THE NEW NORMAL: CODIFYING SUPERIOR CLIENT EXPERIENCE IN WEALTH MANAGEMENT FOREWORD The beginnings of this report can be traced While this report was produced in back to a marked uptick in the number of client association with Barclays Wealth and experience appointments crossing the editorial Investment Management, it is the product desk of WealthBriefing and its sister of deep collaboration with senior publications in recent times. While certainly executives at a selection of 30 wealth not a new area of focus, the seniority of the managers, consultancies and other executives being given oversight of client pertinent organisations. The viewpoints experience was taken as a powerful signal of presented here are therefore wide-ranging and just how seriously wealth managers are now at times at odds, but nonetheless many beliefs taking the softer side of their propositions. in common did still emerge. It would seem then that the industry is rapidly progressing towards If, like James Edsberg of the consultancy a shared notion of what the wealth Gulland Padfield, we define the client management client experience should “look experience as “everything not related to the like” and what firms should be doing to improve performance of financial products” then the it. However, as the reader survey reveals, there enormity of the task facing client experience seems to be a wide gap between what is heads becomes apparent. Improving how their considered to be best practice and current firm investigates its clients’ wants and needs; practice in at least some pockets of the ensuring that front-line staff are backed up with industry. How quickly this gap closes will be the right systems and processes; developing very interesting indeed. better ways to strategically leverage client feedback; and deciding where best to deploy In essence, this report aims to gauge what resources are just a handful of the things which wealth managers are currently doing to will likely come under their remit. While client enhance the client experience they deliver, and experience may not be a discrete business to offer expert insights for future development. area within most wealth management firms as It is however very much only a starting point to yet, it is easy to foresee a time when it could what I hope will prove to be an evolving be, such is the range of issues which come high-level debate across the industry, and - as under its scope, not to mention its impact on ever - we at WealthBriefing would be delighted the bottom line. to hear your views. Please direct any comments to [email protected]. The title of this report, The New Normal: Codifying Superior Client Experience In Wealth Management, came about through conversations with Scorpio Partnership’s WENDY SPIRES Seb Dovey about the Futurewealth project’s HEAD OF RESEARCH ultimate aim to calibrate and then codify the WEALTHBRIEFING client experience. The title was chosen to reflect the fact that while client experience is quite a nebulous concept, it can be broken down and “measured” on the basis of key proof points. Furthermore, it is intended to highlight the need for practical, systematic moves to improve client experience over mere rhetoric. CONTENTS EXECUTIVE SUMMARY 4 EDITORIAL PANEL BIOGRAPHIES 6 SECTION 1 - DISCOVERING WHAT HNW CLIENTS WANT AND NEED • The Proliferation Of Client Experience Oversight Roles – A Sign Of The Times .................................................................................................. 9 • What Do Clients Really Want From Their Wealth Manager? .......................................................................................................................................... 11 • In Focus: An interview With Mr X, An UHNW Client ....................................................................................................................................................................... 12 • Customised Versus Standardised – Striking The Right Balance ................................................................................................................................... 13 • Developing And Demonstrating A Deep Understanding Of Clients .......................................................................................................................... 15 • In Focus: Soft Skills, Hard Numbers – Crucial Areas Where Bankers Should Brush Up .............................................................................................. 16 SECTION 2 - DESIGNING THE PROPOSITION AROUND CLIENTS • Making The Cut: Using Segmentation To Enhance Client Experience ...................................................................................................................... 18 • Using Segmentation To Offer The Right Products And Services .................................................................................................................................. 19 • In Focus: The Rise Of The Internet Entrepreneur In Europe ....................................................................................................................................................... 21 • Product And Service Development: Anticipating Client Demand .............................................................................................................................. 22 • In Focus: Two Esoteric Value-Added Offerings .................................................................................................................................................................................. 23 • Which Value-Adds Add Most Value? .......................................................................................................................................................................................... 24 SECTION 3 - DELIVERING AGAINST CLIENTS’ EXPECTATIONS • Comparisons To Other Sectors, HNW And Beyond ............................................................................................................................................................. 26 • In Focus: Training Advisors To Wow Clients – A US Perspective ............................................................................................................................................. 27 • What Are Areas Of Opportunity For Firms Committed To Delivering A “Wow” Client Experience? ......................................................... 28 • In Focus: Service, Fees And Performance – Top Reasons Why UK Clients Look To Leave ......................................................................................... 28 • In Focus: The Interplay Of Fees, Performance And Service – A Sample Of Views .......................................................................................................... 30 • In Focus: Data Underscores Digital Demand ..................................................................................................................................................................................... 32 • In Focus: The Digital Revolution In Wealth Management .......................................................................................................................................................... 33 • Beyond Handshakes: The Value Of Service Level Agreements .................................................................................................................................... 34 • In Focus: Standardised Service Models – Lessons From The US RIA Space ....................................................................................................................... 36 • In Focus: What Can The Wealth Management Industry Learn From Ritz-Carlton’s Service “Gold Standards”? ........................................... 37 SECTION 4 - DEMONSTRATING THAT CLIENTS ARE AT THE HEART OF THE BUSINESS • The Merits Of Making Clients Feel That Their Voice Counts .......................................................................................................................................... 38 • In Focus: Citi Private Bank – Reaping Rewards From Client Feedback ................................................................................................................................ 39 • Client Insight: The Emergence Of A Two-Speed Industry? ............................................................................................................................................. 41 • How Well Are Wealth Managers Strategically Leveraging Client Insight? ............................................................................................................. 44 • In Focus: An Award-Winning Client Satisfaction Strategy .......................................................................................................................................................... 44 • Using Client Feedback To Shape Staff Behaviour ............................................................................................................................................................... 45 • Exit Interviews – The Ultimate Feedback Mechanism? .................................................................................................................................................... 46 • Deepening Relationships, Rewarding Loyalty ...................................................................................................................................................................... 47 • In Focus: Little Book of Wonders – A Proactive, Personalised Approach To Client Appreciation ........................................................................