Wealth management battle intensifies
In an increasingly competitive landscape, wealth managers are facing the possibility of losing clients to rivals unless they improve in several key areas. Shahnaz Mahmud reports.
This article appears courtesy of Global Investor.
THE OLD adage of "you do best what you best like to do" is particularly apt for wealth management. This market segment is seen as one of the most attractive, with wealth managers expecting higher revenues and profits. But some managers show clear areas of weakness, particularly in client relationship management and risk management.
A recent report from PriceWaterhouseCoopers, Global Private Banking/Wealth Management 2005, suggested that wealth managers should focus on their areas of strength, while outsourcing more in specialist investment and advisory areas. "The battle is for revenue," says Bruce Weatherill, partner, private banking, at PWC and author of the report. "How do you keep your existing business, deepen wallet-share and gain new clients?" It's a back to basics mentality with focus being the core element of successful wealth managers. In order to retain existing clients while gaining new ones, managers must deliver on their promises, says Weatherill.
This concentration on areas of strength is in line with an industry trend, whereby firms are choosing to be either manufacturers or distributors. In the report, a sizeable number of CEOs pointed to the "producer model" as a primary or secondary area of focus.