“Wealth management” is a term that has resided in advisory community lingo for decades with the standard definition being a discipline that integrates investment advice into a more encompassing strategy that also includes, among other things, estate planning, banking and tax issues.Typically, the phrase wealth management has implied a level of service and product offerings reserved for affluent clients, but clients on varying ends of the wealth spectrum are increasingly demanding more holistic approaches to financial and life planning .While the financial services industry is evolving warp speed, the basic idea of wealth management isn't. Today, it's essentially the same as it's always been: private client-type segmentation with some other services beyond investment management sprinkled in. What that says is astute advisors with fresher interpretations of wealth management can enhance client relationships, thereby bolstering client retention and satisfaction.An area ripe for growth is appealing a consultative, personal touch to the wealth management process, regardless of the client's level of affluence.“A further defining quality of wealth management is that it is delivered in a consultative manner,” reports Forbes . “By being consultative, wealth managers are truly client-centered. A good wealth manager meets a client without any presupposition about what financial products or services are appropriate for that affluent individual.”
Wealth Management For A Changing Landscape
As has
been widely noted, seismic demographic shifts are altering the financial advisory business and some younger clients are apt to demand a more personal touch of their advisors than their parents' generation demanded. Many of today's younger clients want the advisor to know the relationship is human-based, not rooted in numbers.“The key is to have a client-centric strategy that’s built on exactly who you’re serving,” said Sterling Shea, Dow Jones’ first global head of wealth and asset management, in an interview
with State Street. “One of the trends we see among advisors who are most successfully growing their business is that they’re being more thoughtful about defining the ideal client.”Regarding the increasingly personal element of wealth management in the 21stcentury is the issue of trust; the bedrock of fruitful advisor/client relationships. For advisors, trust is part of the value proposition they offer clients and it is probably valued as much, if not more than, investment returns.“The more sharply you can define that around key values — trust, authenticity, understanding, empathy — that’s going to markedly protect you,” said Shead. “The ability to shape that trust through a really clean, easy-to-understand narrative, we think is going to be massively important.”
Bottom Line: Redefine, Reimagine
With the wealth management landscape shifting beneath their feet, advisors need to redefine their value propositions and client interaction as well as adjusting their view on their business models. Put simply, today's wealth management universe looks markedly different than it did when many advisors initially entered the business.“Against the backdrop of a changing wealth environment, firms will be forced to reimagine their business models and redefine their client relationships,”
said Cap Gemini. “To further strengthen client trust and connection, firms can turn to technology solution providers for support, tools, and new capabilities.”Related:
The Fee Conversation: Your Clients Are Having It, Make Sure It’s With You
