Roopalee Dave, senior manager, wealth and asset management, at EY, told delegates on Thursday there was a gap between client views and wealth managers views which needed to be bridged.
Citing EY’s global research of 2000 clients and 60 wealth management organisations, she said it was important to address how the client experience is defined, understood and improved.
“In terms of the amount of regulatory and tax change there has been, the research was almost a palette cleanser in terms of what firms should be thinking about from the clients’ perspective,” said Dave
“The unprecedented challenge the industry is facing is either an opportunity or a threat depending on where you stand.”
The EY research, produced in a report entitled ‘Could your clients’ needs be your competitive advantage’, outlines the well-known challenges as; fintech, fee pressure and new entrants but also spells out the size of prize.
EY found that 73% of clients are clients of multiple wealth managers and 57% would be happy to switch in the right circumstances. EY estimates the size of the opportunity as between $175 and $200bn of client assets.
One of the aims of the EY paper is to provide a concrete model for the client experience on which firms can model a holistic approach. It is defined in three ways performance, engagement and trust.
Performance
EY found performance is the most important; but performance can mean different things to different people, explained Dave.
Clients with long term goals prefer face to face meetings and bundled offerings. While those seeking outperformance prefer broad offerings and speed and frequency are more relevant over multiple channels.
Engagement
Engagement also offers wealth managers scope to acquire clients and gather assets by listening to clients on social media. Social media offers one of the greatest advisory opportunity because it cuts across wealth and age and should “not be put on the back burner” said Dave.
Here advisers need to take initiative and bridge the gap between clients and adviser views and challenge the paradigms and conventions of client and wealth manager communications.
Clients see social media as an opportunity to communicate with fellow clients and leave feedback as much as talking to advisers, however, wealth managers see it as only an opportunity to push their brand and educational messages.
Those who engage proactively on social media can really understand the client experience and the forces which lead to client acquisition and attrition. Presently those few pionerring firms would enjoy a clear first-mover advantage said Dave.
Trust
Trust is earned over time through performance and service. Here fee clarity offers the biggest opportunity for advisers. While performance is most important in building trust, firm reputation and adviser reputation where also ranking factors.
EY found a third of clients where dissatisfied with their wealth manager’s charges and a quarter were not sure how they were charged. EY wealth team recommends the industry rethink their charging methods before trust is yet further undermined.
Strategic questions
Delegates at the Future Advisory Forum were told they should consider four strategic principles:
Explore their core advisory offering across human, machine and hybrid channels in order to strike a balance face to face and digital.
Establish better pricing but not necessarily lower pricing models by building better, more transparent correlations between services and fees.
Listen to clients by “embracing the client voice” on social media in particular.
Execute the growth strategy by appointing an owner of the client experience – an individual or a team to join the dots and be proactive.
