By: Joe Gillen
Many banks and credit unions are developing products and services that appeal to ultra-wealthy individuals, and new research shows that this trend is largely welcomed by this demographic.
While ultra-wealthy individuals may have a sizable amount of discretionary income, a large number report feeling isolated and alone when it comes to making decisions about how to manage their wealth. These findings come from a recently released poll from wealth management firm SEI, which polled 162 people who represent families with financial assets that exceed $11.8 million. The results demonstrate that 49 percent experience feelings of isolation when forced to make large financial decisions, and 57 percent said they don't believe they are getting all the information they need to make sound financial judgments.
"The results show that many investors feel isolated when making financial decisions," said Michael Farrell, managing director for SEI Private Wealth Management. "The challenge is trying to balance the need for external input with clients' instincts to take the lead on family decisions, financial or otherwise. It really comes down to having frequent and meaningful communication with clients in order to arm them with all the information and advice they require to make confident decisions. Hopefully in doing this, the client will feel more connected and more informed when assessing financial decisions."
Appealing to higher net worth customers
The results of the survey highlight an important point about managing client relationships: the need to extend guidance. Although the study was geared particularly to wealthy customers, the message applies to all customers, regardless of income. Customers will always seek out guidance and advice on products and services that will help them generate wealth, protect their assets and build a strong financial position. Institutions that make financial education and advisory services part of their core banking strategies are likely to appeal to broader demographics of people, ranging from affluent customers to individuals undergoing major life events.
Further, being open to helping consumers determine the best products to meet their unique needs may also build trust on the part of the individual, which customer satisfaction studies reveal is a large contributor to retention and customer loyalty. For example, banks and credit unions may consider offering new customers a free consult with a financial advisor when they open an account to help determine their goals and needs. This may also put institutions in a position to strengthen these relationships over time by cross-selling other products.