If choice is the modern mantra, most wealth managers do not seem to be intoning it.
If choice is the modern mantra, most wealth managers do not seem to be intoning it. Instead of grading customers by wealth, the easiest delineator, they ought to individualise, specialise, slice, dice and dissect: the future is specific.
According to a new report from Scorpio Partnership and SEI, who have been providing wealth management solutions since 1968, we need to be trying ‘segmentation trigonometry’: a young footballer on millions for a few seasons is different from pensionable second-generation land-owning wealth, the chairman of UBS is unlike one of his most junior employees. Risk and timescale are factors which tend to be ignored.
The obvious problem here is that businesses which offer one-model-fits-all packages may be shown up as soon as one person demands, well, personalised treatment. The obvious opportunity is for firms to start occupying niches, possibly even collecting themselves into alliances so that clients don’t need to be turned away, rather passed around.
The SEI/Scorpio report is clear that not everyone will be able to adapt: if the wealth management sector itself can be split into eight areas, those who are nimble and prepared to admit their vulnerability (which is in fact a strength, specialisation) will thrive. Independent Wealth Advisers (up-market IFAs) can more easily focus than a universal private bank. Multi-family offices (the sort set up by families rather than for families) have an inherent focus.
Sebastian Dovey, managing partner at Scorpio, says that businesses “have to realise they can’t serve everyone with this all-singing, all-dancing business model. There’s a huge range of needs, and we’re moving into an era of client power.” Divide and conquer indeed.