The need to enhance client service and communicate effectively is pivotal to a wealth manager’s ability to gain and retain clients. Today’s clients want more personal engagement, anytime-anywhere portfolio valuations and transparent reporting.
Communications must be well presented, personal, and accurate, and clients increasingly expect online and mobile delivery as standard. At the same time, some wealth managers have had IT budgets cut by as much as 30%.
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How do you absorb this without negatively impacting client service? More importantly, how can you achieve savings on this scale while improving client service at the same time?
By automating the client reporting function and increasing operational efficiency, client services teams can reduce costs, spend more time engaging effectively with clients and focus on enriching client experience.
Client servicing benefits
When wealth managers automate the client reporting process, the reporting window is shorter, shallower and less ‘peaky’. The entire process is less disruptive, resource-heavy and key-man dependent, and each reporting cycle is less prone to interruptions.
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By GlobalDataClient services adopt a management-byexception approach to handling discrepancies, and they do it with speed and efficiency. The risk of error and non-compliance are dramatically reduced.
Reports can be distributed more frequently and vast increases in report volumes can be accommodated without increasing staff. Furthermore, they are producing very highquality, personal communications – in print and online – that support corporate branding and global marketing initiatives.
When required by clients or regulators to change report formats or content, they can do so quickly and costeffectively, because modifications can be made without recourse to IT.
Bottom-line results vary dramatically, however in our experience a typical asset manager will automate 70-90% of the client reporting process, and a typical wealth manager will produce 50,000+ reports in a six-hour overnight window, in a variety of formats.
By eliminating manual processes the opportunity to increase direct client engagement increases.
Client engagement is further enriched when wealth managers deliver online portfolio valuations, either via a website or an interactive portal, which provides clients with real-time access to current, historic and date-ranged valuations, self-service drill-down capability, online brochure ware, clientmeeting packs, presentation packs, controlled social media, and collaboration tools that provide 24/7 access to investment intelligence.
Given that client service plays a vital role in ensuring growth and minimising risk, why are so many wealth managers lagging behind?
– 20 years of back-office underfunding. Having lost many a fight for limited funds to the front office, existing back-office systems are increasingly ineffective and difficult to maintain. Home-grown proprietary and legacy systems rarely deliver the kind of best practice now built into pure, market-leading client reporting solutions. Continued investment in these systems is unlikely to bring competitive advantage.
– Pressure to fix data management first. If your client services team is keen to automate reporting but your executive committee issues a mandate to perfect data management first, you are likely to find yourself at the tail end of the curve, still seeking competitive advantage in five years’ time.
– Data privacy restrictions. Many firms constrained by legal or self-imposed restrictions concerning client data transfer between jurisdictions believe that enterprise-wide reporting solutions are not available to them. This is no longer the case.
Where are we today?
Most technology evolutions follow a consistent path: costs reduce over time as adoption increases and the hype surrounding early offerings stabilises as solutions become robust and feature-rich.
Client reporting is no exception. Costs are now realistic, capabilities match supplier claims, risk is low and those who have adopted in recent years are gaining leadership positions. When wealth management firms get client servicing right they enjoy enduring client relationships underpinned by trust and loyalty.
Those who were at the leading edge of client reporting automation five years ago have a head start; however implementation timescales have shortened dramatically, enabling ‘new adopters’ to gain ground quickly.
The longer wealth managers delay adoption, the greater the gap between leaders and laggards will become, and the greater the challenge to gain and retain clients will become.
Alan Hamilton is CEO of client reporting and software provider Equipos
