Loyalty in Wealth management requires ‘Chameleons’

Loyalty is like a key performance indicator for wealth managers and worth of mouth referrals are the best leads to new clients. As wealth manager you focus on making your wealthy clients (HNWI) happy. If all (or most) of your clients are happy, we could argue that you do not have to worry about the size of the portfolio you are managing.

Unfortunately, the loyalty subject is not very easy to catch. The loyalty of a 60 year old HNWI will be achieved in a complete different way than for a 30 year old HNWI. Different life stages, different personal interests or different needs are just examples explaining this. Again flexibility is asked from the wealth manager and yet another example of the fact that a wealth manager needs to be a ‘Chameleon’ like. Without going to discuss the role and activities of the wealth managers too ‘broad’, the job of a wealth manager requires increasing flexibility in managing client relationships. HNWI demands have never been as high as they are today and because of the increased diversity of the HNWI population this requires this flexibility of them. Diversity has never been discussed so often.


Are you the single point of contact for your clients?

Capgemini’s & RBC Wealth Management World Wealth Report 2013 Customer Behavior survey showed that just 34% of the interviewed HNWI’s has a preference or strong preference for 1 single point of contact with their bank/firm. If clients would be very loyal I would expect this % to be much higher. In fact it means that 66% of the HNWI’s say that they don’t really care to have contact with a diverse group of people (most often specialists) within their bank. This makes building a personal relationship very challenging.

Don’t waste time

For loyalty we see the same situation as with diversity. It has never been discussed so often. Building a relationship is not something you do in a week or what. It requires an investment of time and for every client this investment of time is different. Every contact moment should be approached as moment of truth. What is the added value the client gets out of this particular moment of contact? Make sure you set your own goals and their goals upfront (for every meeting!) and let them benefit from you.

HNWI clients are looking for authenticity in the wealth managers’ messages and need a connection between them and the wealth manager. As wealth manager you should be able to showcase stability and uniformity in you interactions and the messages you are exchanging.  Uniformity in your message and your advice creates trust. Trust is the key driver behind loyalty.

Be flexible

As HNWI clients could have complex questions a wealth manager has to be able to act properly on this, because this is actually the reason they need a wealth manager.  There are complex question that could expected way in advance as these are part of a general customer lifecycle (children going to college, retirement etc). Because a wealth manager expects these questions (at least I hope so) they could prepare properly for this. In fact HNWI clients expect the wealth manager to raise these upcoming questions as that is why they have a wealth manager. There are also complex questions that pop-up unexpected. Think of unexpected illness, accidents, or unexpected ‘wants’ of a HNWI. In these situations wealth managers’ flexibility is essential. He or she should be able to act quickly (e.g. by getting the right specialists involved) and sensitively (depending on the client situation). If they are able to demonstrate these skills properly they could differentiate themselves as wealth manager and be or become the trusted relationship manager for their HNWI.

Don’t ignore trends

Ignorance of certain trends, like the increasing use of social media, will be punished by the clients. You don’t have know all ‘ins and outs’, but you have to understand that they exist and what they could do. Ignorance in this being not doing anything with it or openly challenging by wealth managers of the fact that they think it isn’t worth discussing these subjects. Especially your future clients, or already the younger HNWI’s you are targeting today, expect this. They are on top of these trends as everyone is much more informed than they were 10-15 years ago.

What can we learn from other industries?

When we take a look at other industries like supermarkets, airliners or retailers we see some great examples of how they bind customers to their brand. These industries do not have a personal relationship with their clients by use of a relationship manager. Even then, they show their ability to build some kind of relationship with them. By offering savings programs, informing clients of new products that match their shopping behavior or just a variety of services for different segments under one roof and all of this easy accessible and fast! They are using data in the most optimal way (by making it smart)!

Wealth Managers, because they know their clients so well, should be able to create this loyalty from their clients as well, or actually go far beyond these other industry examples. Do  something unexpected and be pro-active. This will be much appreciate by the HNWI’s. As wealth manager you have all ingredients to do so!

I kindly refer to a blog of Megan DeCosta: “How to gain the Loyalty of Millennials?” A very interesting read as well around the same subject!

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