Only 19% of HNW clients would pursue their relationship manager (RM) if they moved to a different wealth management firm, according to a report by Scorpio Partnership, NPG Wealth Management and SEI.
The results from the paper, Futurewealth 2015: The art and science of relationship management, indicate that HNWIs are biased towards firms rather than RMs.
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Of the 3,113 wealthy individuals who were surveyed, 62% said that they would choose to stay with their existing firm, whilst 17% would consider following their RM to a new firm but would keep their options open.
The staying power was strongest in Europe where 69% of clients said they would remain with their organisations and weakest was in the Americas (56%).
Although firms appear to have an advantage in the balance of power, RMs who were rated as ‘very good’ by their clients attained greater levels of loyalty. The report reveals that there was almost a 50:50 chance of HNWIs following their RMs in these instances.
Sebastian Dovey, managing partner at Scorpio Partnership, said: "Clients recognise that it is typically more than just the banker. However, it is a fine balancing act between the banker and the bank. Notably, for bankers with higher satisfaction rating scores, the appeal of following the banker is still a relatively strong option among clients."
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By GlobalDataGeographical differences
According to the report, the area for improvement is collaboration between the relationship manager and firm to provide access to the information and guidance needed to make informed investment decisions. Almost half of the HNWIs felt that this was amiss, rising to 51% of clients in Asia Pacific.
Geographically, 36% of the report’s sample group live in Asia Pacific, 46% live in the Americas and 17% live in Europe.
For 59% of HNWs, it is the direct responsibility of the relationship manager to improve their financial situation. For a further 42% and 37% respectively, the principal activity is to provide investment education and deliver market updates.
Cultural nuances mean that this strategic role is accentuated in certain regions. The report finds that, in the Americas, 42% of wealthy clients believe that the relationship manager should create their financial strategy. In Europe, where mentoring is more core to the function, this is lower at 30%. In Asia Pacific, there is more focus on receiving market updates.
Marc Stevens, CEO at NPG Wealth Management, said that HNWIs hold their RMs "directly responsible for their wealth creation efforts."
He added, "It is therefore crucial that wealth management firms can support front line staff with the resources and insight they need on a broad variety of products and services."
