Sep. 16, 2009
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Wealth: Results of Survey on Top European Private Banks

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Client Inquiry and Proposal Need Structure and Focus

Clients have rather little time for interaction with their potential private banker to make the important decision whom to trust with managing their money. Consequently private banking clients start evaluating their possible new adviser from the first contact on. The professionalism and diligence the private bank shows in the initial contact will leave a lasting impression on the private banking client. 

What we liked overall: Professionalism, questionnaires and clear calls

  • Fast response times: 70% of the surveyed private banks replied to our online request for an appointment within 24 hours and another 10% within two days. A good quota given that in the world of private banking online communication between adviser and private banking client still seems to be rare. However, no light without shadow and in this case real dark one: Two private banks could not be reached online at all. One had a not working web contact form and the other never replied to the mail sent to the provided contact on the website. 

  • Use of questionnaires:  For a targeted proposal the adviser has to get a lot of information out of the private banking client. The client may also not be clear about like his real risk tolerance. Both points are addressed very well if private bankers use a questionnaire. It certainly gives the private banking client the feeling of qualification and being heard. The private bank can assure that the “back-office” has a sufficient amount of comparable data to work out a targeted proposal. Hopefully soon more than four out of twenty private banks support their adviser’s inquiry with such a helpful tool.

  • No waste of time: Almost all private banks (90%) had a clear and time-efficient process to come to a proposal and hand it to the private banking client: High flexibility in setting-up an appointment, a personal meeting of 60 to 90 minutes and then a proposal mailed within a week. However, two private banks made a negative exception, insisting on a second meeting before handing a proposal to the client, hereby delaying the process and create inconvenience to the private banking client. 

What we did not like overall: No inquiry, confusing proposal and jargon

  • No prior research: It seemed that from the twenty private banks we visited only one adviser did prior research on the potential client. A surprisingly low quota in times where a lot of information on almost any individual is only a click away on the internet. It is not just about addressing the client’s vanity. Even more important the adviser misses the chance to easily get additional information upfront. This data would allow him to understand the private banking client better and structure the meeting and inquiry accordingly.

  • No inquiry at all: Hard to believe, but about one-fourth of all visited advisers rather listened to themselves than to their potential private banking clients. Even after our test client offered to give some more information about himself a number of advisers followed up only superficially on this offer. In two cases the adviser “knew” from the first minute how the portfolio of the private banking client should look like. A foresight most likely not caused by magic, but rather sales targets and bonifications for the adviser.  

  • Confusing and incomplete proposals: Only 5 out of 20 private banks received the maximum points for their proposal. These winners distinguished themselves by a clear structure, precise asset allocation and a restriction to the most important information a private banking client should know. However, 75% of the private banks seemed to follow the rule “the more, the better”. They threw so much information at the client that he actually had to search for the essentials. Three private banks did not even provide a detailed proposal, but only the mix of asset classes they suggest. Less than half of the private banks summarized the assumptions about the client’s personal situation on paper. Only eight out of 20 private banks included a price list. Two private banks even required a second meeting before suggesting an asset-mix. 

  • Financial jargon: Most private banking clients are searching for a professional wealth manager because finance and investing is not within their core competence. Nonetheless in almost all visits and proposals we were confronted with financial terms, jargon and calculations most private banking clients are not familiar with. “Back testing”, “Default rates”, “Swaps” and “Covered Calls” are certainly common language in a bank – but mostly not understandable to a client. Only one private bank added a glossary in the appendix, explaining the key terms of their proposal.  

 

My Private Banking



Wealth: Results of Survey on Top European Private Banks

Client Inquiry and Proposal Need Structure and Focus

  Sep. 16, 2009

Clients have rather little time for interaction with their potential private banker to make the important decision whom to trust with managing their money. Consequently private banking clients start evaluating their possible new adviser from the first contact on. The professionalism and diligence the private bank shows in the initial contact will leave a lasting impression on the private banking client. 

What we liked overall: Professionalism, questionnaires and clear calls

  • Fast response times: 70% of the surveyed private banks replied to our online request for an appointment within 24 hours and another 10% within two days. A good quota given that in the world of private banking online communication between adviser and private banking client still seems to be rare. However, no light without shadow and in this case real dark one: Two private banks could not be reached online at all. One had a not working web contact form and the other never replied to the mail sent to the provided contact on the website. 

  • Use of questionnaires:  For a targeted proposal the adviser has to get a lot of information out of the private banking client. The client may also not be clear about like his real risk tolerance. Both points are addressed very well if private bankers use a questionnaire. It certainly gives the private banking client the feeling of qualification and being heard. The private bank can assure that the “back-office” has a sufficient amount of comparable data to work out a targeted proposal. Hopefully soon more than four out of twenty private banks support their adviser’s inquiry with such a helpful tool.

  • No waste of time: Almost all private banks (90%) had a clear and time-efficient process to come to a proposal and hand it to the private banking client: High flexibility in setting-up an appointment, a personal meeting of 60 to 90 minutes and then a proposal mailed within a week. However, two private banks made a negative exception, insisting on a second meeting before handing a proposal to the client, hereby delaying the process and create inconvenience to the private banking client. 

What we did not like overall: No inquiry, confusing proposal and jargon

  • No prior research: It seemed that from the twenty private banks we visited only one adviser did prior research on the potential client. A surprisingly low quota in times where a lot of information on almost any individual is only a click away on the internet. It is not just about addressing the client’s vanity. Even more important the adviser misses the chance to easily get additional information upfront. This data would allow him to understand the private banking client better and structure the meeting and inquiry accordingly.

  • No inquiry at all: Hard to believe, but about one-fourth of all visited advisers rather listened to themselves than to their potential private banking clients. Even after our test client offered to give some more information about himself a number of advisers followed up only superficially on this offer. In two cases the adviser “knew” from the first minute how the portfolio of the private banking client should look like. A foresight most likely not caused by magic, but rather sales targets and bonifications for the adviser.  

  • Confusing and incomplete proposals: Only 5 out of 20 private banks received the maximum points for their proposal. These winners distinguished themselves by a clear structure, precise asset allocation and a restriction to the most important information a private banking client should know. However, 75% of the private banks seemed to follow the rule “the more, the better”. They threw so much information at the client that he actually had to search for the essentials. Three private banks did not even provide a detailed proposal, but only the mix of asset classes they suggest. Less than half of the private banks summarized the assumptions about the client’s personal situation on paper. Only eight out of 20 private banks included a price list. Two private banks even required a second meeting before suggesting an asset-mix. 

  • Financial jargon: Most private banking clients are searching for a professional wealth manager because finance and investing is not within their core competence. Nonetheless in almost all visits and proposals we were confronted with financial terms, jargon and calculations most private banking clients are not familiar with. “Back testing”, “Default rates”, “Swaps” and “Covered Calls” are certainly common language in a bank – but mostly not understandable to a client. Only one private bank added a glossary in the appendix, explaining the key terms of their proposal.