Our analysis highlights four client disconnects that wealth managers should address. These are outlined below along with some ideas for how to close them.
1. Client priorities: Start product design from value for clients—not from value for the bank
The first disconnect is between what the wealth management C-suite see as their clients’ priorities and what clients are actually seeking. With relationship managers traditionally “owning” the client relationship, and many people within banks assuming that clients are too busy to talk, most wealth managers have historically been reluctant to ask clients for their true views. However, our experience shows that if clients see that a conversation is going to lead somewhere—such as a better service from their bank—then they’re generally happy to invest the time to share their views.
Traditionally, product design began with how to create value for the bank. Internal product managers and regulatory specialists would get together and create a product that they hoped the relationship managers would be happy to sell to their clients. Banks need to reverse this process and use their client insights to start product design with value for the client in mind. Some banks are already setting up product co-creation and co-design circles with their clients and relationship managers, ensuring that clients’ needs are taken into account and that relationship managers buy into new products from the outset.
2. Holistic advice: Help clients connect to investment opportunities they wouldn’t otherwise find
To grow revenues, banking executives are often keen to offer “holistic” advice to high-net-worth clients across other areas of their lives beyond managing their wealth. However, clients might not always consider banks as the most credible player to do this. If they only have 20% of their entire wealth entrusted to a bank, they might wonder how that institution can advise them more widely? Also, for historical, structural and even regulatory reasons, there are many areas that banks don’t or can’t advise on.
However, what banks can do to make their services more holistic is connect clients to communities of their peers and introduce them to outside business opportunities—including direct investments that they might not have found themselves. Banks can also build relationships with ecosystem partners who are specialists in specific areas from property to tax to cryptocurrencies and introduce clients to these specialists when needed.