they're really good and high conviction, can still capture higher margin. That's what I take out of the chart. We are well on the way. If we position ourselves as a high conviction manager, we capture good margin. This is us. Now, it's a disclaimer. Here you can't compare it one to one. We are talking here, when we are talking about our own book, about funds and mandates. That's why, of course, and we are talking here about the ROA, the margin a little higher.
On the equity side, you see, not like the trend in the U.S. fund industry, which goes permanently down. We could basically keep the margin since a couple of years. On the multi-asset class side, where we have active beta products and traditional multi-asset class products, a margin in the area of between 28%-35% is a very good margin. We have on the fixed income side, an average margin of almost 34%, which we feel is fairly high. We have a traditional book of business, of course, with Swiss bonds and global bonds, and the institutional space, which is a little lower. The products what I mentioned, which we are focusing on, the emerging market products, as good as they are, deliver good margins. This will stay, in our opinion, for the next decade.
Is there anything new from the product perspective we have? Of course, we feel product innovation, not every new product, but real product innovation can drive future growth. We have two things. We haven't released them yet. They're still, if you will, in the incubation case to a certain degree, is the artificial intelligence fund, where we try to use big data to find out which patterns, macro patterns, have been in the world before to forecast how an asset allocation look like. We feel, and you see the performance here, that could be a very interesting idea going forward to make product selection, TAA, and SAA better. On the other side, where we are very convinced this will be, from the product perspective, an area of future growth is Megatrends.
The Megatrends, there are so many. We have to say there are competitors which are very good in that. This is an area where people really want to have themes and not only asset classes where they want to invest. That's something we have, which we will open for, if you will, third-party distribution in due course. That's from my side, from the product side and more the strategic side. I'm very happy to hand over to my colleague, Marko Röder, to talk a little bit about under the same headline, robustness and diversification of growth from a regional perspective. Thank you.
Thank you, Axel. Good evening, ladies and gentlemen in Europe. Good morning for those of you in the U.S. My name is Marko Röder, Head of Sales at Asset Management. You've just heard it, right? We looked at growth, its resilience, its diversity from our product side. What we're going to do now, we look from the client perspective, from the regional perspective, right? These are different engines diversifying our growth. First I'm going to show you some numbers, you see how our outcomes have really sort of journeyed over the past years, we really go into the drivers of that growth. We see here, these are data you can all access. These are Broadridge data. These are data we captured end of last year. All of our peers are in there, all the rivals in the fund sales universe, there are 1,482.
You see us finishing last year very strong, right? We're in top three position. That's an amazing result. We called before the storm because we all knew that this year turned out to be quite difficult. What we want to know is, as we went into this year, and we went into the year strongly, how do you go through that? Look, this is the next snapshot. Same data. It's the Broadridge fund universe, so it includes EMEA client flows, also LATAM, also Asia. You see us coming out in the top 10. A very strong result in a totally different market situation. I think that is quite important to see that, right? Very different situations, but we have the product, we have the client reach to perform in both scenarios. Now of course, for you, the question is can we repeat that, right?
How we're going to function in yet another market scenario going forward. To help you a bit with that, we mapped you different markets. In the next slide, we're taking the same database, but we show you really how different years have worked in fund flows. On the left side of the slide, you see 2017, 2018, 2019, the entire industry performing, right? You see the accumulating net flows throughout the calendar year. Then look at that, right? I mean, 2017, an amazing year for the entire industry, right? Accumulating flows throughout the year. You see 2018 starting okay-ish, getting weaker. 2019, starting weakish, getting a bit better, right? Not really a great year. Then you see the drama in 2020, right? This is as different as you can have it in the industry. On the right side, we just extracted the Vontobel numbers, right?
These are Vontobel cumulative flows throughout the calendar year, and I think this is quite powerful really. You see us in these different market scenarios performing in every single year, right? Up there in the top 10, right, with diversified flows. Also in the sub compartments of Broadridge fixed income, equity, multi asset was strong, right? I think this is one of our amazing strengths. We don't bet on one trick ponies. We diversify product, we diversify client reach. It's hard to kill that growth. That's what you saw this year, right? Look at the black line here, right? Of course, that's drama, right? That's painful. We finished February great. You see that here, right, spiking up with the flows. Had a bad March like the whole industry had it, but we protected better. We didn't lose that much really. Look at the rebound.
Very strong rebound. What's carrying us here is that we've worked with clients over a decade if we have to, in having trust, in having our products there, and as we're rebounding, we can rely on them. I think very strong numbers here that show you how we're performing. The core engines behind that is what we call the growth journeys. There's one bedrock of the growth journey, that's our sort of mother region, EMEA, the region that we've performed in as an asset manager for 30 years. You see here a very strong performance. That's our bedrock of a growth journey. These are the assets. They're driven not just by the net flows, they're driven by FX, they're driven by market and product performance. You see them going up nicely, and also in a year like 2020, they look beautiful.
Going a bit now into the themes behind that, right? This is where we want to just make it very transparent what we believe the drivers are to deliver these numbers. These are client themes. They are incubated and built over a long time in EMEA, but of course, we really sort of pollinate them across the globe. Let me start with our perspective on our intermediary clients. We don't sell to them, we listen. We don't listen fast, we listen over a decade. We need to understand their journey, their issues, their engagement with their client. We call it a long-standing relation, and that needs to go beyond the product. The product is the ingredient. Without that, you're not talking to these clients.
As client service demands increase, we've engaged ever deeper with these clients, and we develop what Axel touched on earlier, the A Team. The A Team idea is that you don't just present a portfolio manager, but you try to understand the value chain of the client and present expert across that value chain. I will give you a case study later, but just to leave you with the idea, the intermediary clients and their journey are, for us, a product excellence journey, but also a servicing journey. Also a content journey, also a marketing journey. On the institutional side, you want to think about pension plan, global consultants here. We're starting off with amazing component design. We need to be right for their allocation needs. When they have an issue, we want to be there with the right solution, the right component.
Investing into our talent, as Axel mentioned earlier, and then into very clearly designed investment processes, into very sharply designed alpha, beta, or yield components is our strength. Here, the thorough due diligence of these clients really also helps us making our product ever better and going through the cycle with the clients on that. I want these to focus on the channel perspective here. We also brought that search for income again, right? That's been clear to us over more than a decade, that income will be a sort of independent client benefit. We invested here. There are two ways we bring that to our client. One is take emerging market credit, take emerging market debt. This is very clear component yield. You allocate that in and out.
We also have a product called Strategic Income Fund, which goes to the core of client portfolios. With such products, we help them outsource the yield production of their portfolio to us, and we stay with the client through the cycle. Here are some core themes, how we're working with the client and how we're engaging with them, taking the long-term view, which again, our stable ownership, our clear focus on amazing investment talent is a key ingredient for that. Let's go into the accelerators, right? That was the bedrock of our growth, and I will show you now three more growth journeys that are complementing that growth, and they're all interconnected, as you will see in a minute. What you have here is our growth journey number two. These are the global banks. Imagine the global banks as a global integrated asset owners.
They have their own distribution model, and we are the specialists supplying them with the intel insight. Why is it interesting? Two statistics here. On the left side, you see just the household wealth of higher net worth, right? We're talking about households here of CHF 1 million or more of net worth. Look where the compound annual growth rates are, right? We sorted that by the growth rate. It's intuitive, it's obvious, but here you have it in the numbers, right? Very strong growth in Asia-Pacific, very strong growth in LATAM. Just a good growth in the other regions, right? Of course, with our partnering with the global banks, we also get carried to their growth regions, Asia-Pacific, LATAM. On the right side, you see our view on the U.S., the largest market in the world, both in institution intermediary assets.
You see in a fragmented market, it is fragmented, but you see that just the top four are so large, and they're all global banking partners we work with. They're so large, they're covering 16%, 17% of that market. It is important to partner up with them in the U.S., but also to partner up across their sales regions. How do we do that? That's an anchor slide, really, to show you a bit how we engage with client. It's looking at Vontobel with the client point of view. It's not pushing product, it's not selling, it's listening, it's engaging. The blue bubbles here are the value chain of a global bank, could also be of a large regional bank. There is the fund research, there is the platform work. You have to get that right.
These are the factories where we bring the product and its wrapper enablement, its compliant component, and so forth. As we integrate deeper in support of the client, we work with their distribution, their multi-manager team, their advisory, their discretionary team. This is where the A team comes in. We really have mapped their value chain against our support services. We call that client journey mapping. Imagine each of the blue bubbles here, there can be 10, 20, 30 touch points, and we have to understand these. That's what we do. We've mapped our client engagement process in Salesforce. We've done so for six years. We have a very systematic, near quant-driven sales process, and we measure every step in the client engagement, not to control it, but to keep learning. It's a constant learning process.
