Wealth Management

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March 19, 2018

The importance of the client experience for Wealth Management

I found this to be a useful report by Scorpio Partnership on the trends of Wealth management. Below is my pick of the most important trend.

Google the phrase “client centric wealth management” (no hyphen) and you’ll be rewarded with hundreds of thousands of results. After all, the client is always at the center of the relationship between financial advisers and their investment portfolio, and wealth management firms focus on clients’ needs. Right?
Apparently not.

In a recent report, Scorpio Partnership struck at the heart of what it says is lacking in the wealth management industry: the client experience, or as one executive put it, placing “the customer at the heart” of the service experience.
“Wealth management should absolutely be built around client needs,” the report said. “Given the intimacy of the client/advisor relationship it may be hard to believe that it isn’t already, but the truth is that while many firms invest in listening to their clients, few put what they learn to work delighting customers day-in-day-out.”
As 2018 gets underway, we asked April Rudin, founder and president of The Rudin Group, about this disconnect between clients and firms; the “new” client experience; and why she believes 2018 will be the “Year of the Client.”
Below is a lightly edited transcript of the conversation.
CFA Institute:
I’m a little surprised that it’s 2018 and we find ourselves still talking about the importance of the client experience. What have you observed over the past year that makes you think this is an area that needs attention?

April Rudin:

Over the past year, I have noticed that while many wealth managers, and other financial services executives, are high-end consumers who value the client experience offered by luxury brands, for example, they struggle with translating that same experience to their own client offerings. For many firms and advisers, it means doing a 180 to see things from the clients’ perspective and how they value services, offerings, and even client communication. Something else I have seen is that some people who are using their smartphones and a variety of apps in their personal lives are reluctant or slow to adopt technology in their professional lives.
With $32 trillion (estimated) in the wealth transfer clearly underway, women and the next generation are reshaping the client experience. They value being treated and understood as individuals, yet much of wealth management remains in the “one-size-fits-all” mentality. Reconciling what clients want with what firms are offering will be the single most important area for the wealth management industry to focus on in 2018 and beyond.
The good news is that firms that get this right stand to have the greatest advantage in 2018 and beyond to grow assets under management (AUM) and gather new assets. And by the way, it’s iterative; not “one and done” — there is no single action or magic bullet. It must be an ongoing effort.
It is key for firms and advisers to keep their online/digital best foot forward. And on all channels. Today’s global investors are online and connected. They want their advisers to be as well.
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