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Secrets of Successful Wealth Managers

November 15, 2012

Firms that succeed with affluent clients over an extended period of time do a number of things well. Through the work of my consulting firm Clientific we have distilled the twelve core principals that successful wealth managers follow.

The 12 C’s work like building blocks, from the bottom up. Begin with the first four, components of a strong strategy. Once those are set, work on the next four, the key elements of executing that strategy. Finally, the final four are the things that differentiate top firms from their competitors.

A solid strategy and strong execution provides a fulcrum upon which your differentiation can be leveraged. I have listed some sample questions to ask yourself for each point, but this is in no way an exhaustive list. Feel free to contact me at clientific.net if you have any questions or would like a custom assessment.

Strategy- What are you trying to accomplish?
  • Clientele– Who are your target customers? Who are your best customers today? Are you targeting high net worth clients, with over $1 million in assets? Or the ‘merely affluent’, those with $100,000 to $1 million? What about the ultra high net worth– those with $25 million or more? All are attractive segments, but the keys for success are different for each segment.
  • Clarity– What exactly is your value proposition? What problem(s) are you solving for your clients? What do you stand for? What do you not stand for? If you don’t have clarity about why you’re in the business and why others should do business with you, how will you expect your clients to know?
  • Context– How does your firm fit in to the competitive landscape? Are your competitors big banks? Community banks? What about independent brokerage and money management firms? How do the legal and accounting communities address wealth management needs– are they referral sources or competitors? How will you balance all of your stakeholders– clients, shareholders, employees, community, centers of influence?
  • Culture – What’s it like to work with you? What’s it like to work there? What kinds of things do you reward? How do you make decisions? What roles do you expect your team members to play, and how do they fit with one another? What kind of individual and team incentives do you have?

Execution- How are you going to do it?

  • Competence– ‘Great service’ alone is not enough in wealth management. Your team has to have the technical skills needed to meet the complex borrowing, investing, financial planning and estate planning needs of your clients. They also have to have the ‘EQ’ to attract, retain and grow client relationships. How will you assess your team’s talent? How will you develop skills and hold people accountable? Are your current processes adequate, or will you need to adapt new talent management protocols?
  • Consistency– Having great technical and interpersonal skills will only matter to your clients if you deliver results consistently and in a way that meets or exceeds their expectations. How will you manage consistent delivery and a consistent client experience?
  • Client Intimacy– It’s easy to assume that positive, friendly client relationships are close and intimate; yet their are countless examples of advisors being shocked to learn important details from a client that are already well know by a competitor. How will you advisors move from information to insight? Think of the difference between a monaural AM radio broadcast and a Dolby THX surround sound experience. Often the difference involves understanding and addressing non financial goals and issues of your clients.
  • Courage– It takes managerial courage to truly execute. The best plans and strategies are worthless without the tenacity and discipline to execute and make necessary course adjustments. General George S. Patton said “A good plan violently executed now is better than a perfect plan executed next week.”  Change management, sales management, coaching– all kinds of leadership– require courage and discipline.

Differentiation- What makes you different?

  • Client Advocacy– The old saying “They don’t care how much you know until they know how much you care” is trite, but true. Clients have to trust you, and the most important element of trust is truly looking out for your client’s best interests. Character and integrity are table stakes, but you must be a true advocate for your client’s best interest. How do you demonstrate this to your clients?
  • Client Experience– What’s it really like to be your client? What are all the touch points clients have with you, and do they represent your brand the way you want? What about the automated letter they will receive if they accidentally overdraw their account that typically maintains six figures? Will they receive the same letter as every other customer? What will that do to their perception of your relationship? Do your call center, web presence and mobile offerings support your brand or detract from it?
  • Content– How do you communicate your ideas? You have already established what your company does and does not stand for, how do you demonstrate it? How do you present yourself as a thought leader? Do you have and communicate a distinctive viewpoint?
  • Connection– Content is usually outbound, but you have to have inbound communication channels too. What kinds of events do you attend and organize? How do you use social media to engage your clients? How do you really understand what your clients think about your brand, what they like and don’t like about your policies and practices?

We have entered a new era and the days of simply ‘build it and they will come’ is over. Firms that successfully address these and similar questions will be the ones that will succeed in this complex new era of wealth management.

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