What works, what doesn't, you want to improve, and you want to let your client know that you improve. As you go deeper in engaging with a global bank, with a large regional bank, you have to really deliver the services they need in their client journeys. Okay, here is the growth journey number three, the Americas. You see just some brief stats here on the right side. This is the size of the market. You all know that. It's large. It's huge. We want to be present there. We have been present in America for more than 30 years. We actually have a founding team there that started asset management for Vontobel in the late 1980s. There are three engines there in our sort of America strategy. One are the North American intermediaries, very clearly linked to the global banks journey.
What we are doing at the moment is we're widening our offering for the global banks in Americas. We have also strong partners. We work with Virtus, we work with American Beacon. These are longstanding partnerships. They are full of trust and also a track record of joint growth. We will supply product for banks who have a U.S. onshore presence on the intermediary side. As we move into U.S. offshore, into LATAM institutional, we're having two very different client engagements here. U.S. offshore is a distribution region of many of our global banking clients who are present there in Miami. LATAM is an institutional, a pension plan engagement journey. We've been present in LATAM for more than 10 years. We're a specialist in emerging market fixed income, emerging market equities there. That is a long journey of growth, which we continue.
We love that region. We're going to continue to be there. Finally, our founding channel there in the Americas, North American institutional, it's an equities business. It's a strong equity business. Like on the intermediary side, we're adding more of our competencies to the U.S. We're expanding the multi-boutique presence in the U.S. Here is the growth journey for the largest market in the world. Now let's look at the fastest growing market in the world. It's our Asia Pacific growth journey, and again, some regional initiatives. The number one investment area we're going through that this year, it's very exciting, is us building out the A team I mentioned earlier, the engagement onshore with our global banking partners, with the regional banks.
A team means not just a portfolio manager or a salesperson, it's a compliance person, it's a marketing person, it's a platform person. We're investing into teams in Singapore, Hong Kong to bring product, but also to bring content and bring service. Very connected to the global banks journey I mentioned earlier. We have been present for more than 10 years in Australia. This is an institutional engagement journey. We're working with the superannuation funds there. We're also onshore with commingled funds to allow smaller flows into our strategies. We offer equities, fixed income, sustainable equities. We have a good presence also with the regional consultants. Finally, Japan, a market that is large, it's very professional. We've been there for 10 years, but we also want to go deeper into the market.
This year we opened an office, we got the license right, we onboarded a new team there. Also in Japan, we want to expand our growth and bring the journey of growth you saw earlier, the diversified growth to the market onshore. That brings me to the end of the growth journeys. I have a bit of sort of anecdotal input here to finish off the presentation, and then I will hand over to Axel for the summary. I thought it's nice to show you a bit how we work in our client engagement culture. Look, I mean, that's ketchup. We're talking about investing here. There is an analogy. You might have the best ketchup in the world. If you don't get it out of the glass bottle, you have a problem. You might not enjoy it, you might not even buy it.
If you turned around and you make the bottle a bit more friendly to get the ketchup out, you have a good product. It's ketchup and something else. Think about that as an analogy, how you bring investment products to clients. Without the product, you're not in the game. With the product, you're only in the game if you understand their value chain and how to engage with it. Now, what's interesting is that we had the aspiration to be best in class when it comes to the entire client service. The inspiration we actually didn't find in the financial industry or asset management. We really looked outside. One of the great inspirations for us has been Salesforce. We think it's an amazing firm. They're one of the world leaders in client experience.
Really bring our client engagement process into an app, into a process, being systematic, doing client journey mapping, going after single touch points with the clients to improve. They inspired us, we learn from them, and now we take it on as our journey in Asset Management. Here's the final slide, just a case study, how that works. The client engages with us. Our silos, our organization isn't an immediate benefit to them. They access our experts. What we've worked on is that you see the green, I can see it. This is in the end, what the client experiences. Specialists they're engaging with, they need connectivity, they need agility. This is a decade of learning, of getting these experts right. We even designed some of these teams with the client in the room.
It's essential to have the client voice there as you design how you're reaching out to them. I think one of our strengths is that next to the amazing product journey that Axel showed you earlier, we found ways of engaging with the clients that build sustainable trust and then allow us to diversify our client and regional book. With that, I want to leave you here and hand over to Axel for the summary.
Thank you, Marko, very much for the insight how we serve clients. Let me just summarize where we are then we are ready for question. Already a couple of questions are coming up. Stable ownership our high-quality product, where we focus on, we are not a broad shop, which is important, will position us very well for what in the industry could be secular in terms of investing and saving, people really need advice for asset management. Either they go autopilot or they want to have the entertainment with a high-conviction asset manager. We think this is where we want to be and where we can grow. We marry product excellence and client-centric servicing. You heard that just right now, how we're doing this to create a superior client performance.
We think products, to a certain degree, are commodity, but client service, as I said from the restaurant, makes the big difference going forward, even in a digital world. Last but not least, we will continue our journey of sustained, that's very important to us. We are not a hotshot and have one modern hot product, and diversified growth. Remember the picture I showed you. We are very happy and pleased with the situation that we have multi-asset class, fixed income, and equity products basically balancing themselves out. Through the cycle, and we have seen that even in bad times, we can deliver what the clients like. That may be from the summary, and if I may, we would go for questions. I would take the first one, Marko, because that's fairer, because you have to get through the list.
I'm very happy to give you some of the most difficult ones. I take the easy ones again. Should I read the questions or can I read the questions. Daniel Regli from Octavian asked me on page 48 about the margins. No surprise. Fee margins and equities and multi-assets seem to have been more under pressure than fixed income. What were the key drivers for this? Product mix within the asset classes. For example, he suggests, what are your expectation regarding fees margin going forward? That's a good question, I have to say. Let me go through the three different asset classes. I wouldn't say that when you look at the average 60.5% that our equity margins are under pressure.
What we have done deliberately, we have a very small portion of performance fees, particularly in multi-asset class and in equity to a certain degree. This is a little bit the performance fee effect. That's a little technical answer, but I think it's fair to say that transparently. Funds are measured by TER, the total expense ratio, and usually, you have a service fee. What we have turned to be more competitive with the market, we have reduced the service fee internally, not pressure from the market, to give more of our products to the market. That's the effect on the equity side. Multi-asset is very clearly the performance fee effect on one hand, which we haven't really collected in 2020. No surprise here.
Of course, that we focus rather more what we said on the previous page on active beta. active beta is our replacement game for the passive business. For sure, those are areas where the margins are not that high. In general, I would say yes, we have here, because of the performance fee, a little more volatility, but in general, we still can collect in the multi-asset class institutional business, which that is the majority of our book of business, a fairly high margin. I think you didn't answer about fixed income because here the margins are very decent. How do I see the margin going forward? I think they will stay and should stay definitely over 40%. That's our minimum ambition.
Depending on the market's go, we'll definitely not decrease how we see that because there is still, as we try to allude to, there is an appetite and there is a willing to pay a quality price for high-quality products. I'm rather worried about the quality of the products which we have to deliver every time 24/7, rather than in our area where we play a huge portion of fee margin, which you can see, for example, from the fixed income piece. With that, I would love to hand over to Marko to questions from Nicholas Herman, who is very busy with a lot of questions here. Marko, you want to take the next one, please?
Yeah, sure. Thanks, Nicholas, for question on ESG. Look, our ESG journey is 26 years old. This is partially a route in corporations we had already in the 1990s, building out ESG competence. It's also very consistent with the values of our main owner. We have different ways of expressing ESG. One is our values, our adherence to UNPRI principles. I think the most important direct impact in portfolios is construction of ESG into our portfolios. We offer solutions that I think are unique. You look at our mtx sustainable equity offering, it's a deep integration, so the ESG is part of constructing the portfolio. It's also one of our most growing areas, sustainable emerging market equity. We're innovating here, right? We're adhering to culture, values, and principles, but you have to innovate in how you bring it into the portfolio.
That's one leg of answering your question here. You named the best ESG manager. What's the competitive advantage? It's more than two decades of experience. It's a very strong culture supporting us, but in particular scale in constructing ESG into portfolios, in multi-asset, in fixed income and in equities. The next question relating to ESG is you ask about the green classification system and the EU-triggered reporting. We have a specialist team for that. We make sure that we are always a step ahead of the regulatory requirements. That's something that makes sense to us. What we feel, Axel said it earlier, it will be a standard to portfolio implementation, reporting, communication, like risk management is nowadays, right? You wouldn't run portfolios without professional risk management. You're right here. That is a big trend. It's not a differentiator in our view.
It's something you have to do, and you have to do it right. How do you expect that to affect the industry overall? Does it drive extra cost for you because of differences in your own ESG system? Not really. It's not like we're discovering ESG investing. We have long track records there. We really think about improving our reporting, and we're working a lot with our portfolio managers to really make it a standard part of every client communication. It's not like we have to build extra capability. We just apply them more consistently. Your final question on ESG, what is the asset mix here? Really, think about the ESG inclusion to cover at some stage all assets and so at the moment, I'd say 50% of the assets are already fully involved in ESG portfolio construction.
It goes across literally most of our high-growth products. We have specifically sustainable products, but we're also improving our overall ESG awareness in all products.
