Wealth managers must focus on pricing, product and people to attract new clients and retain existing clients, according to BNY Mellon subsidiary Pershing.
At one of its practice management programme ‘advisory councils’, the financial services support firm suggested advisers should adjust their propositions and critically analyse the core components of their business.
Mark Tibergien, chief executive and managing director of Pershing Advisor Solutions, encouraged firms to better demonstrate the value of advice by providing clear, competitive charges.
In terms of client base, he urged advisers to think long-term and multi-generational, then in terms of product/service offering, the advice was to provide a holistic service which allows clients to grow with the firm.
“Attracting new talent is vital to unlock new market opportunities, so firms should develop effective recruitment and retention strategies, for example offering flexible working arrangements and professional development through coaching programmes,” Mr Tibergien added.
Speaking to FTAdviser, the firm’s chief relationship officer Ileana Sodani said that recent changes to pension and Isa rules are a huge opportunity for advisers, as a whole raft of new customers who would not have previously met traditional minimum asset entry thresholds are becoming potential clients.
“For many high net worth clients, attitudes to pensions are changing, with many now regarding pensions as tax-efficient legacy assets rather than a retirement vehicle,” she explained, adding that the freedoms will create a new band of middle-tier investors, who may not have required financial advice previously.
“The shape of the market is changing, with a greater proportion of non-inherited wealth and young entrepreneurs typifying the trend. These new types of investors bring new challenges and a thirst for information and data that was not always present in previous generations.”
Research published at the end of July suggested that younger wealth management clients put much more stock in things like robust security processes and the expertise levels on display.
SEI Wealth Platform’s managing director Brett Williams said: “They [under 40s] are typically more information hungry and want to deal with their adviser and investment manager in the same way they do other things in their life; with much more digital and online contact.”
Managing across the generational gap has always been a challenge for advisory businesses, with historically low rates of client retention across ‘inheritance events’, according to Ms Sodani.
“It is very easy to stereotype younger investors as being ‘digitally directed’, but research and experience simply does not support this.
“They may have a desire for more timely and accessible information, but can often prove less self-confident when it comes to committing to significant financial decisions.
“Probably due to a lack of experience, or the significance of the sums involved, younger investors still turn to face-to-face advice when faced with substantial investment choices, and advisers need to be there to support them through this,” she commented.
peter.walker@ft.com
