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23% ADMINISTRATION


1. Online poll of 150 banks, brokerage businesses, registered investment advisors and financial planners in the US and Canadian markets


Figure 2:


What is most important for a wealth management firm to demonstrate empathy with its clients? (North American responses)


9% 7% 40% 21% 23%


In-depth client review meetings and discussions


Behaviour and ethics


Goal identification and profiling discussions Communication strategy Other


1. Online poll of 150 banks, brokerage businesses, registered investment advisors and financial planners in the US and Canadian markets


“If customers believe the finance industry is unable to show that it cares about its customers, wealth advisory firms … will struggle to convince clients that the business of wealth management is truly relationship-driven”


and not because they are service-oriented or believe there is merit in focusing on the interests of clients. It was felt by many that this “culture of self” permeates wealth


management as much as investment banking. The responses clearly show a ripple effect from the behavior of an


individual to their institution and out to the industry at large, with ever decreasing levels of confidence in the ability of financial corporates to put the interests of clients at the center of their business. If customers believe the finance industry is systemically unable to show that it cares about its customers, wealth advisory firms, regardless of how good their individual wealth managers or processes may be, will struggle to convince clients that the business of wealth management is truly relationship-driven. Most firms are intently focused on developing and implementing


their own version of a client-centric advisory model. This makes perfect sense: in a wealth advisory market that clients characterize as uncaring, the opportunity to differentiate with a proposition


Firms employ a range of practical processes to ensure wealth managers are in tune with their clients. These include:


Ö goal-oriented client profiling processes Ö segmentation initiatives Ö multiple-channel communication strategies Ö staff recruitment and retention strategies Ö elements of remuneration linked to client service Ö reducing administrative tasks Ö tracking the time advisers spend with their client Ö undertaking client research on products and services Ö having dedicated teams focused on ensuring processes are delivered in a client-friendly way Ö measuring loyalty and client referrals.


centered on understanding the needs of the client is attractive. Indeed, almost all the firms that took part in the research defined empathy in terms of understanding what their clients want and delivering against those wishes. The range of activity under way at different wealth


management firms (see box) shows a degree of commitment to relationship-building, but also serves to highlight the piecemeal nature of this effort. Clients are looking for behavioral change at both organizational and industry level.


Class act Wealth managers assume that high-quality client engagement presents the opportunity to stand out as different from the crowd. Yet the real opportunity may well lie in developing best practice and industry-wide standards. When high standards come as standard, best practice can anchor individual relationships. It can also demonstrate that the industry cares about the concerns of its clients regarding its own culture and ethics. From this research, a picture starts to emerge of what


future best practice may encompass. Four themes featured consistently in client and wealth manager responses: ƒ enhanced client profiling ƒ enhanced relationship management skills ƒ improved communications ƒ client-centric remuneration policies. The need now is to start developing standards in each


of these areas. With a concerted effort, the potential exists to move the debate away from what is right and what is wrong, and to focus instead on what is good in the wealth management business.


Catherine Tillotson is managing partner with Scorpio Partnership. FAMILY OFFICE: ASIA TOMORROW 57


OPERATIONS


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