That's excellent. All right then. Thank you, Marko, for the ESG insights. I will take the next one. Daniel, it is you again, page 50. I do not love that question, I have to say, because I worked in the U.S. Isn't North America also the most advanced and most competitive market? There is a question mark. That is a good thing. Do you think you can succeed in this market as a relatively small player? What is your USP? We can question whether this is the biggest market, but what is the most competitive market if you have very good products? You can be in that market.
Honestly, we are already very successful in the U.S. market, one of the few foreign asset managers, because we have one of our boutiques, Quality Growth, based in New York and in Fort Lauderdale, which since years, as Marko alluded to, is over CHF 30 billion of assets, is already very successful in the U.S. We know how that works. We know how the market works. We know how distribution works. We have partners. We have the products, and we thought if we can do it with one product, we should be able to do it with more products. What we're going to do is on the base, together with our partners and our own distribution, we will introduce, which we already have, products from TwentyFour into the U.S. market and then products from Zurich into the U.S. market, for example, emerging market bond.
Believe it or not, the quality of emerging market bond products in the U.S. is or let's say the number is high, the quality is definitely an area where we can attack. We feel if we do things right, and we have a lot of expertise, great talents in the U.S., that we can enter this very big market and make this market even more so to one of our growth journeys, which we really enjoy doing. Our USP is, and you know we like in Swiss, and you know I'm part of the Asset Management Association Switzerland, as we like Anglo-Saxon managers in Switzerland, American clients like to have a different view about the world than just from a U.S. manager, and they're very open to have an international successful manager as part of their portfolio as well.
I think we are equipped fairly well to enter this market. It will be hopefully a great journey we can share and discuss going forward. The next question is from Nicholas again. Marko, you want to take that?
Yeah, sure. Thank you, Nicholas. A good question there. I assume you think about the management fee, right? That's if you were collecting on separate accounts or commingled funds or any advisory situations we have with the client. Look, we don't sell cheap. We really design our products to deliver the alpha, the yield, the beta we mentioned earlier. Our desire is to ask for price. We have investment capacity that is not unlimited. We have enough, right? We will ask for the price that brings us to a fair compensation. If you want to compare it, of course, you have to bring in a bit the volume of the business. For a larger client, say, a large separate account, you will have a lower management fee. There I'd refer to the slide Axel showed earlier. You will see us pretty stable there.
What we would reject is low-fee business, right? High-quality alpha, yield, beta. You don't throw it away for a low price. We have time. We have no rush here to grow. We want to grow at a good price and for good guidelines. That, I guess, Nicholas, that plays into your second question on active beta and the margin. Look, you see the average margin in multi-asset, that is largely driven by active beta. Now, active beta, we have different ways of playing that. We have an active beta fund, and you can look it up. It has a very good price, a typically commingled fund price in the multi-asset space. This is a highly active, high active risks fund, so it is not an index something. We ask for a fair price and we've had beautiful growth in that fund.
We're also offering institutions separate accounts with the active beta strategy, and there it really depends on the size of the engagement. We've had this year two very large engagements, so that will bring the price per unit down somewhat, but still be a very attractive outcome for both the client and us. In that sense, if you see any fluctuation in the active beta pricing, it's a function of the size of the client funding we have received.
Thank you, Marko. Let me take the next one. You get the other one which you'd like to enjoy. The next one is from Mate Nemes from UBS. I know it's your turf. I love to answer that one. Growth strategy in the U.S. and the APAC seems to a large extent depend on the success of your global bank initiatives. How do you make sure your products get the necessary bandwidth from these highly sought after intermediaries? As you are one of our global bank targets as well, I really love that question. You're absolutely right. What the consultants are for the institutional business are, at the end of the day, going forward, the global banks for the fund business. It's, of course, the product quality. A lot of people have product quality, that's the thing.
What Marko showed you, this one slide, how we engage with global banks, changes not our thinking about the client, changes the entire thinking about how we want to act as an investment firm going forward. As we said before, and I'm sure Zeno alluded to, if you don't want to be a bank, you need much more investment expertise across all the value chains you have, from compliance, onboarding, legal, operation. Not every firm, even bigger ones, are organized, as Marko says, with A teams so that we can deliver across the value chain, from fund selection, operation, share classes, support on the ground, the entire value chain. When you would see, we call it our heat map, when we started this journey with the global banks, it was almost red because we came from Switzerland and we didn't work with global banks.
In the meantime, not everything is green, but most of it is green. I think the global banks appreciate very much that we cover the entire, if you will, touch point and change of these bank. This gives us, if we understand how global banks work, not every global bank is the same, so Citibank might be different than UBS or others, or J.P. Morgan or Morgan Stanley or whoever you go, they're different in their way. You have, like a detective, you have to see where their hotspots and points are, what they need, and if you can deliver, and we have our own unit to covering those global banks. If you are diligent in delivering what they need, I would define this as the bandwidth we need to play. Of course, performance and product quality matters, but it's more than that.
If you have that, you have the attention of a global bank, because not every, even much bigger organization, are not that organized outside in and can deliver high quality service or operation across the value chains the individual banks want. I hope that answers your question. The next one, I give it to Marko because it starts with a nicer question.
A nicer question. Thank you, Nicholas. It's a good question, too, by the way. Let me just read it out. From a distribution perspective and client dialogue, flows have been pretty stellar over the past year and a half. You've always had the performance. Is it just demand or has something else changed from a distribution perspective? Look, I'd say, Nicholas, look at the numbers, right? You see them very clearly. The flows have been strong for a bit longer than a year and a half, right? We had some outflows in 2016 from Quality Growth that dragged into the next two years. You look at the inflows, the gross flows, right? We've been strong in fixed income for a bit longer. It's quite important, right?
You want to look at when we incepted products, look at mtx, we have 10-year track record now, building it up. Our credit franchise, TwentyFour AM, right? These are 10, sometimes eight years journey, and then we get them into the money. Of course, you have to perform, right? You don't always have to perform. It's quite important, right? When the market goes into a junk rally, you don't want to perform, right? Not as a high conviction, bottom-up active manager. We've had performance, but we've also had times without performance. The key thing is we have very long track records, and we take time to show them to the client. The flows have been pretty stable, but you compare us now to exactly 10 years ago. Exactly 10 years ago, we were a one-trick pony. Amazing flows in equities only. We didn't like that, right?
Over that decade, we diversified the flow. What we're harvesting now doesn't come overnight. It also doesn't come in 1.5 years . It's been built up with long-standing track records, binding these PMs, right? The narrative of the slide deck here is exactly that. You bind these PMs and you take the time to get them to perform. When they underperform, you want to explain it to your clients, right? You want to stand by your clients and explain underperformance and build trust then. To answer your question, of course, you need to perform against your guidelines and against your performance promise. Of course, the good performance and the great product design have helped us to build our distribution. Your question is hinting at the right point, right? It's building out the regions. It's building out the channels.
That's the global banks journey we mentioned earlier, right? We couldn't have the diversity from a client and regional perspective without the amazing product diversity that Axel showed earlier. So I hope that answers your question. Perhaps I take the one from Daniel.
Directly addressed to you.
[crosstalk] Yeah, Daniel, that's for me, so I'm going to take it. Here we go. A bit of similar sort of saying, well, great net new money, but how sustainable do you consider this growth pace to be? How far can you and your sales team influence the net new money, or is it more result of investment performance and market sentiment? Look, I think I answered quite a bit of that. Perhaps Nicholas and you sit in the same room, perhaps not, but I think it's kind of the same story, right? You need both. You need amazing product, but you also need the reach to the client. The one very simple rule I can give you here is to make the amount of flows we have with that diversity, you need two things in place, appetite for the asset class and appetite for our product.
If one is missing, you don't make billions. We have the time to wait for these magic moments. When they're there, we engage with our clients, and we have joint success with them. It is repeatable. Can we imagine a scenario where we could struggle with the flow? That could always happen. You look at the last years, we've designed products such that in different market environments, we could always engage with the clients. I also hope that answered your question there, Daniel. Thank you.
Thank you very much. It looks like it's the last one from Kennel. Not want to be impolite, it's just Kennel from zCapital, who asked the question, how has the new One Vontobel strategy changed the ways you manage the division, manage products, distribute products, or approach clients? Let me say, in the first place, I think the One Vontobel journey to become investment house is great. It's a wonderful opportunity for me as an asset manager, and I have two hats and the investment hat. From the asset management perspective, nothing really has changed because the client unit is still the same, and we're doing the same thing. However, where I see the beauty going forward for us to grow is on the investment side.
Because what we have combined is, and there, of course, we manage products and what we call internally the client meet the product marketplace in a little different way. I'm talking about the relationship between Asset Management, , the Wealth Management unit, and the investment hub, which is, if you will, the center of excellence for all the investment products. What we have seen here is that we can find a lot of synergies and great products in other parts of the organization where earlier we haven't looked at. I give you the example. Of course, when you have Asset Management and Wealth Management , you are silos. It's supposed to be like that. I don't mind having silos. If that's the business model, why not? People focus. On the other hand, if you break the silos, you have to have a different management style.
