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.

Has Elon Musk's launch impacted the energy of entrepreneurs?

Money and scaling up your business is a key part of early day businesses. Self funding is one of the options, and then crafting the business and product until it is proven. Getting validation is a common characteristic of most of my best investments.

Holy Moly, Elon Musk achieved epic market validation for Space X by showing his Falcon Heavy launch to the world. 

Not only that, Elon has just executed what will become the text book case for branding with the video of the launch posted on Instagram. As I watched these videaos, the incredible achievements of reusable rockets returning to the launch pad, the cars lined up to watch just like the landing on the moon days, the thrill of seeing that iconic shot of the world with the astronaut sitting in a red Tesla, hood down, cruising through space on its way to Mars, my eyes filled with tears.

Suddenly,  Musk's crazy Tesla in space made on Earth by humans became obvious. This crazy, eclectic big dreamer, Elon Musk, just achieved his crazy goal. For attracting investors, crypto currencies seem dull by comparison.

The rocket launch highlight videos were created by Westworld co-creator Jonah Nolan. "The only way I know how to share [the Falcon Heavy launch] is a trailer," Nolan said. "It’s not for TV or a movie, it’s for the next part of the human story."

Elon Musk says your business should be about, "things that inspire you, that make you glad to wake up in the morning and be part of humanity."

This week, I am going to a startup lunch with top Toronto investors. I will be bringing that Elon Musk inspiration to fuel up my impact.

Game changer leadership of President Cyril Ramaphosa

Foreword by Cyril Ramaphosa

Since Cyril Ramaphosa became president of South Africa, many people know he wrote the foreword to one of my technology books and ask me about his character. What is he like?  If I were to sum up Cyril Ramaphosa, it would be to say he is all about disruptive leadership.

Cyril has an incredible mindset which is full of appreciation. He has emotional sense, people sense, but also an economic mindset. Gold appreciates, bitcoin appreciates, Cyril appreciates. What appreciation really means is that you give value. That is Cyril. He is not worrying about how he is going to get paid back. He is constantly giving greater value with generosity.

I was very fortunate enough to know Cyril when he wrote the foreword to my book on technology's impact on businesses and society in South Africa. He wrote about the changing potential for wealth in South Africa to reach more of the people.

Cyril's reflected on his own track record which was the accelerated African dream where he went from a poor Venda boy to President of South Africa. On that journey, Cyril had the courage to set up and run South Africa's first black union. It is easy to forget the brutal power of the government at that time and organizing any group could have resulted in death. Yet Cyril's inclusive leadership style helped the black union grow in power, He gained the respect of the union members and the management teams, becoming an essential part of the mining world. Cyril ran these union organizations for many years.

After being passed over by Mandela for the leadership of the ANC, Cyril went on to become the leading business man of South Africa, married into the wealthiest African family.

I was looking at Cyril's declared investments which give his stock ownership of South Africa's blue chip companies and also his private investments. It is great to see Cyril does private equity investments into exciting businesses such as Fever Tree consulting and McDonalds. This is a business man who understands all sides of the negotiation table. This is what will be the game changer for South African politics.

How did Cyril managed this meteoric rise in his level of success?

Cyril is a giver.

He has the mindset and behaviour of a man committed to win/win. As the head of the first black union, his ability to engage all people with his humour and warmth did its magic.  Mine owners and managers started to realize that their black workers were thinking people who could be brought on board for productivity boosts and better work practices to benefit all. Their opinions could be asked and they would no longer be silent. This is a happier work world. Win/win.
  

Women in South Africa were just beginning to rise up in the business world. At that time, I already had been the strategist for Investec Bank and my first book, The Power of Strategy, was a best seller and award winner. I remember Cyril was delighted to help me with my book. His foreword is full of the promise of the wealth of South Africa.  He gave me, a female, such support which in turn made me dedicated to my time in South Africa and to contribute to its economy and more.

Cyril was always making a bet on the future without concern about the returns. He is super succesful but also super generous. He now has become the leader of South Africa and he will bring that abundance of opportunities to the economy but also the society. The speed of change is accelerating. Cyril is the leader South Africa needs. He is the change South Africa needs and deserves. I am grateful to Cyril for believing in me and for all of his support.

Happy Valentine's Day

First step for business owners preparing for sale is to get a valuation

Perhaps that is why the recent research by Investor Watch reveals that nearly 60% of wealthy investors would consider starting their own business.

At the same time, the favorable economic environment is spurring some business owners to cash out. And it remains to be seen who will fill the void.

• 41% of business owners plan to exit their business.
• 80% will sell or close the business—or they’re not sure what to do. 
• Another 20% intend to give the business to family.

Business owners who plan to sell are far too often unprepared for the process. Less than half have had their business appraised, for example. I am always shocked by how many business owners think they only need an accountant and a lawyer to sell their business, The first step of getting a valuation by a professional advisor would quickly show them the value of their business.  Equipped with a reality check on their assumed price for their business, they can then see if their cash flow of their business will be a better long term wealth strategy or time to sell and invest the payout. Having an investment banker on the team to do the sale of their business becomes obvious after the sale of the business.

At the same time that business owners are thinking of exiting, 58% of wealthy investors would consider starting a business. Together, these trends are increasing the need for advice and creating growth opportunities for Financial Advisors.

Please give me a call if you are thinking about how to maximize the wealth of your business.  

We have much to offer business owner clients and prospects. From lending, insurance and retirement plans to pre-sale planning, Employee Stock Ownership Plans and more, All good conversations to have when it comes to building your long term wealth.

 

 

Join me on Twitter @jacolineloewen

 

Check out my book for business owners wanting to sell to private equity.

Money Magnet: How to Attract Investors to Your Business