Nov. 16, 2009
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Advice: Meeting a Potential Client

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Top Ten Things a Private Banker Should Ask

Questions to ask

A potential private banking client should proceed very systematically and unemotionally while selecting a new wealth manager or private banker. The selection should be based on a clear catalogue of criteria that has been drawn up carefully. We have already written about the questions a client should ask a potential wealth manager. But a good private banker is also characterised by his efforts to get a precise understanding of the client's personal situation. It is only in this way that he will be able to draw up a custom made investment proposal.

We believe that only a structured client questionnaire ensures a comprehensive profile. Unfortunately, we have found that only a small minority of private bankers is using structured questionaires or check lists to get a better understanding of their potential private banking client. Some advisers don't even ask any questions at all.

 Therefore we have drawn up a list of ten things a wealth manager or private banker should at minimum ask from a potential private banking client:

  1. Personal situation (profession, children, family, residence)

  2. Financial situation (asset to be invested, real estate, other assets as well as tax issues)

  3. Income situation ( salary and other income)

  4. Risk appetite and investment horizon (objective risk requirements)

  5. Ability to cope with uncertainty (subjective feelings about volatility)

  6. Quantitative objectives of the investment (expected return)

  7. Life goals (Where do you see yourself in 5, 10 and 25 years?)

  8. Desired type of cooperation (advisory or discretionary mandate, also form of communication)

  9. Other requirements (e.g. large payouts that are to be made from the assets, currency preferences)

  10. Source of the assets, tax status

After the meeting the private banker should send the potential private banking client a detailed, written debriefing summarizing the findings of the initial meeting. In our mystery shopping analysis only two banks (out of 20) have taken the effort to send such a summary. We see this as a lost opportunity to show the client how much the potential new bank cares about his situation. We have also developed a more comprehensive test/questionnaire - drawing on the research of behavorial finance and psychology -  to determine the financial personality of a (new) client.

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Advice: Meeting a Potential Client

Top Ten Things a Private Banker Should Ask

  Nov. 16, 2009

Questions to ask

A potential private banking client should proceed very systematically and unemotionally while selecting a new wealth manager or private banker. The selection should be based on a clear catalogue of criteria that has been drawn up carefully. We have already written about the questions a client should ask a potential wealth manager. But a good private banker is also characterised by his efforts to get a precise understanding of the client's personal situation. It is only in this way that he will be able to draw up a custom made investment proposal.

We believe that only a structured client questionnaire ensures a comprehensive profile. Unfortunately, we have found that only a small minority of private bankers is using structured questionaires or check lists to get a better understanding of their potential private banking client. Some advisers don't even ask any questions at all.

 Therefore we have drawn up a list of ten things a wealth manager or private banker should at minimum ask from a potential private banking client:

  1. Personal situation (profession, children, family, residence)

  2. Financial situation (asset to be invested, real estate, other assets as well as tax issues)

  3. Income situation ( salary and other income)

  4. Risk appetite and investment horizon (objective risk requirements)

  5. Ability to cope with uncertainty (subjective feelings about volatility)

  6. Quantitative objectives of the investment (expected return)

  7. Life goals (Where do you see yourself in 5, 10 and 25 years?)

  8. Desired type of cooperation (advisory or discretionary mandate, also form of communication)

  9. Other requirements (e.g. large payouts that are to be made from the assets, currency preferences)

  10. Source of the assets, tax status

After the meeting the private banker should send the potential private banking client a detailed, written debriefing summarizing the findings of the initial meeting. In our mystery shopping analysis only two banks (out of 20) have taken the effort to send such a summary. We see this as a lost opportunity to show the client how much the potential new bank cares about his situation. We have also developed a more comprehensive test/questionnaire - drawing on the research of behavorial finance and psychology -  to determine the financial personality of a (new) client.