What we have seen, it's a give and take when you bring those people together. What we found is in the area of Wealth Management, a really great product. I think I mentioned that already in one of the pages, the so-called Megatrend Fund, which was only for Wealth Management so far. What Marko then has discovered, and we say, "Well, this is a great fund for all of us." We tore the walls down. We will make that fund available for other fund distributors. I think we're working much more together. The collaboration on the investment team side is better.
The injection we can give to the Wealth Management people is, because I personally have very high standards on product quality, we can upgrade, and that's unique for a house which combines Wealth Management and Asset Management, our investment processes in the Wealth Management to a margin of the institutional standards to the benefit of the Wealth Management client. Be it affluent or be it ultra-high-net-worth, it doesn't really matter because the product comes in different shapes and forms. Marko alluded to, we can learn on how do we serve the client by using Salesforce. Are there common clients we can basically penetrate together? Yes, we can. Some not. I think there is a lot of potential, that's what I want to say, and opportunities, vice versa, to bring it together.
Another example, the borders are open, if you will. We have a little trend team in Asset Management, and we thought, why? The investment guys from Wealth Management are better in that. We moved the portfolio manager who run those products under Asset Management hat in the old days over and are much more powerful and ready to attack on the very interesting theme and trend-based product side and asset classes, which we feel is one of the future trends going forward, and bring them to the market. I am big supporter of the way going forward, and it could make a lot of sense here, but we're just beginning. Yeah, we're just beginning, but if you ask my management style, does it change? Not really. That's not the case. Let me see whether we have another question.
One more from Nicholas. Should I take that?
Yeah, please.
Yeah. Nicholas, a good point, actually. I answered your question there on the margin for active beta, but didn't see the second part, which is, what is the edge in the active beta strategy? This is a really good question, because active beta is really us addressing high risk or high sort of active risk beta returns. Look, the way this has been built is had a 20-year journey with us. You really incepted the strategy with German pension plans with great academic background. Very long track record in building the algorithms but also improving the strategy right with very demanding clients. The largest institutional asset base are Germanic clients, but they're some of the best names you can imagine. The strategy is validated by really strong client demand. What clients like about it is a white box. It is very transparent.
You can see the active risk. You can even co-author the risk budget with us. You see exactly the factor biases. You see the contribution. Very transparent, long data track records. We can analyze every market situation, and the strategy's throwing out very consistent outcomes. Very robust, very repeatable, extremely transparent, co-validated by some of the best pension plans in Europe, it makes an amazing story, and it even gives you content. That reaches beyond performance, but we can really build up a great content narrative from a systematic strategy here that's run with algorithms. It's amazing. I recommend you invest in it, the active beta fund. Then you have another totally different question on how we do the billing with our clients, whether we charge it monthly or quarterly.
This is not that easy to answer because it depends a bit on the contractual situation. We have different payment models there. There I'd say you want to separate between institutions and commingled fund clients, but there's not one generic answer, unfortunately for you on your technical question here, Nicholas.
Well, I think we are done. Thank you very much for your questions. We enjoyed to answer them. If there are more, send us an email. We are happy to answer them. I can't see you, that's a little bit unused to us. Thank you for your attention, and interest in Asset Management of Vontobel. Thank you.
Thank you.
[Break]
A very warm welcome from my side. My name is Georg Schubiger. I am heading the Wealth Management business here at Vontobel. Let me start with talking a little bit about the growth of the past year. As you see on this slide, we have the compound annual growth rate of 15% during the last five years, which is very strong, also compared to the industry. As you know, that is a combination between acquisitions. There were five smaller and larger acquisitions that we had during that year, but also strong net new money figures or organic growth. As you can see on the right side, also those growth figures have gone down post the acquisition, which has, of course, to do with the integration efforts that we had.
I guess in the first half of 2022, we were, as all other players, also exposed to the entire COVID restrictions that made traveling difficult and made us focus on the clients that we had. If you look at our revenues, I think we are very proud of being able to increase and defend our return on assets also post-acquisition. We have a very stable business in that sense. If you look at the right side, the earnings composition is very healthy. We have been managing a transition where today we have even more recurring fees, and we have further reduced the transaction-based fees. Also that, of course, with all the targets that we have integrated. How does our book look like? We have over 50% of the assets that are domiciled in Switzerland, and another 42% that are in our focus markets, and 7% are others.
What does that mean? It's a very stable business, very much focused on the areas where we have decided to play and where we have decided to compete. How do we create organic growth? One of the main drivers of organic growth is hiring new Relationship Managers, expanding the business, building the business up. You see here the figures during the last couple of years. With the acquisitions, we acquired 81 new Relationship Managers. Of course, I've already told you we had an integration process. We had also some restructuring built in there. The total figure actually stagnated, but that's a combination of hiring and also letting people go. We are now at roughly 271, and you can expect that we will continue that strategy. We have been very successful in attracting talents. We have also been very successful in managing their business cases.
We have high rates here. One of the main reasons is that people believe we are stable. We're a very much client-focused organization compared to others, and also because we give people a lot of power, we give people a lot of ownership in their engagements with their clients. Clients, another very important factor, another area that we are very proud of. Here you see our client surveys that we conduct very regularly. We actually conducted one in the very heat of the corona crisis this spring, so we were not afraid where the world was in turmoil to ask our clients what they think of Vontobel, and we were very positively surprised and also happy with the result. You see here the Net Promoter Score, which is very high, especially for our industry, with 63% promoters.
You see that we have actually the share of clients that are satisfied with Wealth Management. We even have slightly increased it in the first half of year compared to last year. That is, of course, a very strong basis for a healthy business, is clients that actually promote us and clients that are satisfied with the way we operate. Wealth management, private banking, and especially in Switzerland, is a industry that has gone through many transitions. It's an industry where a lot of disruptive effects happened, and let me spend a few minutes talking about what we have done in some of these areas and how we position us also going forward. When you talk about the value proposition, and that has been mentioned before, we have worked a lot about the brand, the brand Vontobel, and how we position Wealth Management.
What is also at the core of our positioning is actually our investment offering. We have created, and I'll explain that quickly later, a 3α proprietary investment philosophy, which all our solutions are based on. We have introduced, at the same time, a very holistic advisory process, not a process where we advise or suggest a product, but we actually go quite broadly through the client's demands and needs. Based on that and the solutions that come out, we have introduced the value-based pricing, which is quite special for the industry. I'll get to that later. We've worked on the service model. Since one of our growth strategies is higher talents, we have invested a lot into the quality of those talents. That has to do, on the one side, with education, but on the other side, also with technical tools to increase their efficiency.
We believe that we have one of the best Relationship Manager advisory tools that exists in Switzerland. At the same time, we have invested in digital interaction, digital channels. On the growth drivers, as I said, attracting talent is the topic that also goes going forward, but also a lot of investments into digital interaction, into AI, into personalized services, but still digital. I know that my colleague, François Rüf, has already talked about that topic intensely before me. Let's look at the advisory process. I do that very short, but it is, for us, very important that we understand the entire landscape of the client's needs. Starting, obviously, with what most people do, understanding the situation, but also dynamically the goals and the plans. Where do you want to get? What do you want to be able to afford? What's the family situation, et cetera?
From that derive a strategy and a focus where we should deliver. That leads us to a solution, an investment solution. As I said, that is based on the 3α concept. What is it? It's actually a registered trademark, but what is it? We say the first alpha is a broad diversification of assets, a robust diversification. It's the fundamentum of every investment. It's something we believe everybody should have. The second alpha is all around convictions. It's convictions for industry trends. It can be economic changes, macros, it can be megatrends as the blockchain technology. The third alpha is opportunities, market opportunities that we believe exist because we believe a share or a bond or an asset class is underweighted. We have transformed almost the entire customer base into that framework, and it has really helped us to differentiate in the market.
You might know, in most competitors, you go in and they have three different mandate types. They have a balance, a defensive, and a growth. In three currencies means nine offerings. We have a very different setup, and it works when you discuss with the client. It works a little bit like when you buy a car. You buy a car and you're not done there. The car is our first alpha, and everybody likes it. You have the discussion about the second, and you say, "Well, so you're not interested in participating in some of the industry strands, our convictions?" That's like with the car when the question comes about the security system or about some luxurious seats. Most clients say, "Well, yeah.
Well, actually, I would like to be part of that." You go through that discussion, and at the end, partly also to our surprise, a big number of clients actually went for all three alphas, which also from a pricing perspective, then is more attractive for us. As I said, we talk about solutions and not products. You see that here. We have to the left, we have our managed solutions. That are the discretionary mandates. We have advisory services, and then we have digital services, and we have something that's called Vontobel Compose. What does that mean? It's a combination thereof. A client is not just an advisory client or a discretionary client. Clients have different needs in their solutions. They use different products together. We price them differently according to where we believe we create value.
