Investors feel they don’t have “personal relationships” with their wealth managers despite the fact that wealth managers consistently brand themselves as being in the “relationship” business, according to a poll released on Tuesday by SEI Global Wealth Service.
In fact, the survey titled The Relationship Business: Expect the Unexpected found that the financial services industry ranked below men’s fashion in delivering empathy. Even though both wealth managers and investors agree on the definition of empathy, 62% of investors report that their wealth managers fail to demonstrate empathy.
“Undeniably, there is much work to be done in the banking industry in order to restore clients’ faith in the ability of wealth managers to listen and meet their needs. Trust will only be restored when firms recognize that investors judge client service on their personal relationships with their wealth manager, in addition to the culture, ethics, and overall behavior of the firm,” said Jim Morris, Senior Vice President for SEI’s Global Wealth Services, in a press release.
“This research provides a tool wealth management firms can use to evaluate necessary behavioral changes at the individual wealth manager, organizational, and industry levels," he said. "Only through change can wealth management firms hope to boost investor confidence in the ‘relationship business’ and deepen their client relationships.”
So, what can wealth managers do? The survey revealed that both clients and wealth managers agree on four best practices: enhanced client profiling, enhanced relationship management skills, improved communications, and client-centric compensation policies.
With clients confidence in their wealth managers decreasing, according to the study, many wealth management firms have focused on implementing client-centric models in order to deliver empathy.