QUALITY OF SERVICE IN WEALTH MANAGEMENT:
MAKING THE RELATIONSHIP COUNT

QUALITY OF SERVICE IN WEALTH MANAGEMENT: MAKING THE RELATIONSHIP COUNT

PUBLISHED: 2 October 2019

LONDON, October 2, 2019 – Successful wealth managers will be those who keep client relationships at the heart of their thinking and view digital innovation as an enabler rather than a silver bullet, according to a new report from Capco, the leading technology and management consultancy dedicated to the financial services industry.

Amongst its findings, the report – Quality of Service in Wealth Management: Making the Relationship Count – contests various pieces of received wisdom about the industry:

• Clients don’t change providers as often as previously thought even when a ‘star’ manager departs – suggesting the relationship dynamic is more complex than might be assumed;
• Investment performance is cited as the primary reason to choose a wealth manager, but in reality, the data shows that attrition is usually the result of an administrative error;
• Firms who combine the relationship management and investment management functions only marginal gains in terms of cost-effectiveness, the benefit is not significant – speaking to the primacy of the relationship component.

Touching on topics such as front office efficiency, investment performance, building differentiation and the power of brand equity, the report goes on to identify steps that firms should take to keep their business commercially strong and ready to respond to unexpected competition and market trends.

Richard Lewis, Partner and UK Head of Wealth & Asset Management at Capco, said:

“When it comes to moving the wealth sector forward, the position of incumbent firms is very defensible. It is about how they can use technology to optimize, rather than tear up, their existing offerings. There is a sense that the primacy of the relationship is being lost in the rush to digital. Firms are recognizing that relationships need to be enabled and augmented rather than replaced. There will be disruption certainly, but ultimately the potential of digital transformation lies in finding new ways to strengthen relationships and giving managers the tools they need for that task.

“The successful application of digital is keeping the human at the centre of the equation. It is about celebrating relationships. The US market leads in robo penetration, but robo has still won only two to three per cent of assets and that share is already declining. It demonstrates that while automation has clear applications and can have a meaningful impact, it need not be applied to the ‘last mile’ of the client conversation. Face-to-face interactions between clients and their advisors, whether virtual or in person, will remain a critical facet of doing business.”

Drawing on data from benchmarking and research firm Compeer, the report is based on a survey of more than 1,000 wealth clients and a series of workshops conducted earlier this year with UK wealth management companies collectively responsible for over £150 billion of private client assets.

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Notes for editors:

Capco is a global technology and management consultancy dedicated to the financial services industry. Our professionals combine innovative thinking with unrivalled industry knowledge to offer our clients consulting expertise, complex technology and package integration, transformation delivery and managed services to move their organizations forward. Through our collaborative and efficient approach, we help our clients successfully innovate, increase revenue, manage risk and regulatory change, reduce costs, and enhance controls. We specialize primarily in banking, capital markets, wealth and asset management and insurance. We also have an energy consulting practice in the US. We serve our clients from offices in leading financial centers across the Americas, Europe, and Asia Pacific. To learn more, visit our web site at www.capco.com, or follow us on Twitter, Facebook, YouTube, LinkedIn and Instagram.