In that sense, we believe that we have created quite a differentiating offering, a value-based priced offering, and something that is very attractive to our clients. That is one of the reasons why we have such a strong ROE development compared to the industry, because that really helped us explain to clients why they should pay for our services. Where does it go from here? You see above, as I said, the advisory process, the 3α philosophy and the modular pricing. We believe we can do much more. We can build on that. We started this two years ago. A lot of thinking at the moment goes around an improved sales engine.
That's the engine that brings the investment contents to our clients, investment contents we have actually a lot, as you have been hearing from our colleagues from Asset Management investments before. That means also replacing an end-of-cycle CRM system into a CRM system that is very well known. I think we will be one of the first, if not the first, to do that in Switzerland. It also means much more digitalized and structured pipeline management, sales management. I think there's a lot we can do in addition than what we do here. On the right side, in my mind, very interesting prospects here is the whole digital lead generation, digital project generation, digital outflow prevention. I think François Rüf has talked a little bit about that. We need to strengthen the Relationship Managers with leads that come from other areas than their natural network.
Only like that we will be able, over time, to increase our growth rate. I think there's a lot of very interesting things that can be done here and a lot of interesting things that haven't been thought in that way over in the financial services industry. Wealth planning, the third one, it's a service that we have bought, a capability that we have bought with Notenstein La Roche, and that we are strengthening and increasing all the time, and it's also a little bit in addition to what Relationship Managers usually produce. The last point, and that's almost a reason for existence, I think we can never rest to work on our client experience, client satisfactions on the journeys.
I think the financial industry in general is not at the forefront of doing this, and in our case, we have quite high ambitions in order to improve that, be it starting from client onboarding, from the entire servicing, but day-to-day managing and reporting. Let me make a few examples to that. Client onboarding, in many cases, I think you all know the stories of clients that try to become client of an institution and then are burdened with paper and paper and paper and paper, almost impossible to understand. We have created a digital application that everybody can download where you become digitally a client. Looks like that. Client onboarding has been very important also during corona time. Obviously, that's for simple cases, for clients that have private assets.
Nevertheless, it was very important for us as an organization to learn how you can do that digitally, to learn how you can do that remotely, and it's something that we will use much more in the future. We have done a combination. We have not just taken a current process and digitalized it. No, we have actually made the onboarding process significantly simpler and then put it on a digital tool. I mentioned before our Relationship Manager tool to do advisory. It's one of our biggest technical investments that we have done in wealth management in the past. What is it, and why have we done it?
With the increasing number of regulations, MiFID is one of them, with the increasing number of restrictions and conditions in order to advise clients, we have basically concluded we need to help the Relationship Manager to do this in a much more automated way. Just let me explain this with guiding you through some slides. Here you see a holistic view of a client's portfolio. Holistic, I mean, all the assets that clients have with us. He might have a discretionary mandate, he might have some cash somewhere, he might have an advisory mandate. It's all together. It's real time. At any second, the advisor sees what's in that portfolio. At any second, it calculates all important parameters. You see here market risk and counterparty risk. With that, the client Relationship Manager, immediately when he gets into contact with the client, has all the relevant information.
Okay, that's nice, there is more to that. You have an advisory discussion, and now you figure out, you enter in a discussion or you suggest, now for the purpose of this example, you suggest, let's see what happens to my portfolio if I buy Intel shares. The client advisor can choose that, and then the machine calculates in milliseconds all relevant parameters that you have to have in advisory. That's portfolio risk. It calculates historic scenarios. How would that portfolio develop in case of another Lehman situation? Counterparty exposure, FINMA, MiFID requirements, regulatory documents. It immediately creates all the documents that has to be sent to the client in order to do that trade. It checks all cross-border rules. Intel now is an easy, but for example, a mutual fund, is it actually registered in that country?
Tax rule, distribution restrictions, and even an ESG rating, I have to say, only as of spring next year. That's also in that machine. In a millisecond, this is calculated for over half a million of securities and financial instruments. That makes work of the Relationship Manager very powerful and very efficient. He can just do that for a number of securities. He can make a whole proposal how to restructure the portfolio. With one click, he will send all the pre-trade information to the client and executes all the trade. It's a way of getting to the point very fast of simplifying the entire process and be fully compliant with all the regulation we are in. Just imagine if the Relationship Manager had to do all that manually.
A trade would take him two to three days, and the possibility that somewhere is a mistake is actually quite high. We believe there is a lot of potential in this going the future, because whatever comes new, we can integrate, and we have a very efficient way to do advisory. Before I conclude, let me talk quickly about one more initiative that we have mentioned at the year-end, where we want to strengthen our efforts, and that is ultra-high-net-worth individual clients. Ultra-high-net-worth individual clients for us is a potential growth area for a number of reasons, but for the most important reason that we believe we have a lot of things to offer. You see that on that one side. Obviously, we have the entire investment universe, which we believe is differentiating as such.
We have a corporate finance unit or capital advisory unit, very specifically in our side, on our case, only buy side. We're only on the side of the investors. We have a number of exclusive offerings that we can give. For example, being the leading Swiss equity researcher, it's very powerful that the client can actually meet the person that has covered the share for the last 10 years and had the best ratings ever. Finally, debt financing, not just taking loans on our book, but with cosmofunding, actually helping clients to arrange loans that other players take on that book. I know with that, my time is over. I would like to thank you very much. I would like to use the opportunity to show you a QR code.
If you would like to test one or the other of our digital applications, please read it in, thank you very much. Now I would like to introduce my colleague, Markus Pfister, who will talk about an efficient capital markets machine.
Thank you very much, Georg, and welcome to my presentation about our efficient capital markets machine. Structured products was merged earlier this year with credit structuring and treasury to provide all risk transformation products from one source. Our center of excellence, called Structured Solutions & Treasury, offers therefore not only structured products, but also Lombard loans, mortgages, and manages the treasury of whole Vontobel. On the left side of your presentation, you can see how advised clients are serviced. A large number of external asset managers and banks are served by our client unit Platforms and Services. In addition, private clients are served by Relationship Managers in our client unit, Wealth Management. The products are usually created and executed through our multi-issue platform, deritrade, or on a bespoke solutions basis.
On the right-hand side, it can be seen clearly that we have also a large number of self-directed clients in the client unit, Digital Investing. These clients generally use our products and services from their principal bank via stock exchange or broker. This is mainly reflected in market share in these channels. These customers usually use our derinet for information. All these client units use our products and services for risk transformation. The breakdown for the first half 2020 demonstrates that most of the revenues are from Digital Investing. We are among the top 10 banks in the trading of structured products on digital channels with a long and strong track record in all major European countries. We are the biggest issuer in Switzerland and one of the biggest in Europe.
Last but not least, we have a wide range of products and are well-known for our quality regarding products, market making, and client service. Since a few years, we also establish our brand for actively managed certificates, where we already won an award this year for the best sustainable AMC. In this product category, we see increasing market demand for thematic investments in general. We are convinced and have already proven at various points that technology can do more than just automate manual work steps. On the client side, we will be able to deliver a better experience for customers by providing them with premium content they need to make decisions. Focus is on understanding the needs and pain points of our current and future users. Technologically, we are very lean and agile. We have one global platform and a global risk book.
Already today, we provide our customers services and products 20 hours a day. We will offer our risk managers more tools, such as automated fitting algos, which simplify their lives in such a way that they are able to cover a massively bigger number of products per person. This makes the business more scalable. Finally, we also use machine learning components to make the hedging of position more efficient, especially in the low latency trading environment, as François Rüf explained before. Our integrated architecture ensures that all content, be it recommendations, ideas, products, is available at the point of sale. The product finds the customer, not vice versa. In addition, the high-quality systems of structured products serve as the basis for the recently integrated lending business and treasury. We see ourselves clearly not only supported by technology, but rather driven by technology.
Our overall goal is to lighten the balance sheet while at the same time increasing the business. The merger of structured products with treasury and credit structuring is an important part in this undertaking, as all risk transformation products will come from one source. This has the advantage that risks are equally priced and we prevent arbitrage on the balance sheet. In the case of structured products, we aim to continue to establish a white labeling offering for third-party issuers. The ambition is to go live with Banque Cantonale Vaudoise by the end of this year, as soon as the testing phase is finished. We are also strengthening our internal marketplace for option prices to achieve the most competitive hedging prices for structured products. Beside internal hedging, about a quarter of option risks are already directly passed on to third parties.
This leads to a risk balancing between our own books and the transfer to counterparties. All treasury functions are now combined, and the trading book and banking book are managed from a single unit. This leads to improved diversification across counterparties, sectors, countries to achieve a better risk return profile and to improve predictability. Credit structuring now has more instruments at hand. Loans can only be granted to clients as a loan by loan or mortgage. In the future, also securitized forms such as leverage products or leveraged actively managed certificates are now also available from the same source. In addition, large and capital-intensive transactions can be passed on directly to investors outside of the balance sheet with cosmofunding. As a nice side effect, the technologically advanced system of structured products can also be used in part for the active margin monitoring of loans.
