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MARKETMONITORWEALTHCHECK-UP


Timeto recalibrate the most valued client relationships


ANDCAROLINEBURKART


CLIENT EXPERIENCE WRITTENBYJENNYKVASKOVA


Wealth managers need to step up post-pandemic service levels to deter clients from switching to rival banks


F


ormostUKwealth managers, ultra-highnet worth(UHNW) clients are theirmostvalued,and valuable, relationships.


However, studies repeatedlyshow that this is far fromaneasycohort to service.Wealthyclientshavecomplex needsandareoftenmulti-banked, makingitchallengingto alwaysmeet theirexpectations. Aon’s Client ExperienceSyndicated


Benchmark,conductedsince2019for theUKwealthmanagement industry, uncovers thespecificsbehindwhat makes the clientexperiencestand out forwealthyclients. In2020, the benchmarkgatheredmorethan 8,000responses fromprivate clients ofbanksandwealthmanagers, collectively representingassetsunder management inexcess of£200bn ($275bn). The data shows that 39 per cent


ofUHNWclients–defined as those withat least £3min assets–are in the wealth consolidation phase, between the ages of 55 to 64. They are shifting their focus to capital preservation, stress-testing their financial positions andexploring a range of wealth transfer options to assist the next generation. Post-pandemic, these clients


arealsomorelikely tocontinue re-evaluatingplans.Their interests are complexandwide-ranging, requiring carefulconsiderationandtrusted professionaladvice. Mostwealthy clients have long- termrelationships withtheirwealth


6 APRIL/MAY 2021


firms. The findings showthatmore than half (54 per cent) have been with theirwealthmanager for 10 years ormore.Athird,however, startedtheir relationship within the last five years, suggesting a healthy numberare happy toswitch or form newrelationships. It isimportant to alsonote that


Net PromoterScores(whichtrack willingness to recommendthe firm to friends, familyandassociates) dip with increasingtenure–from43per centamongrecentUHNWclients, to 36per cent for thosethathavebeen with theirmainfirm for 10 years or more.These findingshighlight that havingmanylong-lastingclient relationshipsdoes notnecessarily guaranteeadvocacy. Wealthmanagers oftentout


diversification as theguidingprinciple ofsoundinvestmentmanagement andrisk mitigation.Unsurprisingly, thewealthiest clients aretherefore choosingtoextendthis lesson to their wealth relationships.The2020data showsUHNWshavemultiplewealth contactsand57 per cent spreadtheir wealth across several firms. Whenaskedfor feedbackon


their satisfactionwith theoverall experience,morethanathird (35 per cent) ofUHNWclients self-categorise as ‘neutral’ for recommendingthe firm to others in their personaland professionalnetworks. ‘Neutrals’ represent potential


precarious groundforwealth managers.Withanimprovedclient experience, neutral clientscanbe liftedinto‘promoters’ to help grow thebusiness via referralsandnetnew assets.However, ifawealthmanager’s responseismismanaged, clientscould fall further into‘detractor’ territory– whichhasimplicationsbeyondassets undermanagementandcanaffect brandreputationandloyalty. Whatmakes these findingseven


more stark is thatmorethan 11 per cent saytheyhave nothadan annualreviewor financial planning conversationwiththeirwealth manager in the last 12months.Ofthe 39per centwhohavehadafinancial planningconversation, only54per centgave topmarks–suggestingfirms have furtherwork todotounderstand what is drivingthese figures. Most firmsunderstandthe


importanceof deliveringaquality experienceto their clientsacross theirwealthmanagement journey. This isparticularlytruein times ofuncertainty,whenclients are more likelyto seekguidanceand reassurance fromtheiradvisers. Crucially forwealthmanagers,


research confirmsthat satisfied clients holdmore assets with their firmandaremore likely tomake referrals.Andso, since the start of the crisis, firmswho have delivereda first-class client experience have been able to leverage their ‘promoters’and the strengthof their relationships as a source of differentiation and revenue generation. Facedwiththeknowledge that a


sizeable portionofUHNWclients are passive about their relationships, however,wealthmanagers should take action. They shouldseek to diagnose the gaps in their client experience, prioritise desired improvements andtrack progress over time. Afterayear like2020, it is especially


important forwealthmanagers to re-evaluatetheirmostvaluedclient relationshipsandexplorenew avenues of growth. This starts with transparencyandcapitalisingontheir strongfoundationsto askforhonest feedback.


Jenny Kvaskova is manager and Caroline Burkart associate partner at AonWealth Management


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