A major theme of financial services institutions, especially those catering to the high-net-worth market, is a “holistic” approach. Firms typically emphasize their goal of getting to know their clients and building a deep understanding of all of their needs so that they can develop more effective strategies for them. This often includes looking at both sides of the balance sheet, assets and liabilities, as well as “softer” situational information. This may also mean delving into family dynamics, planning concerns and other issues that may require effort to uncover.
Too focused on investments
Many organizations admit that they still tend to focus mostly on the investment area of client management. Of the firms surveyed in the PricewaterhouseCoopers’ (PwC) most recent Global Private Banking and Wealth Management Survey, when asked “To what extent do you understand the needs of your clients for the following areas?,” an understanding of “investment objectives” topped the list in terms of understanding “to a great extent.” At the bottom of the list, respondents for the most part said they understood “to some extent” or “limited or not at all”:
• Tax planning and structuring needs
• Extended family issues
• Trust and estate planning fees
Other areas where many organizations felt their knowledge of non-investment client needs was not as strong as an understanding of investment needs include:
• Banking needs
• Overall cash flow needs
• Overall financial planning goals
• Retirement income planning
Walk the walk
It is not enough to state that one has an integrated approach. Organizations must deliver on their value proposition or risk providing clients with a client experience that does not align with their expectations. This can translate into client attrition and loss of credibility, making it difficult to attract new clients.