Wealthy investors "same as us" in crisis panic

By Laura MacInnis

GENEVA (Reuters) - The world's wealthiest people are just as likely to panic when markets sink as regular investors, according to high-end bankers who say they are also working as therapists to the rich during the recent turmoil.

Entrepreneurs and others with millions to invest often hire "private bankers" in Geneva, London, Singapore or Dubai to manage their fortunes with a personalized touch.

Many of those clients made desperate calls to their wealth managers in recent weeks when stocks tumbled sharply and big investment banks failed, some seeking to buy tangible assets like gold and some wanting soothing words.

"They are absolutely the same as all of us," said Sebastian Dovey of Scorpio Partnership, a private banking consultancy, who suggested an investor with $10 million in the market and one with $10,000 would have the same basic response to losing money.

"They have the same emotional attitudes toward investing as any of the rest of us. The only difference is the size of their balance sheets," he told the Reuters Wealth Management Summit.

Boris Collardi, chief operating officer at Julius Baer (BAER.VX: Quote, Profile, Research, Stock Buzz), said that his Swiss bank's "relatively sophisticated" clients are seeking reassurance from their private bankers.

"Clients are looking for safety and stability. That's the current tone of the market," he told the summit. "We advise everyone to be conservative."

"They are definitely worried," agreed Christophe Bernard, managing director of the Geneva-based Union Bancaire Privee UBP.UL.

"We are not in the psychology business, but we need to speak," Bernard said.

It may be difficult to eventually coax bruised high-end investors back into the market after the recent turmoil, he said. "People feel better about investing at the top of the market than the bottom," told the event, held at the Reuters office in Geneva.

The Dutch savings bank ING (ING.AS: Quote, Profile, Research, Stock Buzz), whose private banking division caters to the very rich, said that entrepreneurs who have generated their own wealth had been slightly calmer in past months than those who inherited or otherwise came about wealth.

"We see on average more rational behavior because people understand it (the market turmoil)," said Bernard Coucke, head of ING's European private banking arm.

He said that although some clients have sought assistance buying gold or other non-financial assets during the turmoil, the bank is not recommending it as a strategy.

"Putting money in a vault or going in one asset class is dangerous," Coucke told the Reuters summit. "Gold is good to put on the neck of your spouse, not to invest in."

Overall, those served by private banks are in a better place to weather financial storms than those with more limited amounts stuck in mutual funds and pension funds, said Scorpio's Dovey.  Continued...