The report reveals that both wealth managers and investors agree that objectivity focusing on clients’ needs first is the most important than the investment management process or the delivery of products and services.
When asked how they define the Objectivity, both groups ranked wealth managers’ ‘understanding the situation and needs’ of their clients as the top definition, chosen by 39% and 31% of wealth managers.
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The research also states that wealth managers struggle to demonstrate objectivity in the delivery of their services.
SEI said that the new global report examines clients’ expectations about objectivity and how wealth managers deliver and incorporate objectivity into their investment processes, product selection, and client relationships.
For investors, a client-centric approach is often the difference between a positive and a negative experience with a wealth manager.
The report noted that wealth managers are yet to successfully find a way to demonstrate objectivity in the delivery of their services and, consequently, have yet to satisfy this client expectation.
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By GlobalDataThe report said that when asked how they would deliver objectivity in their wealth management offering, responses shifted away from client-focused strategies and back to the comfort zone of services and product selection, activities which have no true bearing on investors’ definition of objectivity.
The SEI added that only three North American firms surveyed mentioned in-depth investor risk profiling as a strategy to delivering objectivity, a strategy commonly acknowledged as essential in ensuring that investors’ needs are understood.
SEI Global Wealth Services senior vice president Jim Morris said that although independence has been an industry buzzword for some time now, objectivity is emerging as an equally important topic.
"Whereas independence is more closely related to ownership and conflicts of interest, objectivity is associated with advice, which is at the heart of what wealth managers provide to their clients.
"By being more client-centric and placing clients’ goals and objectives at the forefront of the investment process, wealth managers will not only survive in this industry, but thrive in the face of growing competition and industry challenges," Morris said.
Objectivity and the Client Experience is the third paper in a series of five topic of interest papers exploring the changing relationships between wealth managers and clients.
The findings are the result of interviews comparing the views of 250 private clients and wealth management providers, including banks, independent trust companies, and investment advisors.
