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The credit crisis has meant significant challenges for all financial services organizations, from containing costs to re-evaluating market risk and refocusing on clients.
Wealth managers have not been immune to this and their priorities have had to change.
Now that the emphasis is once again shifting and global wealth is returning, financiers are wondering how they are going to achieve the returns that they realized a number of years ago. Wealth managers are facing new challenges to grow their businesses.
This Point of View focuses on how wealth managers can differentiate themselves from their competitors by aligning their business to reflect client trends, becoming a provider of choice for all clients’ financial needs. In particular we look at the need for wealth managers to address four key areas:
The market remains under penetrated, with approximately half of all potential clients not using wealth management services. Accenture believes that an integrated multi-channel business model can be a differentiator and source of value. High Net Worth soloists are the most likely to use websites and trade online, yet the industry does not serve them.
Segmentation is key and clients should receive the service offerings they desire. Service offerings should be evaluated from both a cost and value perspective to target and effectively migrate clients to their optimum mix. Clients who feel that they have an intimate relationship with their wealth manager will be more loyal.
Good Products, Competitive Price
Exclusivity is a driver of value; access to exclusive funds, access to particular fund managers and access to particular investments that genuinely add value. These services cannot be commoditized and can command significant margins. However, clients will not pay for commodities that they can get cheaper elsewhere, therefore in order to maintain the entire client relationship, wealth managers need to act as a conduit for lower cost products.
Operational metrics indicate significant diversity in operational efficiency across the wealth management industry. Wealth managers are often less efficient than investment banks and most other asset managers.
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