Overall, all this does not lead to more risk appetite, but to more service at the point of sales thanks to technological benefits. More business with relatively little capital. I would like to highlight a few of our growth initiatives. In the area of actively managed certificates, we will invest to offer best-in-class technology. Already now, we have a very comprehensive offering. We provide cross-asset products and listing in all key markets. We will gain speed with digital onboarding and fast issuance processes. We make life easier for portfolio managers with improved rebalancing tools and rule-based automation via model portfolios. As a further point of risk transformation, we will introduce leveraged AMCs to meet a large customer need. In recent years, we have invested a lot in the backend of our structured products platform.
We are now able to supply our customers with products not only via the multi-issuer platform, deritrade, but we can also integrate our powerful product pricer into the value chain of partners via state-of-the-art interfaces. The yellow bars in the middle of your presentation show the volume development via deritrade webpage, while the blue part shows the volume which we sell directly to partner banks via backend interfaces. We not only export solutions from Europe to Asia, but we also develop in Singapore and Hong Kong and offer these features to customers in Europe. Thanks to one global platform, we only have to develop each tool and each product feature once and can use it then to all customers in all markets via all channels. On digital channels, we are one of the top 10 banks in trading structured products.
We have a long and strong track record in all major European countries and have a high level of customer loyalty. derinet is by far the most visited Vontobel webpage. Our self-directed clients regularly search there for information, products, and prices. We will renew the platform technically and visually to create a unique customer journey and user experience that starts already outside of the platform. It will not just be a website for product searches, but we will rather help clients to identify suitable solutions from a One Vontobel perspective, making it easy and intuitive to invest in these solutions. Far from my side. I'm delighted to hand over to our new CFO, Thomas Heinzl.
Thank you very much. My name is Thomas Heinzl, as mentioned already. I'm the CFO. I'm in force since 1.5 months. It is my first appearance in this function and in this place, and I'm really excited and happy to be here. Would be a little bit nicer if we could meet in person and have chats and have interactions in this room, instead of me talking into a little black box, but we all do the best to get over this and hope the situation will improve soon. I have the pleasure to introduce a couple of great numbers which the organization has delivered over the last three years. Bsically, we're starting in H1 2017. As you can see, advised client assets growth was around 10%, which is quite spectacular. PBT growth 8.4%, the same or 27% over a three years period.
Don't forget, this happened in an environment where the industry is under pressure. We still have increasing regulation and complexity of the business. Finally, the markets over that three years weren't quite a walk in the park either. I mean, we had, of course, March 2020. Don't forget, December 2018, where there were a lot of opportunities where one could trip over and fall. The P&L that you can see here, the P&L development, is really a result of repositioning of Vontobel towards an investment house and the disciplined execution that goes with it. I'm going to take you now through a couple of drivers to show how this execution has taken place. First, strong growth in assets. We have grown the assets by CHF 55 billion, the advised client assets, or 33% since the first half year of 2017.
Net new money was the strongest driver, explaining roughly 55%. You have heard about Asset Management. Asset Management on their business grew more than 7% on average, with a strong acceleration after 2019. Wealth Management has delivered around 2%. The growth has been a little bit more muted since 2019, since the focus had to be laid on the synergy realization from the Notenstein La Roche integration. M&A contributed another CHF 15 billion or 30%, mostly driven by Notenstein La Roche. Finally, the performance. The performance looks a little bit small, but don't forget, first of all, we have a much stronger position than we had in the past in fixed income. Secondly, not all the markets have had such stellar growth numbers as the S&P, who made 33% over that period of time.
As you have heard earlier, the performance of funds and mandates have been quite strong. The second driver is the margins. Margins have been discussed before as well, but we wanted to show you that in comparison to a couple of peers. We have kept or expanded the ROA while the industry is in margin compression and in ongoing margin compression. If you look at Wealth Management on the left-hand side, we have improved our margin by 9%. The ROE has increased by 9% versus a peer group which at best has reached zero or had shrinking margins. Same thing on the Asset Management side.
Here we are slightly negative, but if you adjust for the shift of business mix, because we had more fixed income growth in that over the course of that time, the margin would be around 3% as well, so up to the top peers. We have added also the BCG survey on industry margin 2016 to 2019. That's timing-wise not quite the same, but it just shows that the - 6% shrinking of the margin shows how difficult the industry is in general. Vontobel has backed the trend of declining margins across the industry, mainly due to three things. Number one, strong products and strong performance. Number two, excellent client service and creating new products for clients that clients actually need. Thirdly, of course, pricing discipline always plays a role in these things, too.
Let me come to the third driver, the high share of recurring income, and I will answer the question that Zeno has been asked earlier. That's a little bit less obvious one. The percent of net commission and fee income, we have a much higher share than most of our competitors with 89%. Let me explain the anatomy of how the development works between the commission income and the trading income normally if you see a significant decline like the one we saw in February. What normally happens is the AUM's market is going down, AUMs are going down. We have a market bottom, either it is fast or takes a little bit longer, and then the market is going back up. That would be our revenue line. Trading works a little differently because clients in the beginning of the downturn, they trade a lot.
They are adjusting their portfolio. They're afraid of further crashes. They hedge their portfolio and so on. You have a lot of trading activities in the first phase of a decline of a market. What happened afterwards, if the adjustments are made, the trading normally stops, so clients don't trade significantly less. Even for our books, I've looked it up earlier, February, March, April, our trading has been 50% higher than what we had on average during that time. The question comes, what happens afterwards? The trading then normally drops to relatively low levels. The AUM is low and clients are in a waiting position. If the market picks up again, we have seen various patterns here. Normally, the clients are not starting to invest immediately.
What clients do is, depending on what happened, they're more or less afraid of investing and they are very slowly starting trading and trading into that market again. That's the area where we have a much faster pickup. As a general remark, of course, a higher share of revenue income, higher share of recurring income goes both ways. If all our Wealth Management clients would turn into Robinhood traders tomorrow and day trade day and night, then of course, we would have less upside than trading income-oriented peers. On the downside, we have much more resilience after this initial phase that I just described. That allows us to have more stability in planning. If we have less client activity for six to nine months, that doesn't mean we have to choke off long-term investment initiatives, and it allows us to behave less cyclical.
That's the big value of having recurring income. After the income side, I would quickly like to talk about the cost. If you look at it on the highest level, you see that we have reduced the cost-income ratio by 1.4 percentage points, despite some significant growth, which looks like not a lot of improvement achieved. If you look into the details, the picture looks very different. We have reduced the cost-income ratio through operational work by 7.3 percentage points over the course of three years. 7.3 percentage points reduction of cost income over the course of three years. That's quite an achievement. A bit less of that is coming from cost discipline on the existing business, and a little bit larger chunk is coming from the integration of Notenstein La Roche.
What you see as the next block is we had some dilutive effect from Notenstein La Roche. When we bought it, they had a much higher cost-income ratio than we had. Net, we have achieved a cost-income ratio improvement from the Notenstein acquisition, all included, of more than 2.2% already. That also explains the focus of Wealth Management on making sure that we generate the value and generate the synergies out of this acquisition that we have done. The next topic, the 1.5 percentage points, is what Zeno explained earlier. It is the increasing investment in IT. I want to make one point here. It says data and analytics, but we're not talking about lofty spend on research labs or stable coin initiatives with consortia of other banks.
What we're talking about here is concrete investments, both to improve on the client side and to improve also on the efficiency side. Salesforce has been managed. Once we have Salesforce rolled out, where we have invested already quite a bit, we have all the clients on one system. All of our clients across Vontobel are then on one system. Having this data integrity, this data consistency, that's the basis of all of the nice things like digitalization, robotics, AI, all the things that people talk about. The change in business mix, that's driven by the consequence of the portfolio adjustment that we have discussed earlier. You have in total 1.3 percentage points of non-operating items, which include currency and accounting, where this is mostly an IAS 19 effect. It's not cost leakage that we're talking about.
We have taken significant amount of costs, and through some of the strategic initiatives that we have taken, we have reinvested, or changes in the business mix that are driving the cost-to-income ratio up again. The last driver that I want to talk about is risk. Our annual reports always states that we are conservative in risk management, and we are, and I want to show this here. On the market risk side, you see that we have reduced risk-weighted assets roughly by 20%-25%. The reduction is coming from trading position, former IB business, and then the risk reduction after the COVID-related market disruptions. After COVID, we've taken the risk down significantly, and we have not yet gone up to the same level of risks that we had here, even in the beginning of 2017. On the credit risk side, the risk-weighted asset have increased significantly.
This is driven by the total lending volume, which has increased by CHF 2.5 billion, with around, again, a quarter stemming from Notenstein La Roche. Let me make some remarks on the credit risk side. We have very conservative lending and underwriting standards on the credit side. It's been mentioned before. We're also investing and have invested in technology to manage all of our risks as real-time as possible and of course, where it is sensible. That situation clearly has paid off in March and in April. We had no losses in Lombard. I've talked to a couple of people, and they worked a lot of hours, the most important thing, the front and the back of the firm work together all the time end-to-end to ensure that we don't have any losses on the Lombard side. I can give you another example. Loan loss provisions.
