America’s emerging wealthy prefer to rely heavily on relationship managers for navigating their financial future rather than supporting product specialists, according to a new report by SEI, Scorpio Partnership, and NPG Wealth Management.
The report, "Hanging in the Balance: Conversations with the Futurewealthy," is based on a global study, underscoring the impact of communication on the relationship between America’s emerging wealthy and wealth management relationship managers.
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SEI Wealth Platform, North America Private Banking senior vice president Al Chiaradonna said: "This report showcases relationship managers as the Futurewealthy’s go-to source for financial guidance. Wealth managers who recognize this as an opportunity to build and strengthen client relationships can, in turn, create significant growth opportunity for their firms. Implementing the proper technology and processes, however, will be critical to a firm’s ability to focus on clients’ needs, spending less time on operations and more on providing the financial guidance clients want from their relationship managers."
When asked how they would like to access products and solutions, American respondents preferred using their relationship manager to a specialist at least two-to-one nearly across the board.
America’s Futurewealthy preferred working solely with a relationship manager three-to-one in the areas of financial planning (56 percent vs. 18 percent), developing investment portfolios or help in selecting investment funds (53 percent vs. 17 percent), and direct investments such as stocks and bonds (51 percent vs. 16 percent).
The only area where respondents preferred full access to a specialist over a relationship manager was lending and mortgages (31 percent and 27 percent, respectively).
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By GlobalDataHowever, even in this instance, 33 percent of respondents still only preferred periodic access to a specialist.
Globally, the next generation of wealthy shares a preference for their relationship managers over specialists, however, not to the same degree as Americans.
For various solutions, the global Futurewealthy are more evenly split between leveraging solely their relationship managers and having at least some access to specialists.
For example, globally, respondents were split on solely using relationship managers or gaining at least some access to specialists for financial planning (46 percent), while 16 percent more American respondents prefer to rely solely on relationship managers (56 percent) over specialists (40 percent).
Futurewealthy rely on relationship managers to provide quality information, advice, and discussion regarding their financial performance and wealth strategy.
Among American respondents who are very satisfied with their relationship manager, the top three most important features of an interaction include reviewing overall progress toward existing goals (54 percent); discussing relevant developments and changes within their portfolio (48 percent); and discussing new investment opportunities (41 percent).
These are consistent with the global respondents’ preferences. Relationship managers are expected not only to have these discussions, but also to act as a filter for information most relevant to their clients.
SEI Advisor Network head of solutions Kevin Crowe said: "Relationship managers have unique insight into the Futurewealthy’s larger financial picture, positioning them to help uncover, build toward, and track against client financial goals. By helping to identify and then understand what clients are working toward, relationship managers are able to have more impactful discussions, present more relevant solutions, and communicate in a more timely fashion."
While quality often categorically trumps quantity, a critical factor in the relationship equation between relationship managers and clients is the frequency of communication.
The report uncovers the "tipping point" for client interaction. Globally, Futurewealthy report the highest satisfaction levels with relationship managers who make contact 11- to 12-times each year.
Nine or fewer interactions annually lead to lower satisfaction. Meanwhile, Futurewealthy in Europe and Asia prefer to hear from specialists five- and 10-times annually, respectively, while Americans only seek specialist input four-times each year.
"Wealth relationship managers are successfully navigating client needs in an increasingly busy world. As relationships grow, clients will increasingly expect relationship managers to be a conduit to nearly all of their financial needs. Executing the right contact strategy while providing sound advice, targeted solutions, and, when needed, additional expertise, will help relationship managers strengthen and broaden these critical relationships," added Chiaradonna.
