Products and services on offer from private banks and private client investment managers still fail to attract most of the target market, according to MDRC's report on the UK high net worth market.
According to Richard Thornton, executive consultant wealth management at Cap Gemini, HNWIs are becoming a lot smarter in their choices of funds and private banks and wealth managers need to offer more than just products and services from their own offerings. He believes they need to offer external funds as well as their own.
Thornton said: “Over the last 10 years fund managers have done a bad job at protecting client’s capital and investors are beginning to wonder why they are paying a wealth manager if they are not beating the index and beginning to create their own portfolios themselves.”
Williams warns the costs of operating in the HNW sector continue to increase and many of the smaller wealth management firms remain under pressure. He thinks businesses that succeed in the future will be those that align their business strategies to managing and developing the client relationship and adapt rapidly to the changing business environment.
Greg Horton, managing director at Fairbairn Private Bank does not agree. He says: “At Fairbairn Private Bank we have not experienced disappointment from our clients in our wealth management offering. On the contrary, in our last client survey 98% of our HNW clients were more than satisfied with us and 87% have already or would consider recommending us. However, we are aware that 8% of our clients opened their account with us because of dissatisfaction with their previous bank.”
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