Tag Archives: Next Generation

Where to go with private banking and wealth management…

Frequently over the past months we have heard about private banks and wealth managers considering divestment of parts of their businesses (e.g. Asian markets for Barclays, Societe Generale and ABN AMRO private banking) or (considering) selling off their wealth management arms (e.g. ANZ Wealth, MLC) to name a few. Although ‘divesting’ is not the only way to increase profitability of the broader ‘enterprise’ it outlines the challenges the industry is currently facing to realise profit.

While there are clear differences between regions, most of the drivers of these challenges are pretty similar on a global scale. I outline key areas of focus, which are not completely ‘mutually exclusive’, but can be looked at from a variety of angles.

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Wealth management – What are you doing next?

What a time to be in the wealth management industry… – What are you doing next?

In my work I am confronted daily with clients’ questions on what they can expect next to ‘hit’ them. We read and hear every day about startups, fintechs, robo advice, disruption etc. and I will obviously share my perspectives on these, there is also the logical next question of “what are you doing next?” All wealth managers know too well that their business model is under pressure and that significant change is expected (it has already started). Reality is that in many cases most of their budgets are still allocated to initiatives focussed on legacy technology and regulations. If they are considering top-line growth initiatives these tend to be approached in isolation or as an add-on to the existing practices, instead of being integrated properly into their broader business model and operations. This is interesting considering that there has been a growing emphasis being placed on customer centricity (and contrary to this, legacy technology and regulations are mainly internally focussed initiatives).

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Change creates opportunities

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How a cost driven solution becomes a differentiator for wealth managers…

… About the important role of digitisation in the segmentation strategy for wealth managers and their clients…

Segmentation

In the past I have written about the importance of the right segmentation strategy for wealth management firms and private banks. The segmentation subject sometimes has a negative undertone. Reading quite some angry comments on blogs that are discussing the impact of digitisation on levels of service from the negative side or what they call ‘reduced services’. I would like to use this blog to discuss the important role digitisation has in a segmentation strategy for the wealth manager and the added value to their clients.

Historically wealth managers (and banks in general) segment their clients primarily based on Assets Under Management. Advisers look into CRM systems and refer to conversations they previously have had (although this probably is captured in the CRM systems), to define the strategy how to approach the clients. Is the client an entrepreneur, a doctor or politician? This is how their segmentation is done. Of course I describe this very ‘black and white’, but Scorpio Partnership highlighted this recently as well. ‘Too rigid’? Oh Yes!

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What is the issue in retaining client relationships after wealth transfers?

High Net Worth Individuals (HNWI’s), or millionaires, see their Wealth Manager (or bank, in this blog I continuously refer to Wealth Managers as such) as their most important service provider. Not surprising, clients need a sense of security with the Wealth Manager where they have entrusted their money. They expect Wealth Managers to act in their best interests. Many clients expect their banking products and services to be a commodity. The promise to protect and the ability to grow clients wealth is only part of what a bank should offer to promote customer loyalty.

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