Creating Client-Centric Experiences in Wealth Management


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The customer is king in 2020, of that there is little doubt. The internet has opened a global marketplace for almost every industry where customer choice is no longer limited by geographical proximity.

This means the days are gone where the only retail stores you could shop at were in your local area, the only way of buying a vacation was with your local travel agent, and the only way you could get into asset management was through a local bank or financial advisor. This increased choice means that brands need to put customer centricity to the fore — those that do are on average 60% more profitable than their non-customer centric competitors.

Retail and travel have already cracked the code on customer centricity, but the type of services offered by wealth management professionals can make this a difficult thing to achieve. That's all set to change, however.

Wealth Management Firms Must Work to Understand the Customer

The first step on the road to customer centricity is to discover just who your customer is. In the world of wealth management, it can often feel like regulatory bodies, the management team, or even the CEO are the real customer. However, this is the mindset we are trying to move away from in the switch from investment-centric to customer-centric wealth management.

Messaging is also important. Wealth management firms operating under an investment-centric model will tend to have their investment teams drive the content strategy where the focus is on investment strategies — i.e. on the product being sold rather than the needs of the client. However, with a well-defined customer persona, the focus can change. Why are clients looking to get into asset management? What are their goals? What's their core bond fund? What's their large-cap value fund?

Channels of communication must also be considered. There is little point trying to contact business clients through email, as they will more than likely be engaging with consultants and advisors when it comes to investment decisions, for example.

"Let your situation and goals drive your priorities," said CEO of Sondhelm Partners, Dan Sondhelm. "It depends on your circumstances. If you're a $50B shop, you need new messaging and don't know who your customers are, you might want to start by figuring out who your customers are. But if you're a $500M shop with friends and family money, then you probably want to start with the messaging. It all depends on your overall goals and where you want to be in 5 years. Map out a strategic plan and be disciplined about executing."

Digital Technology Changes How Wealth Management Services are Delivered

Of course, creating a customer-centric wealth management environment in 2020 wouldn't be possible without digital technology.

Technology has long been part of wealth management, but it has been mainly applied to internal processes such as portfolio accounting and management. That is all starting to change. Data-driven robo-advisors are certainly good for grabbing headlines, but we are now seeing digital technology changing what wealth management is, who delivers it, how it is delivered, who it is offered to, and what is included in the service.

Artificial intelligence-powered chatbots are on the rise and are helping investors make smarter decisions regarding where to place their money. Imagine sitting down to breakfast and receiving a reminder that you were going to investigate a certain opportunity? You can then fire up a chatbot and ask it what impact the potential investment would have on your portfolio. Chatbots can also inform you of emerging geopolitical events and the effect they could have on your finances.

In short, communication technology allows clients access to deeper and more meaningful interactions with their portfolios, where and when they wish.

Technology is also helping wealth management better understand its customers and therefore better serve them. We live in an age of unprecedented data. Information is everywhere, waiting to be used to create sophisticated customer personas. Data-driven wealth management firms can then then use personas to deliver personalized services, products, and pricing, based on individual profiles.

Final Thoughts

"The core to leveraging technology is to build services on top of a consistent and standardized layer of client data and associated content," said Global Head of Digital Solutions at Refinitiv, Christopher Sparke. "Institutions are looking to use technology and AI to support a more sophisticated or bespoke 'next best action' or 'recommendation engine' that factors suitability and other compliance and risk standards. Advanced analytics must sit on top of a sophisticated enterprise data management solution. This can accelerate solutions that offer customizable experiences and provide real value to customers."

Client centricity is set to be a hot topic at Digital Wealth 2020, taking place in May at The Ritz-Carlton Fort Lauderdale, FL.

Download the agenda today for more information and insights.

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