A Year Into the Pandemic, What Do Clients Want From Wealth Managers?

Published: April 2021

 

Results from Aon’s Client Experience Syndicated Benchmark survey finds areas where wealth managers are serving their clients’ needs and areas of improvement amidst continued disruption from the pandemic.  

For UK wealth managers, high-net worth clients are highly prized but it is the wealthier client relationships that are most valued. However, studies repeatedly show that this is far from an easy cohort to service. Wealthier clients have complex needs and are often multi-banked, making it challenging to always meet their expectations.  
 
Aon’s Client Experience Syndicated Benchmark, which has been conducted by the firm since 2019 for the U.K. wealth management industry, uncovers the specifics behind what makes the client experience stand out for wealthy clients, putting forward actionable steps that firms can take to drive satisfaction and revenue. In 2020, the benchmark gathered over 8,000 responses from private clients of banks and wealth managers, collectively representing assets under management in excess of £200 billion.

Longevity vs. Loyalty

Our data shows that 39% of wealthier clients – defined within the benchmark as those with at least £3 million in assets – are in the consolidation phase, between the ages of 55 to 64. They are shifting their focus to capital preservation, stress-testing their financial positions and exploring a range of wealth transfer options to assist the next generation. Post-pandemic, these clients are also more likely to continue re-evaluating plans. Their interests are complex and wide-ranging, requiring careful consideration and trusted professional advice.
                                                                                                                          
Most wealthier clients have long-term relationships with their primary providers. Our findings show that over half (54%) have been with their wealth manager for ten years or more. A third, however, started their relationship within the last five years, suggesting that a healthy number are happy to switch or form new relationships.
 
It’s important to also note that Net Promoter Scores (which track willingness to recommend the firm to friends, family and associates) dip with increasing tenure – from 43% among recently-joined wealthier clients, to 36% for those that have been with their main firm for ten years or more. These findings highlight that having many long-lasting client relationships does not necessarily guarantee advocacy.

Mind the Gap

Wealth managers often tout diversification as the guiding principle of sound investment management and risk mitigation. Unsurprisingly, the wealthiest clients are therefore choosing to extend this lesson to their wealth relationships. Our 2020 data shows that wealthier clients work with several providers and as many as 57% spread their assets across several firms.

When asked for feedback on their satisfaction with the overall experience, over a third (35%) of wealthier clients self-categorise as ‘neutral’ for recommending the firm to others in their personal and professional networks.

‘Neutrals’ represent potential precarious ground for wealth managers. With an improved client experience, neutral clients can be lifted into ‘promoters’ to help grow the business via referrals and net new assets. However, if a wealth manager’s response is mismanaged, clients could fall further into ‘detractor’ territory – which has implications beyond assets under management and can affect brand reputation and loyalty.
 
What makes these findings even more stark is that more than one in 10 respondents (or 11%) say they have not had an annual review or financial planning conversation with their wealth manager in the last 12 months. Of the 39% who have had a financial planning conversation, only 54% gave top marks – suggesting firms have further work to do to understand what’s driving these figures.

Review and Revise

All firms understand the importance of delivering a quality experience to their clients across their wealth management journey. This is particularly true in times of uncertainty, when clients are more likely to seek guidance and reassurance from their advisors.
 
Crucially for wealth managers, research confirms that satisfied clients hold more assets with their firm and are more likely to make referrals. And so, since the start of the crisis, firms who have delivered a first-class client experience have been able to leverage their ‘promoters’ and the strength of their relationships as a source of differentiation and revenue generation.
 
However, faced with the knowledge that a sizeable portion of the wealthiest clients are passive about their relationships, wealth managers should take action. They should seek to diagnose the gaps in their client experience, prioritise desired improvements and track progress over time.
 
After a year like 2020, it’s especially important for wealth managers to re-evaluate their most valued client relationships and explore new avenues of growth. This starts with transparency and capitalising on their strong foundations to ask for honest feedback.  
 


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