Private banks will need to take tips from technology brands and “significantly upgrade” their customer experience and service if they are to attract and retain the high net worth (HNW) clients of the future, according to a new study. But what does excellent customer service look like in wealth management, and are clients willing to pay for it, asks Hannah Smith

Research from consulting firm Simon-Kucher & Partners found that 60% of 645 high net worth millennials surveyed worldwide (and 56% in the UK) are not happy with the service they are getting from their current wealth manager, and around 80% are using or considering using fintechs to manage their money instead.

This customer segment is not very loyal: on average, each millennial has more than three private banking relationships. Customer service is crucial to attract them, as they only give providers one chance to impress. What are they looking for? The research highlighted certain ‘wow factors’ including 24/7 access, their own choice of relationship manager, customised recommendations, fee transparency, and exclusive offerings. But it private banks are performing poorly on these services across the board.

An adviser at the kitchen table

Guy Healey, head of private banking at Brown Shipley, says that in his experience HNW clients expect a high-quality lead advisor who “sits around the kitchen table and is so close to the family that they get invited to the bar mitzvahs, the weddings, the funerals”. But, while that personal relationship is vital, the adviser must be backed by a strong team which delivers the service efficiently and accurately. “It is a people business but it can’t rely on one person. There needs to be a team.”

Guy Healey

As well as a close relationship, accessibility is vital, says Debbie Jukes, partner and head of client care at Equilibrium Asset Management. She notes most of Equilibrium’s high net worth clients want face-to-face contact, and some come to the office for a meeting every six weeks. Those with at least £2m in investable assets tend to come in every quarter.

“They want to talk about the state of the economy, our investment views. But it’s also about what’s happening from a personal perspective so there’s always something new to talk about. That’s part of our USP, the level of communication and engagement,” says Jukes.

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“The people we deal with want a comprehensive service, not just advice on the investments they have with us, they want to be able to ask us about all sorts of things. It’s a tailored, personal service. People want to deal with dedicated individuals, and they also have access to the founder if they want it.”

Very high net worth clients tend to be especially demanding, she adds: “They want a PA service – they want us to do what they want when they ask for it.”

Debbie Jukes

The importance of digital

As well as doing the traditional face-to-face contact well, today’s clients also expect wealth managers to have a decent digital offering.

Equilibrium has introduced its own app for clients to communicate with advisers more securely, while Brown Shipley allows clients to view their portfolios online.

“More and more clients now want to be able to see the value of their portfolio. Not check it every 24 hours, but to be able to get a quick snapshot, rather than necessarily phoning the bank. So the quality of that information, interfaced digitally, is very important,” says Healey.

VIP perks

Wealth managers typically offer extra perks for their VIP clients. Brown Shipley has put on client entertainment such as a private viewing of a Christian Dior exhibition at the V&A Museum in London, and private dinners at the Tower of London and House of Commons. Equilibrium recently hosted a track day for clients to drive supercars, and the firm remembers their birthdays and wedding anniversaries, and sends them Christmas gifts. “It makes them feel special, that they’re not just a number,” says Jukes.

What about cost?

These are some of the hallmarks of excellent customer service, and it seems HNWIs are willing to pay over the odds for it. Simon-Kucher’s survey found that HNWIs consistently ranked price as the least important factor when selecting private banking services. Jukes said Equilibrium’s clients are happy to pay for the service it delivers but, just to make sure, the firms asks them each year if it can keep the advice fees it wants to charge them.

“If you can add value then people understand the principle of ‘you get what you pay for’,” says Jukes. “We’re certainly not the cheapest in terms of advice fees but because of what we provide in terms of ongoing meetings, telephone access, dedicated staff, the levels of communication, that demonstrates the value we add, and people like that.”

In a recent study from Butterfield Mortgages, two thirds of HNWIs surveyed said they “are willing to pay more or achieve lower returns when making a financial decision if they receive a high quality of customer care”.

But, contrary to what the research suggests, Healey does not believe clients would settle for lower returns for long, however good their wealth manager’s customer service. “I don’t think any clients we’ve come across would accept lower returns. They will accept, if the relationship is strong, that you might have a bad year. But if you failed two years on the trot to deliver the kind of acceptable returns that they are looking for, then I don’t think you’re going to keep the client for much longer.”

As wealth managers’ margins come under increasing pressure, they will have to find the right balance between charges and service to attract and keep high net worth clients.