Information Balancing Act

In the wake of recent revelations on NSA programs, surveys suggest that the American public is conflicted about the government collecting so much personal information. Many citizens find it invasive, but they don’t want to risk hindering the government’s efforts to protect them either.

In general, people are comfortable with sharing personal information if they trust that those with whom they are sharing will use it to benefit them.

That holds true for financial organizations as much as the U.S. government.

This is an important lesson for wealth managers to understand, particularly those that provide a broad banking, investment management and trust platform. These managers have an abundance of information about their clients, from financial product preferences to risk tolerance, personal goals and plans, balance sheets, ATM usage, savings and payment behaviors, credit card practices and so on.

With a robust CRM system and intelligent marketing programs, this information can be used to better meet client needs through more precisely targeted and timed offers, assistance and recommendations (think of Amazon suggesting books which may be of interest to you based on your previous reading consumption). Such a well-designed and client-centric effort will build trust and deepen relationships.

On the other hand, misuse of personal information to bombard clients with unwanted messages and promotions can be perceived as invasive and possibly even a serious breach of trust, which can prove potentially fatal to the relationship. As wealth managers move forward in this area, it will require a delicate balancing act to fully leverage marketing opportunities while insuring that their client’s best interests are served and confidentiality is not compromised.