It says they've increased by CHF 5 million. They did, CHF 10 million of this CHF 5 million were coming from Notenstein La Roche that we had to take over. In essence, for the old business, we have reduced our loan loss provisions. Last topic here would be operational risk. It's not a lot to say about operational risk. We use the basic indicator approach. It's a percentage of the revenues. As we grow the revenues, the risk-weighted assets are going up. If I look at the historic losses that we had and compare them to the equity that we have to hold against it, I would say the equity that we have to hold is way too high for what we want to do, for the risk that we actually have here. How does this all come together?
What we've shown you here is the return on equity, and we have compared this to a cost of equity to gauge the value creation that we have realized here. Cost of equity, we just took a number. You can take many of them. Picture will be the same. What you can see is very important. If you take a longer-term perspective, Vontobel, first of all, has done a turnaround in the first couple of years and now has created significant value since 2014 and has done so at an accelerating pace. Every year we create a little bit more shareholder value by opening up the difference. Also, we have significantly increased the dividend in the same period. As you have heard all the other speakers, we plan to continue on that path. Now, CFO, what would that mean for the CFO?
How can I as a CFO or the CFO organization help to translate the strategy that you have heard into value creation for our shareholders? First of all, I mentioned this briefly already, this capital markets view, be it capital cost, economic profit, economic value added, shareholder value added, all of these measures. We are looking at them, and we will make sure that they are being heard, used in every corner of the organization.
With a new setup, we can also start optimizing an integrated value driver view front to back. We have a view now of all of the value drivers front to back and how they work. We do not want to be the most accurate in splitting costs and revenues, the world heavyweight champion in cost allocations. What we want to do is we want to contribute to maximize the pie for the whole of the firm.
We do this by supporting the business in their optimization. We are calculating profitability after capital by client, product, channel, and so on. If you have the capital charges and everything included on such measures, it allows you to do a lot of optimization, be it in pricing, be it in product design, be it in CapEx approvals, and so on. The amount of applications that allow us to improve and optimize the business is quite significant. We will continue to use analytics to get to the bottom of things. On that, getting to the bottom of things, we will focus on three topics. Number one, we want to maintain a disciplined cost management. Number two, we want to fight complexity as we grow. We want to make sure that we keep everything as simple as possible as we grow.
The last thing is we want to focus. Focus on things that really matter and things that move the needle. Of course, that is also something that has been managed before, we will keep a conservative risk stance. We are not going to open the tap. We will keep a conservative position towards risks. Last, we will hire in the CFO area diverse and international talent from our top competitors, and we want to be sure that we learn from them. We're not only hiring them, but we are actively learning from them. That takes me to the targets. No surprise we are going to keep the targets. The macro outlook currently is a little bit mixed, to say the least. We had this drop in March. We had a good recovery afterwards.
Currently, it seems that the economy is stalling and is struggling to push further ahead. It doesn't seem to reach escape velocity. It's difficult to say whether we will see a really benign environment coming. On the other side, monetary and fiscal policymakers stand ready across the globe to intervene as soon as anything happens in terms of bad economic development. We wanted to keep the targets as a sign that we believe in the strategy and also in the resilience of the business model. That takes me to the end of the financial part. If I can talk about five things that you could take away from all of this day, all of the things that have been discussed, it is the following.
First, Vontobel has successfully adjusted its business portfolio, and it has done so by consistently driving the levers of client centricity, being investment-led, enabled by technology, empowered by people. Secondly, against a difficult industry backdrop, we have delivered on all of the key drivers, and we have gone through them earlier. As a result, we are increasingly generating value, and with the strategy and the priorities that we have presented to you, they are designed to further keep us on that trajectory and help us grow further. We see significant growth opportunities. We've talked about Asia, U.S., global banks. These are massive profit pools, and we have only started dipping our toes into these pools. We have everything in place that should help us to succeed in that area.
We have the track records, we have the right people, we have the right resources, and we are building on proven strength to gain these markets. Finally, the family control did ensure and will ensure a long-term shareholder-friendly stance at Vontobel. Thanks a lot. With that, I would ask my colleagues to join for the Q&A. I t will take us a bit of time. We have a little bit of delay. We're working through this. First question is from Daniel Regli. First of all, where do you see the gross margin composition going medium term, referring to page 67? Can you give us a rough breakdown? Do you foresee a cap to the interest income component? Similar question, but speaking more generally. Swiss private banking, Georg, that's for you. We've seen gross margin pressures over the years due to various reason regulatory changes.
How do you see that develop? Is there a light at the end of the tunnel?
I start with that one. Start with page 62. Well, yes, that's true. We have seen the margins decreasing significantly. Not in our case during the past years. We have been fighting strongly against that. That was a combination of changing our value proposition, of course, repapering and repricing on a value-based pricing scheme. I can't see into the future. I would expect the general industry margin to further decrease. I would also expect us, with a differentiating offering and with a sales force or a relationship force trimmed on profitability, to further be successful on that note.
Thank you. The next question is same one. How price sensitive are your clients, and what are key pushbacks when negotiating on fee margin? Has the correction seen in H1 eventually helped that clients appreciate professional advice again?
Clients are price sensitive. Obviously, there's competition out there. I think wealthy clients understand that there is a price for value. They understand that a price has to be paid for a differentiating product. They understand that a price has to be paid for performance, for alpha generation. I think these discussions, so far, we have been able to successfully manage with our clients.
Good. Next question also for you. Why do you think you're better positioned to cater to ultra-high-net-worth than the large universal banks like UBS and Credit Suisse? They regularly stress the need of an investment bank to serve these clients. What do you think about this argument?
Well, that's obviously a different business that the very large competitors do, and you can read it. I think every CEO or head of ultra of the large clients say that they will have to use their balance sheet even more in order to cater for ultra-high-net-worth individuals. That is not our plan, as I said. I think we have a specific offering. We have, first of all, a buy-side only offering. We have no conflicts. There's nobody who has no conflicts. That is very important. Secondly, we will focus, of course, on the liquid investments where we have a very strong offering, combined with advisory services, combined with family planning services. I think we have a lot to give.
How many players can say that they have a successful family behind the business, and how many can share some of the experience how that is managed? That's why I think we are a very relevant player when it comes to people with a large wealth, when it comes to people that own companies. Not sure the large competitors can do that.
Very good. Next question also to you, Georg. Do you have new markets in the pipeline for Digital Investing, or these market entries are not in focus for the market? That's a question from UBS.
Perhaps I take that over on behalf of Toby Triebel, who will be with us as of October 5th, but I have been in charge for digital so far. Within digital, public distribution is the bedrock or the starting point to the business. There we have already market presences across Europe. It's Switzerland, and then within Europe it's Germany, Italy, Benelux, France, the Scandinavian countries, and it's a footprint in Hong Kong. The first mandate is to deepen the penetration of these markets and to broaden the offering to the client, starting from public distribution and building from that strength towards a more holistic digital offering. We think deepening and scaling market presences comes first, before we think about entering other markets.
Okay. Next one is on Wealth Management again, from Nicholas Herman from Citi. You talk about high client satisfaction, very strong platform, but growth has lagged. How are you going to reignite growth, especially given limits to prospecting new clients and hiring?
Yeah. Thank you. I think, as I said in the beginning, growth has lagged also due to our integration efforts of the acquisition. I think, as I pointed it out, first of all, we have proven in the past, and we will also prove in the future, that we are very successful in our growth based on hiring Relationship Managers and talent in the market. We don't believe that that is enough. We don't believe that that is enough for the future. That's why I said we have invested or we invest a lot in the entire area of creating digital leads, creating prospects, and feeding that flow into the Relationship Managers' pipeline. Secondly, also on a general sales management perspective, where we're at the moment re-ramping the whole approach, which is, of course, partly again technology-driven, but also partly driven by culture. Culture changes.
Next one is also for you, Georg. What are you seeing in terms of activity in Hong Kong? Are you seeing Wealth Management market share move as the Asian clients move assets outside Hong Kong and China? Have Vontobel and Swiss peers benefited?
Okay. Well, I think activities in Hong Kong, as you know, we have a very small shop in Hong Kong from the Wealth Management side catering for nine clients. It's a very specific offering that is just based on our Swiss discretionary and advisory mandates. We are not in the main business that is being done in Hong Kong that is very much trading based, very much leverage based. In that sense, we haven't seen large inflows also because I guess our offering doesn't correspond to the offering that the large flows that have been happening actually would require.
One question, I think for Zeno. We're seeing launches of digital private banks such as Alpian earlier this year. Do you see these digital private banks moving up the wealth spectrum into lower high net worth, or do you see that as unlikely?
