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June 27, 2019updated 28 Jun 2019 9:40am

Strong client and brand relationships are vital for AUM retention

By GlobalData Financial

Personal relationships between clients and advisors are the single most successful retention tool in the wealth space. However, in the absence of a strong brand, wealth managers risk losing clients should an advisor decide to move on, says GlobalData

The importance of personal relationships in private banking comes as little surprise. Clients tend to be more loyal to their advisor than their wealth manager’s brand. Once trust has been built, clients avoid taking the risk of trying a new advisor should their existing one decide to take their talent elsewhere.

However, data from GlobalData’s ‘2018 Global Wealth Managers Survey’ shows that a trusted brand is the second most important reason high net worth individuals invest with their current wealth manager as opposed to a competitor.

Personal relationships are leading – yet not by much: 18% of respondents selected this reason, compared to 15% for a trusted brand. Nevertheless, more needs to be done by wealth management firms to establish an affinity with clients similar to that of a client-advisor relationship.

Client relationshipsWealth managers will find success in introducing brand-building exercises. These bring attention to the company’s team of experts and its platform for investment in addition to the individual advisor the client works with, which is key in order for firms to retain assets under management (AUM).

Brand-building exercises at a corporate level are an effective means to bind clients to a brand rather than just a relationship manager. For example, UBS’ brand image revamp in 2015 successfully increased its relevance to the younger target market. It positioned itself as a provider that clients can connect to through the use of brand values, such as diversity and sustainability. Credit Suisse, on the other hand, has been successful in marketing itself as a brand that resonates with entrepreneurs, and as such is creating a brand association based on the benefits it can provide for this segment.

Providers need to realize that opting out of introducing brand-building exercises, and as such failing to create brand loyalty, will leave firms at risk of losing clientele when a relationship manager leaves the company.


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