Client perceptions about their wealth manager have
improved significantly since the depths of the credit crunch, but
perception gaps still exist between how wealth managers see
themselves and clients rate their performance. PBI takes a
look at the intriguing new research that measures the value of
trust
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Every
wealth manager pays lip service to high client service standards
and the need to play the pivotal role of trusted adviser.
The reality is that adviser churn remains extremely high,
undermining long-term relationships, comprehensive new research
shows.
Over the past 10 years, 45% of
clients with a wide cross-section of wealth management firms had
their personal relationship manager changed two or more times.
A further 27% had them changed
three or more times, according to The Value of Trust.
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By GlobalDataAnalysis of the survey results
indicates that only one in 10 clients trust their wealth manager
within the first two years of signing up
“It generally takes six or more
years to gain a client’s trust, and considering almost half of
clients have had their relationship changed twice or more in the
past 10 years, this continuity is 
currently lacking,” says the report’s author Bruce
Weatherill, chief executive at Executive Consulting.
Trust in
crisis
The survey comes in the aftermath
of the credit crunch which saw many wealth managers suffer a client
collapse of confidence, as they tried to react to complex market
movements.
The study confirms that there is “a
large pool of dissatisfied or apathetic clients who will put
pressure on wealth managers in terms of costs, but reward them with
little profit”.
“Identifying these clients is a key
issue for wealth managers who should look to segment their client
base by both loyalty and satisfaction to identify different
groups,” says Weatherill.
For example, the study shows that
around 25% of the current client base has low satisfaction but
high
loyalty, meaning that while they are not at risk of leaving they
“are net detractors for the brand”.
Wealth managers should identify
these clients if they want to build quality, sustainable revenue
streams, says Weatherill.
Number
crunching
The research, sponsored by IBM, was
carried out between March and July this year, with 369 high net
worth clients targeted.
For the response of the wealth
management, 285 firms were quizzed.
The survey asked both clients and
wealth managers why their clientele stayed with the advisory
firm.
Top score went to quality of
service, with 82% of clients and 93% of firms rating this the
highest (see chart, top right).
Responses confirmed that all
clients want regular and appropriate contact with their adviser,
with 78% of clients giving this as a priority.
In fact, it outstripped portfolio
performance among clients (74%), underlining the importance of a
dependable relationship and trust.
The study concludes that to gain
coveted trusted adviser status requires “a higher degree of
satisfaction” than what wealth managers are currently offering.
The survey also looked at the
issues facing the wealth management industry.
The chief concern is maintaining
service quality with lower budgets, a preoccupation 49% firms
questioned.
The Value of Trust can be downloaded from
www.bruceweatherill.com
