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By M. Isi Eromosele
In
the present global economic environment, the opportunities to increase revenue
are limited. As such, many financial institutions are making forays into wealth
management as a way to generate new top-line growth. As some of these financial
firms already have an affluent customer base, they assume this can be easily
converted to a wealth management offering, while others recognize that they’ll
have to attract new clients to their institutions.
To
be successful in their chosen markets, these firms have to analyze their target
customer segments, carefully assess their strengths and weaknesses, and
differentiate themselves from their competitors. Additionally, these firms must
also leverage new technologies to ensure that their costs to serve previously
unprofitable segments are lowered.
Factors
like increased global economic volatility, the increasing number and complexity
of financial products available and the intricate personal responsibility for
retirement planning have made many previously confident individual investors
realize that they do, in fact, need advice. This demand, along with the lure of
attractive returns, has many firms considering entering the wealth management
space.
High
net worth (HNW) clients demand a superior level of customer service and expect
their advisors to have specific and extensive expertise; experienced advisors, in
turn, expect their compensation to reflect their abilities. For firms looking
to tap the existing wealth management client base, this level of service
creates customer brand loyalty that can be difficult for even the most
competitive firms to surmount.
Moving Beyond Products And
Services
Many
financial institutions currently view wealth management as an integrated set of
products: cash management, asset management, protection, credit, retirement and
estate planning and tax planning. While a product-centric approach to wealth
management is sensible in some areas (because products drive profit), this
approach fails to address a large portion of clients’ needs.
Given
that most wealth management products are roughly equivalent regardless of who
offers them; clients are less interested in product specifics, assuming they meet
certain basic requirements than in the elements of service that surround these
products.
While
firms target customers with a range of products as solutions to individual
wealth management needs, customers see their personal wealth management
strategy as a lifelong endeavor that influences every financial and practical
decision they will make from the immediate to distant future.
Even
customers who fail to grasp their bigger financial picture are driven by the
need to plan for specific monetary events that will impact their lives. In both
of these contexts, superior customer service, sound advice and an advisory
relationship are valued features not easily copied by competitors.
The
following five competencies address customer needs that enable firms to create
sustainable competitive advantage in attractive customer segments.
Advisory Relationships
The
core of any successful wealth management offering is the relationship developed
between the advisor and the client. Successful advisors develop a relationship
with clients by demonstrating that the client’s interests are the advisor’s
paramount concern.
Integrated
Information
When
information is automatically integrated across accounts and across
institutions, advisors can concentrate on helping customers make fact-based and
insightful wealth management decisions, rather than focusing on more mundane
tasks like assembling statements from multiple sources.
Multi-Channel
Access
Customers
want the ability to access their account information when they want, how they
want and where they want. The provision of integrated information and multi- channel
access empowers clients by enabling them to access constantly updated, accurate
information, whether in person, over the telephone or online.
Perception
To
win new customers and retain existing ones, wealth management firms must be
perceived as competent, dependable and empathetic. To compete effectively, the
firm must have a brand that is firmly associated with the qualities demanded of
a wealth management institution.
Personal
Touch
A
major component of successful wealth management offerings is human touch.
Clients respond to charismatic guidance and a high level of attention; they
feel valued when their queries are addressed promptly and personally. Firms
that go above and beyond expected levels of service will reap substantial
rewards.
The
key consideration as firms extend wealth management offerings to customer
segments with fewer assets is balancing the cost to serve with the revenue
opportunities associated with a particular client.
M. Isi Eromosele is the President |
Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance
Copyright Control © 2012 Oseme Group
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