Wealth managers: Do you know what clients want?

Wealth managers’ client base is changing. Fast. The “old” money of the silent generation and baby boomers is starting to transition to younger generations with very different expectations and priorities. And new-money millennials are joining the ranks of the wealthy.

The result is a client pool that’s more diverse and more aware of social and environmental issues. And one that is also being targeted by new digital native competitors.

What does all this mean for wealth managers? It’s now more important than ever to really understand what clients are looking for, what they value most and how best to connect with them.

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.

3. Succession: Build relationships with the next generations—before they inherit

Our Orbium-Accenture survey found that, on average, 32% of the wealth inherited over the next five years is expected to leave the banks currently managing it. Preventing this potentially massive outflow of assets under management is clearly vital to the industry’s future. Yet only a few wealth managers fully understand what motivates the next generation or already have put in place ways to connect with them effectively. While initiatives like summer camps and financial training with industry experts may help, these activities may miss the inheritors in their 30s and 40s today. Also, client attitudes vary between regions: next-gens in Latin America are likely to be more keen to retain their parents relationship managers —but those in Asia Pacific and Europe might be more eager to make a break and build a relationship on their own terms.

A recent Accenture blog post highlighted some opportunities to connect with the next generation. These include orchestrating peer-to-peer next-gen networks, employing relationship managers more attuned with younger clients, and investing in data and analytics to understand and meet their needs better. It’s also important to consider succession among relationship managers as well as clients and encourage collaboration and teamwork so every client gets the relationship managers with whom they have the best “chemistry”. Building a more team-based culture could also help wealth managers attract and retain the right talent to engage the next generation and retain the relationship within the bank.

4. Sustainability: Demonstrate real-world impact from investments—including in local communities

Ecological and environmental concerns are gaining ground on wealth managers’ agendas, prompting them to offer an expanding range of sustainable investments. But while clients may share this interest in environmental, social and governance (ESG) investing, they might often have a misconception that sustainable investments produce lower returns—and that might be a trade-off they don’t want to make. So instead of investing in ESG products with their wealth managers, clients might look to do good in other ways, such as philanthropic giving.

For wealth managers to play more of a role in sustainable investing for clients, the key is to show real-world impact through compelling, human stories rather than graphs that all look the same. Many clients are especially keen to make a positive difference in their local community or in areas related to their business and experience. More and more banks help their clients find these types of sustainable investment opportunities or link up with non-profits to enable clients to invest in their projects, whether local or overseas. In every case, clear and credible reporting on the returns—both financial and in terms of societal or environmental impacts—is vital.

In our experience, most wealth managers who attempt to close these client disconnects and fail to do so fall into one of two traps. The first is trying to solve those challenges within their current ways of working, often using their usual resources. This could lead to the same old approaches that then might not resonate with clients. The second trap is hiring design agencies without dedicated and deep industry knowledge to conduct research and design a new approach. The outcome may then look beautiful on paper, but it might prove to be impracticable from a business, technology or regulatory perspective.

In order to avoid these traps, wealth managers should adopt an approach that is driven by a combination of fresh thinking, in-depth client research and deep knowledge of the wealth management industry. This blend is likely to enable a wealth manager to develop a customer experience, product portfolio and operating model that is fully aligned with its clients’ needs.

We believe that bringing the voice of the client into wealth managers’ decision-making isn’t just a nice-to-have—it’s an imperative for the firm’s long-term survival. By reconnecting with clients in the ways we’ve described, banks could start to build the wealth management organization of the future. One where relationship managers’ people skills and personal relationships continue to remain pivotal. One that combines powerful automation with top talent in areas from analytics to ecosystem partner management. And one whose culture has evolved from its origins in maximizing returns and minimizing risk, to one which positively embraces risk as an integral part of the change needed to win in the marketplace.

Interested? Let’s talk.