Customer retention in wealth management 2009

CATALYST 2
SUMMARY 2
ANALYSIS 3
Customer retention is a key strategic issue in the wealth management business today 3
Customer retention needs to be a defined business strategy 3
There are differing risks associated with HNWs leaving their wealth manager to manage their own money or to find another wealth manager 4
Wealth managers need to get to know their customers in order to improve retention 7
Wealth management service implication: HNWs are a diverse group and 'one size will not fit all' 8
Wealth managers need to understand the determinants of HNWs' choice of provider 8
Features of the wealth management firm outside of service most influence HNWs' choice of provider in both Europe and APAC 9
European wealth managers need to focus on the financial stability of the company 10
Wealth management service implication: Actively raise with clients their concerns about financial stability 10
A country specific analysis shows that Europe has a significant variation in choice of provider determinants 11
APAC wealth managers need to concentrate on raising the brand, image and reputation of their firm in the minds of HNW clients 12
A country specific analysis shows that there is a marked variation in choice of provider determinants 13
Wealth management service implication: Wealth managers can proactively enhance their level of personal service to help the image of the firm 15
Brand equity is important for the retention of customers in wealth management 16
Although the reputation of a firm dominates investors' concerns, service aspects of the wealth management business are also important to HNW clients 16
Wealth management service implication: Wealth managers should aim to raise the bar and educate clients more about investment matters 17
Innovative example from Switzerland: UBS is investing in educating its clients 17
In both Europe and APAC, wealth managers should be careful to give correct analysis and insight to retain their HNW clients 18
In the downturn, wealth managers know that they need to not make errors to retain their HNW clients 18
In both Europe and APAC, several points of client contact within the bank is also important to retain customers, as is resolving issues efficiently 19
Wealth management service implication: wealth managers can deliver superior returns by broadening their clients' horizons and holdings 23
Innovative example from the UK: HSBC hosts emerging markets investment seminar for its Premier customers 24
HNW clients are concerned about their portfolio performance 24
Wealth managers need to maintain frequent contact with their clients as they steer them towards new investment opportunities 28
Telephone contact is maintained more frequently in APAC than in Europe 28
Face to face contact is also maintained more frequently in APAC than in Europe 32
Wealth managers need to be innovative in their contact with clients to build a strong working relationship 36
To effectively retain clients, wealth managers need to really get to know their clients 36
There are regulatory requirements that necessitate wealth managers getting to know their clients 36
Getting to know clients goes beyond capture of data to support regulatory requirements 37
Innovative examples from around the globe where wealth managers create special events to get to know their clients better 39
The Private Banking and Wealth Management Australia conference 40
The Glenmede Trust uses common interests to bring current and potential clients together 41
APPENDIX 42
Methodology 42
Wealth Management Market Leaders Survey 2009 42
Bibliography 42
Further reading 42
Ask the analyst 43
Datamonitor consulting 44
Disclaimer 44
List of Tables
Table 1: Please rate your high net worth clients' characteristics 7
Table 2: What will determine HNWs' choice of wealth management service over the next 2 years? 15
Table 3: What is the best way to retain HNW clients today? 23
Table 4: When you speak with your HNW clients, what do they most want to discuss? 28
Table 5: How frequently on average do you have telephone contact with your HNW clients? 32
Table 6: How frequently on average do you have face to face contact with your HNW clients? 36
List of Figures
Figure 1: HNWs in APAC are more likely to leave their wealth manager to manage their own money 4
Figure 2: In Europe, German HNWs are most likely to leave to find another wealth manager and least likely to leave to manage their money on their own 5
Figure 3: In APAC, Hong Kong HNWs are most likely to leave their wealth manager to manage their money on their own and least likely to leave to find another wealth manager 6
Figure 4: Features of the wealth management firm external to service most influence HNWs' choice of provider in both Europe and APAC 9
Figure 5: In Europe, the financial stability of the company is the most important determinant of HNWs' choice of wealth manager 12
Figure 6: In Asia Pacific, the brand, image and reputation of the firm is the most important determinant of HNWs' choice of wealth manager 14
Figure 7: In both Europe and APAC, wealth managers should be careful to give correct analysis and insight to best retain HNW clients 20
Figure 8: Wealth managers in Europe need to ensure that they do not make errors in order to retain HNW clients 21
Figure 9: Wealth managers in APAC need to ensure that they resolve client problems as efficiently as possible 22
Figure 10: HNWs in Europe and Asia wish to talk with their wealth managers about portfolio performance 25
Figure 11: European HNWs are concerned about the performance of their portfolios and anxious about the future 26
Figure 12: HNW investors in APAC are concerned with the performance of their portfolios but are also looking for investment opportunities in the current market 27
Figure 13: Wealth managers in APAC are more likely to have weekly telephone contact with their HNW clients than their European counterparts 29
Figure 14: Wealth managers in Germany, Italy and France lead the way in Europe for weekly telephone contact with their HNW clients 30
Figure 15: Wealth managers in India, Hong Kong and Australia are more likely to have weekly telephone contact with their HNW clients than wealth managers in other APAC countries 31
Figure 16: Wealth managers in APAC are more likely to meet with their HNW clients on a monthly basis than is the case for their European counterparts 33
Figure 17: Quarterly meetings between wealth managers and HNW clients are most likely in Europe 34
Figure 18: APAC is divided between monthly and quarterly meetings between wealth managers and HNW clients 35