Private Asset Management

By Kate Willis

As a professional qualitative research consultancy, the client is at the heart of our world and our business.

Whatever research we conduct, we want to know exactly how our client’s audience thinks and feel about the service/product our client’s business provides, the image it projects and the way in which both are communicated and marketed to build that business.

And what of private banks?

Over-regulation, punitive taxation, lack of trust in wealth management advisors and the economic downturn have all played their parts in the UK’s dramatic fall from grace as the world’s number 1 financial centre. But maybe, just maybe, finding out what private banking clients think, through intelligent, independent client research, and translating this into a customer-centric philosophy at the core of the business might have helped, too, as was suggested in the course of the highly prestigious PAM (Private Asset Management) Awards evening last month.

From the PAM Awards results, it is clear that Close Brothers know a thing or two about their clients. To widespread acclamation from the judging panel, Close Brothers appear to have focussed their attention firmly on their clients, both in their newly launched, dedicated HNW website (Close Brothers Bespoke) and in the independent client research they commissioned to help develop this and other services.

The result? Winning two top PAM prizes, both heavily linked to the needs of their HNW base: the first for Client Service Quality in the High Net Worth sector; and the second, for Quality and Clarity of Reporting.

Private banks are not known historically for spending much time thinking about their clients: their focus has been on maintaining or building assets, sometimes to the cost of investment performance and often to the detriment of good client service. Post RDR, occupying a very different world, they (and their clients) face a whole new range of business, service and charging challenges. How are their clients reacting to these changes? To what extent do they understand why such changes have been introduced? And what are private banks doing to understand, support and secure their potentially rattled clients and grab the opportunities to demonstrate that they care about that client’s business?

The answer is probably not enough

For example, can such banks answer the following questions?

What do their clients see as the benefit of the different services available? How would their clients ideally like to manage their finances: through good dedicated manager/client relationships or/and via the internet, Smartphone and/or apps? Where do clients stand on payment? What are they prepared to pay, for example, for full discretionary as opposed to advisory service?

In an effort to navigate the minefield that additional regulatory restraints and the post-apocalyptic downturn in world economies has shaped, a more personal and targeted service sounds an attractive proposition…but how credible is this from service providers who know little of HNWs’ attitudes and needs? Providers who have little idea how to divide their client base into meaningful psychographic and marketable segments based on attitudes, behaviour and lifestyles rather than on (the less telling) sums of assets held under management?

It is also time to eschew some of the more traditional brand values that typify the sector: polished-wood board rooms, elegantly suited managers and a palpable sense of heritage and affluence.

Much-needed in the private banking space are differentiated brands based on robust, relevant and consistent brand propositions borne out of real client needs. Huge opportunities await those private banks prepared to develop effective business models through expert qualitative research, potentially consisting of segmented service offerings, improved operational and staffing policies, cohesive product strategies - all delivered via aligned communications - to secure their future and their brand. With clients increasingly demanding more for less and cost to income ratio rising, HNWs are still not receiving the premium service they seek or deserve. Surely, customer retention through perceptive insights and real understanding of HNW needs is now a priority?