If you would have asked us five years ago, we would probably have more been on the side unlikely. Today, we would say that also high-net-worth clients will increasingly ask for digital touch points. That was one of the reasons also why under the leadership of Georg and his drive, we have heavily increased investments into digital platforms, digital touch points on the wealth management side, where we're pretty sure, and you see that also in other markets, the dominating model will remain hybrid. We will never see complex clients, demanding clients, people who have wealth structured across generations, completely move away from human interfaces, human advice. That we do not expect it, but even in their client journey, the digital part will become more important.
On the other side, you have also to face the fact that obviously due to the efficiency pressures the overall industry has, due to the margin pressure the overall industry has, actually service levels for a significant part of the client groups is actually going down. I'm talking about the industry. I'm not talking about Vontobel. There is actually a huge opportunity to bring service back to them through digital channels, digital touch points, and data-driven intelligence in order to help them. I think, yes, we will see digital models, perhaps still with a hybrid kernel to it, take over ever larger parts of client segments as from the other side, the classic channels are moving to ever larger client groups. We see this not as a threat. We see it within our existing and sweet spot client ranges.
We see this as an opportunity to bring tech to the table. Through these client groups that are kind of left in the shade, we see this as an opportunity to our client unit, Digital Investing.
Good. One more for you, Georg. Do you consider partnerships globally as a way to grow in Wealth Management? This is a strategy that peers of yours have employed to accelerate growth in some of the focus markets.
Yes, we have some partnerships. One that is public, for example, is with Lombard Odier, where we have a partnership on the U.S. clients. I think we do that in specific areas, but in general, we have the ambition to be able to grow organically on our own with our product suite.
Good. Next question is coming from UBS, Martin Emmett. Investments into technology are necessary and seem to be one of the key levers of Vontobel's lighthouse strategy. No surprise, though, they also increase the cost-income ratio. Digital onboarding, Mars, Salesforce, et cetera, should over time free up time and resources, especially in the middle and back office. When is this going to be visible in the cost base? Can you quantify the expected impact?
Yeah.
Do you want to [crosstalk]
We stick to the cost-income ratio target.
I can add that we are measuring this very succinctly, so we know everything that is going on and when the benefits are accruing. Good. Next question, Nicholas Herman from Citi. Can we extend on the chart on page 93? If you think about the path from 74.7 to lower than 72, how would you explain the movement through revenue growth, business mix change, efficiency, et cetera?
Yeah. We get this question very regularly. I would say business mix change should probably we have seen more business mix change over the last three years than we're going to see going forward, because we now have such a big and important part from asset-related businesses. I would expect that actually, still the lion's share will need to come from revenue growth. We are still just when we look at the environment, we are thinking that this is an opportunity phase. It is an opportunity phase because there is so much change. There is change in the competitive landscape, and there is change in the way how clients are served.
If we make the call at our management discussions and when we discuss with our board, should we try to reap the benefits of this environment of change and onboard the talent, build the technology, we always come to the conclusion, yes, we should, and we do it. What should help through time is actually growth. You also, I think that was hopefully one of the patterns we were able to bring across. You didn't hear a lot about new markets or completely new offering or completely new products. We have the intention to scale with capabilities we have and to scale these further, and that should be helpful. We manage costs and, you hear and see and hear about measures where we deliberately then obviously, work on costs, do skill shifts, but we keep investing.
I would say the lion's share is expected in our plans coming from revenue growth on existing capabilities that should improve the scalability of the model.
Next question, Nicholas Herman from Citi. For me, with a significant U.S. dollar weakening, what can you do to protect the bottom line, ensure that you can deliver the targets? Of course, we have more revenues in U.S. dollar than we have costs. The answer is simply given by that situation. We need to move costs into U.S. dollar. We're currently in the process of defining a couple of measures, which would include things like, we want to denominate more of our contracts, of our IT contracts, for example, in U.S. dollars. What we're going to do is move the cost side a bit more towards the U.S. dollar. That's what we do. Next question, Nicholas Herman again. Annual growth and net new money targets. Do these apply to all divisions, or do you expect some divisions to grow faster than others?
I think that's one of the beauties also that we have a diversified and therefore very robust model. We tap into different segments. We also think that it makes a lot of sense to have that because not all client units are going through the same life cycle in terms of product adoption and adoption of innovation. We do also see different segments or business lines may be at different points. Obviously also on average, when the stars align, B2B businesses scale faster than B2C businesses. We can't do anything against it. We will never change that. On the other side, you get more resilience and more robustness. This is the average at the firm level, but it will not always be the same burden-sharing in each and every half year.
Through time, we are confident that with the business mix, we can make the aggregated targets.
Okay, next one, Zeno, is also for you.
Yeah.
On a broader theme, the recent division reorganization and cost reallocation makes it difficult for the market to track divisional performance. You have also now removed divisional targets, even at top line, which reduces divisional accountability. Can I ask why this is in the shareholder interest?
Yes, that's a very fair and a good question, and we are getting a lot of it, and I'm happy to comment on that. Please allow me to voice a few broader ideas around that. I think that we do not want to hide information from you, but we want to make sure that the organization acts as one firm focused on optimizing, A, value to our clients, and B, then out of that, as a consequence, optimal profitability and value creation for our shareholders. We just found that the way you report the business defines to a very large degree how you run the business. We found that the strict segment reporting of IFRS down to profit before tax was impossible to maintain with the idea of building one firm that shares capabilities and brings the best in the firm towards clients.
Just think about the ultra-high-net-worth segments where we are now building and training, bringing business. As soon as you try to serve a very competitive market while you have an internal organization that stacks different profit centers on top of each other, I can tell you that you spend a lot of time in internal negotiations, but then you will surely lose at the point of sales because your price is too high. Classic silo structures actually double internal profit center structures, and then they avoid sharing of capabilities and optimal leveraging of capabilities, just like the example of the Megatrend capabilities that Axel mentioned across the different client units. We are fully convinced that we need this set up in order to reap the best the firm can deliver. Now, what do we give you as transparency?
I think we still give you everything you need in order to judge how we are doing. You get revenues per client unit, you get margin per client units, you get net new money per client unit, you get the direct costs of all the client units, and you're getting the direct costs of the three main Centers of Excellence. You clearly see where our cost allocations are going. You see where the business is coming from, you see how the margins are doing, and you see where the net new money is going.
What we just want to avoid is that by having to share with the public client and product profitability, which you have clearly heard from Thomas, that we will continue to do it, and probably even increasingly so in an after capital perspective, that would limit our internal ability to cooperate and would focus management time on cost allocation and not on revenue generation. I think the only consequence is you have to trust us to a certain degree that we are responsible to the fiduciary duty towards you, that we as a management team are sensible capital allocators. You will be able to monitor us and to make a decision.
As we have decided that we do not see ourselves as a company that happens to own a number of businesses, but we see ourselves as one firm, and that is a prerequisite to do the best we can. We decided to change reporting levels, but we are very convinced is you get everything you need to measure us against the peers, and you get everything you need through time in order to judge if we do a decent job. In the meantime, unfortunately, you have to make a call on us as your fiduciary agents for capital allocation.
Good. Next question is from Daniel Regli. Maybe again on the gross margins in Wealth Management, what are the key drivers for the future margin pressure? Respectively, in which areas do you see the biggest margin pressure?
I think, okay, one of the driver, but that's too general, is of course over capacity. There's still way too many wealth managers in almost any market in the world. I think I would single out two areas that are under very strong margin pressure, and then I think there's an area or where we believe it's less. Where it's less is, of course, in all the areas where we generate the value for the customers. That's on the mandates. When we can prove that our Swiss equity mandate and/or our 3α mandate has outperformed consistently in the past, we are able to get a fair value for that, and there we can defend margins. I think the two areas that are under pressure is all pure custody and execution mandates. That is trending almost towards zero with our large clients.
The second one is credit margins. It's for many large clients, it's not understandable why credit margins should be so far off of the capital market curve. In that sense, we're actually happy that our credit penetration is much lower than many competitors.
Question from Nicholas Herman. For me, again, the U.S. dollar was 9% of the H1 2020 costs. Where do you aim to take that over time? The U.S. dollar was a little bit more than 9% in the first half. What we aim to do is to get as close as this is possible, matching the income and the expenses to take out of the P&L and out of the fundamental P&L, the currency risk and currency translation risk, as far as this is possible. What we don't want to do is to start hedging these positions through swaps or other things, because first of all, it's expensive, and secondly, if it goes in the wrong direction, it's always a relatively difficult discussion to have with everybody why we put on the wrong hedges. That's the target. I cannot give you the target yet.
We're collecting all of the information and then we'll try to aspire to an as matched as possible currency matched, cost and income side. Another question for Wealth Management. Does the plan involve more client asset growth or more increased share of wallet? Can you give us an indication of average share of wallet within Wealth Management?
Well, the plan, of course, includes both. Especially in the first half year, it was almost only possible to work with existing client. Going forward, both. We don't communicate average share of wallet with Wealth Management. Unfortunately, I have to skip that one.
Are there any more questions? Good. Thank you very much. Thank you for all the questions. Thank you for the setup. We wish you all stay safe and all the best, and thank you for your interest in Vontobel.