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Capco: Wealth Managers Need to Reassert their Value to Clients to Win Back their Trust

Robert Akam or Joe Eldridge 020 7400 4480 or email or
Leading financial services consultancy identifies the key challenges facing the wealth management industry

Capco, the global business and technology consultancy dedicated solely to the financial services industry, has identified the key challenges facing wealth managers and how they need to address them. Although no area of banking was spared the volatility of the financial crisis, wealth managers faced the unique challenge of having personal relationships as the main driver of their business.

A growing body of evidence suggests that clients are increasingly willing to leave their trusted adviser in favour of managing their own affairs. The challenge facing wealth managers is two fold: firstly, to reassert their value to clients and secondly, to reaffirm their clients’ trust in them.

Christine Mar Ciriani, Capco Partner, European Head of Wealth & Investment Management, says:

“This loss of assets under management has put an upwards cost pressure on wealth management firms. Combined with the increase in the cost of regulatory compliance, wealth managers have had to rapidly assess the appropriateness of their operating models. Meanwhile, they have had to focus on improving the client experience by equipping the front office with the most effective tools to regain client trust. In order to retain and increase assets, wealth management firms have also had to demonstrate an impartial, non-product led service.

“Wealth managers need to address the following six issues if they are to succeed in this challenging market environment:

  1. Regain client assets
    With clients seeking impartial, non-product led service, firms need to position themselves as the ‘Trusted Adviser’ in order to regain client assets. With client relationships at the heart of their business, the right relationship management tools are needed to assist the front-office drive for growth.
  2. Segmentation strategy that defines the proposition
    Firms need to implement a clear segmentation strategy that aligns the client type to the right service offering, operational priority and relationship manager. Recently, boutique banks have won favour with their emphasis on client relationships over products, while well-organised banks are also gaining back lost ground by re-formulating their distribution channels and service offerings to be able to cater to different segments profitably.
  3. Redefine service offering
    Although an appetite for higher risk solutions is returning, many clients are seeking straightforward and transparent solutions that meet their needs and offer at least a degree of capital protection. Banks must therefore remain proactive in designing and proposing investment solutions that correspond to clients’ risk profiles and also respond to their financial planning needs and objectives. Client reporting must also be effective, not only to meet regulatory requirements, but to satisfy client requirements for information.
  4. Reduce operating costs and increase organisational efficiency
    Increased financial pressure on firms means their organisational structure must offer a high quality, functional architecture that meets industry demands, thereby boosting client penetration and enhancing client experience, while providing long term value at the same time. Wealth managers also need to maintain an effective middle and back office function to service support, and for client reporting custody and process automation function, which also enhance the client experience.
  5. Implement IT solutions to deliver first class client service
    Firms need to make sure they implement leading edge IT solutions. Whether or not to implement models from third-party vendors or those developed in-house depends on a firm’s business requirements. Technology is also enabling a new style of client interaction with firms increasingly investing in mobile technology to enhance the user experience. Firms are already reviewing the use of tablet technology to enhance client experience and for firms to improve acquisition, retention and cross-selling opportunities.
  6. Adapting to regulatory changes
    Increased regulation, such as the incoming Retail Distribution Review (RDR) in the UK, will radically alter front office distribution of advice through far reaching changes in the way that clients are managed and investment advisory is compensated. Furthermore, commission-based investment advisory is also coming under scrutiny of regulators across Europe because of RDR. Operating models must reflect this and relevant changes must be made ahead of the regulatory intake deadlines.”

About Capco
Capco, a global business and technology consultancy dedicated solely to the financial services industry. Our professionals combine innovative thinking with our unrivalled first-hand industry knowledge to offer our clients consulting expertise, complex technology and package integration, and managed services to move their organisations forward.

Through our collaborative and efficient approach, we help our clients successfully increase revenue, manage risk and regulatory change, reduce costs and enhance control. We specialise in banking; capital markets; wealth and investment management; finance, risk & compliance; and technology. We serve our clients from offices in leading financial centres across North America and Europe. To learn more, visit our web site at

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