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WEALTH MANAGERS CAPTURE LARGER SHARE OF CLIENT WEALTH

LONDON – According to a study released by SEI (NASDAQ: SEIC), NPG Wealth Management, and Scorpio
Partnership, the world’s millionaires increase assets held at a wealth manager by 18% over a 20 year relationship.

The research, entitled The Futurewealth Report 2014: Enhancing the customer service curriculum, is the third paper in a four-part series on the wealth management customer experience. The paper explores the ongoing service factors provided by wealth managers and the growth of the relationship for 3,025 of the global wealthy with an average worth of USD2.9 million.

The paper finds that HNWs who have been with their main financial provider for five years have just 42% of their investable wealth with a firm and would not consider consolidating more than 45% with a single wealth manager. However, as the relationship length increases, so does the openness to increasing assets at a preferred provider. By the time the relationship has reached 20 years, HNWs have 60% of their wealth with a single provider [Figure 1].

“The commercial reward for wealth managers who maintain a consistent ongoing relationship with their client is very real so long as they continue to meet client expectations,” added Sebastian Dovey, Managing Partner of Scorpio Partnership. “These findings highlight why wealth managers need a clear picture of their customer experience. It is crucial to future growth.”

Figure 1: Percentage of investable assets held by the primary wealth advisor and the percentage of investable assets that the Futurewealthy would consider consolidating with a financial provider

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CUSTOMERS DELIGHTED BY FUNCTIONAL ASPECTS OF WEALTH MANAGEMENT RELATIONSHIP BUT AFTERCARE IS DISAPPOINTING

The research also examines the most valued factors to the Futurewealthy during an on-going relationship with a financial provider. The most important element of their experience is client-focus which received an importance score of 65 out of 100. To support this, the global wealthy want to learn as much as possible from their professional partner with access to regular communication, information and engagement.

Marc Stevens, CEO of NPG Wealth Management commented “At NPG, we provide wealth management solutions through life assurance which means we have a vested interest in the longevity of our clients. The research shows that listening and understanding every client is integral for generating relationships that last.”

“With this phase of research, we’ve examined what it takes to keep high-net-worth clients engaged and happy with their wealth managers. While we’ve found that investors are split as to why they remain with their firm, we’ve also found that this group is comprised of voracious financial learners,” said Alfred P. West, Jr., Chairman and Chief Executive Officer of SEI.

Broadly, HNWs feel that their wealth managers are performing well when it comes to the ongoing relationship. On average, they give an index score of 78 out of 100 for both client-centricity and statements and reporting [Figure 2]. This rises to 89 among respondents from the Americas who are consistently vocal about their firm’s credentials when it comes to communication, information and customer focus.

To graduate to the next level of customer service, these confident consumers feel that their money managers could do a little more to reward them for their continued custom. Loyalty schemes are given performance index scores of below 9 and invitations to financial and lifestyle events scores of below 19. Europe’s wealthy are particularly negative about their providers’ ability to deliver on aftercare.

By contrast, those in Asia Pacific feel that their wealth advisors are doing slightly better when it comes to all the little extras that enhance the relationship. And yet it appears that this may have come at a cost of true customer focus and communication, which receive performance index marks of 71 and 63 respectively.

Figure 2: Performance of different factors in delivering a great experience during relationship with a wealth manager

graph5

For more information please contact:

Sebastian Dovey
Managing Partner
Scorpio Partnership
T: +44 20 7811 0120
E: seb@scorpiopartnership.com

Catherine Tillotson
Managing Partner
Scorpio Partnership
T: +44 20 7811 0120
E: cath@scorpiopartnership.com

Dana Grosser
SEI
T: +1 610 676 2459
E: dgrosser@seic.com

Monique Vaclavek
Head of Marketing & Communication
NPG Wealth Management
T: +352 45 67 30 4345
E: Monique.vaclavek@npgwm.com

Nadège Bellevaux
Marketing and Communication, Senior Associate
T: +352 45 67 30 4989
E: nadege.bellevaux@npgwm.com

 

Notes

1. In total, 3,025 individuals took part in this fifth global poll of the Futurewealthy. The average level of wealth among these individuals was USD2.9 million.

2. Geographically, 47% of the sample group live in Asia Pacific, 34% live in the Americas, 14% live in Europe and 5% live in other countries around the world.

3. The research covered four different phases in the wealth management relationship, the first of which has been included in this paper:

• The search for a wealth management
• Important attributes when carrying out a transaction
• Reasons for staying with a wealth manager
• Referrals and recommendations in the wealth management relationship

4. The research was conducted using an online survey. Participants were identified using profiling techniques to determine their likelihood of qualifying as Futurewealthy candidates. They were contacted directly by email.

5. The research was conducted by Scorpio Partnership in collaboration with NPG Wealth Management, and SEI.

6. Scorpio Partnership is a pioneer in the art of translating the complex needs of wealthy clients into practical, innovative and profitable solutions to target these customers. This award-winning firm has surveyed over 30,000 millionaires and billionaires worldwide to collect opinions on what they will need next. With this knowledge, the firm has implemented strategic research, practical consulting and business innovation projects in over 35 countries. Scorpio Partnership is part of McLagan, an AON Hewitt Company.

7. NPG Wealth Management is a leading provider of European cross-border life assurance solutions standing for excellence, transparency and compliance in the (Ultra) High Net Worth and High Affluent business. NPG Wealth Management’s operations are based in Luxembourg, Ireland, Gibraltar and Bermuda. From these 4 jurisdictions, the Group provides compliant wealth management solutions with active presence across 11 core Pan-European markets. Over the years, NPG  Wealth Management has built a solid reputation of service excellence with its insurance intermediaries and clients with in excess of 5 billion euros of assets under management. For more information, visit www.npgwm.com

8. SEI (NASDAQ:SEIC) is a leading global provider of investment processing, fund processing, and investment management business outsourcing solutions that help corporations, financial institutions, financial advisors, and ultra-high-net-worth families create and manage wealth. As of December 31, 2013, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages or administers $559 billion in mutual fund and pooled or separately managed assets, including $232 billion in assets under management and $327 billion in client assets under administration. For more information, visit www.seic.com.

In 2014, what was the average cost income ratio across the international wealth management and private banking industry?