Clients in wealth management – independent of the wealth segment – do have a preference for bespoke service, individually tailored to their needs. However, the willingness to pay for these services is diverse and in most markets decreasing.

Meanwhile, the costs of offering a bespoke service via a traditional relationship manager-led advisory process are increasing, especially due to regulatory changes as well – in some markets – a shortage of talent. But also in the top segment, clients ask for a level of interaction and high-quality self-services, which is not possible to achieve via an RM. This is even the case for clients with discretionary mandates.

Personalisation via technology

We are convinced that the RM will still play an important role in the future to manage the client relationship from a strategic perspective and do quality control at key points in a client relationship.

However, we think that technology will enable to offer a great, personalized service to clients. This will eventually also increase the pricing power of the bank or at least reduce price pressure. Key is that a digital offering does not mean standardization. It`s about engaging the client on a personal level, it’s about delivering additional client value while not incurring additional costs in doing so.

It is also possible to attack new client segments. For example, in most markets, private banks have started to more strictly execute ‘minimum wealth volumes’, existing clients who do not meet the minimum volume criteria.

While positive for a short term bottom line, there are risks involved: For example, a sizable part of the exited clients might be the next generation of clients.

Win next-generation clients

In developed wealth markets, wealth management is mainly a business with elderly clients with a median client age of around 70. A few years ago, few of these clients asked for an attractive offering, especially not in the offshore business. Traditional handling of the next generation of clients, especially wealth successors, was simple: Offer a broken-down service around the RM and add a few events aimed at a younger client base. Digital offerings did not really play a relevant role.

However, in today`s market, the existing client base asks for attractive digital tools and instruments. And the next generation of clients – both the wealth successors of the existing clients and new clients – asks for the same level of digital proficiency (ease of use, transparency, seamless omnichannel offering) they experience with non-banking offerings. It is imperative to show the next generation of clients that the wealth manager can provide these offerings before the wealth is passed on to them.

Again, technology is an opportunity. It helps to serve these clients with low marginal costs while offering an individualized client experience.

How additiv might help you

Additiv offers modular, omnichannel services which cater to the needs of all client segments in wealth management. The offering is omnichannel, empowering the RM while offering also self-service functionalities.

We offer a SaaS model, which takes into account the number of clients and relationship managers. It can be combined with the existing core banking system as well as the existing custodian system, meaning that implementation risk is minimized. Our offering is affordable for small and mid-sized players and can be implemented within a short time frame.

Original article published in Private Banker International.