Beyond the numbers: how wealth managers are adapting

It’s no secret that it’s getting tougher and tougher for wealth managers. While the sector should experience healthy growth in the years to come – mostly due to there being more high-net-worth individuals than ever before – some significant challenges are emerging.

Growing client needs, elevated shareholder expectations, stricter new regulations and breakthroughs in technology all mean that wealth managers are increasingly having to offer more for less. But there are opportunities too: Those who can stay ahead of such shifts and offer a holistic model for clients should be able to gain market share.

‘We have an obsessive focus on clients,’ says Carol Schleif, deputy chief investment officer of Abbot Downing, the ultra-high-net-worth wealth management arm of Wells Fargo. ‘It’s about weighing up what’s best for a particular client’s situation, in consideration of their entire picture. Everyone says this, but to make it happen it needs to be a part of your DNA. We have multiple levels of relationship reviews, so we always know that the service and investments at any given time are appropriate.’

Andrej Lippay, a portfolio manager at Corpia Asset Management, a private wealth boutique based in Dubai, is similarly steadfast in his commitment to clients and client outcomes. ‘Excellence is a product of several steps put together. From an asset management point of view, this means prudent analysis of clients’ needs, risk and return expectations, portfolio construction, execution of the strategy, and rebalancing as needed,’ he explains. ‘More than that, though, we have to update our clients regularly, responding to their queries and needs in a timely manner.’

Increasingly, wealth managers are rolling out services that well go beyond traditional asset management and client reporting. That can mean better digital offerings, more voluntary client contact or even innovative financial strategies – all of are being used to create a more holistic approach.

‘We like to differentiate ourselves by presenting a full suite of offerings,’ Schleif says. ‘Financial planning and banking are staples, of course. Any wealth manager should offer this. But we also have other services as part of our Institute for Family Culture, such as family governance, business succession planning, family dynamics and even impact. These aren’t things we outsource.’

The Institute for Family Culture, launched in March 2018, is a kind of academic center and think tank designed to increase focus on succession planning and philanthropic goals. Aimed at addressing the burgeoning interest in high-impact philanthropy in the US, the center is also able to attract a new generation of clients too.

Over the next four decades, for instance, millennials and Gen X will inherent some $60 trillion in assets. And surveys show almost half of this wealth will be allocated to charitable causes, ushering in a ‘golden age of giving,’ according to a recent book by Sharna Goldseker and Michael Moody.

‘It’s all about working with clients to address their goals when it comes to philanthropy, investments, entrepreneurship and social networks,’ Schleif adds. ‘It goes well beyond investment and asset management. That’s how we differentiate ourselves, although others are following our example.’

Corpia’s approach, meanwhile, includes a range of family office and concierge offerings. In addition to traditional asset management, banking, family governance, and estate and tax planning, family office clients are treated to plush travel and accommodation. Last-minute restaurant reservations and customized travel itineraries are popular, according to Lippay, as well as help when it comes to finding private schools and tutoring.

Putting on such an extensive offering isn’t easy, though, and wealth management firms are have put a greater emphasis on attracting – and maintaining – top talent as a result. That means offering their employees, as well as clients, attractive packages and opportunities.

‘You need good people who can execute your strategies. So we seek people who are technically skilled and have the ability to interact and connect with clients and partners,’ Schleif explains. ‘It’s a high bar, but there’s a big focus on career paths, development and mentoring. That allows us not only to hire, but also to retain and grow. We give them the opportunity to discover and use their talents.’

Lippay agreed that it’s not just about salaries when it comes to finding the right talent. ‘Besides interesting financial incentives, we focus on work/life balance, more time off and access to healthcare and other benefits,’ he said. ‘Money isn’t everything, although it’s an important part of the deal. Employees want to have a purpose and feel like a valued member of the team. That’s very important when it comes to talent retention.’