Nicholas Tan of OCBC Bank explains how relationship managers can advance their careers by recognising and catering to the needs of different types of customers, as well as leveraging internal resources.
Date: Mar 2010
Tags: Career development, Asset allocation, Risk profile, Segmentation
Differing customer needs
Relationship managers (RMs) need to understand the needs of the different customers across the private banking and wealth management spectrum to be able to cater to them effectively, said Nicholas Tan in an interview.
The needs of private banking customers, for example, are focused less on wealth accumulation and more on how they can maintain their business and retain control over their wealth, as well as on wealth transfer, explained Tan.
These aspects of wealth management require RMs to have a different set of skills in terms of the way they engage their customers and the types of products they use to do so.
To service premier-level customers, some of them at the upper levels would have similar requirements as private clients in terms of wealth transfer, so some of the same skills are required in this area. But the general skill-set which RMs at the premier level require are likely to be more like a financial concierge, said Tan.
Advising at the branch level
At the branch level, Tan said an RM will provide broader banking services and more basic products, with some investments for those clients with a bit more income.
The amount of money available to these customers is generally not enough for advisers to have proper conversations with customers about asset allocation – so Tan said discussions should start by looking at the customers’ protection needs and seeing what has not yet been met.
Once that has been covered, Tan said RMs can then look at how much of a customer’s disposable income is left for investment.
According to Tan, it is important that regardless of which wealth segment a customer comes from, the organisation should not make any assumptions about how savvy and sophisticated customers are, or about their risk tolerance, because this can be the same for individuals in different wealth bands.
As a result, Tan said it is important for RMs to avoid making assumptions and instead ask customers various questions to determine what they need and want.
At the same time, however, the way advisers should approach different customer segments should involve a different manner as it determines the engagement model with the customer.
At the branch level, for example, the conversation should start by looking at the way the customer has budgeted their cash flows, said Tan, and then it is easier to see what the RM can do for that customer.
Progressing up from the branch network
For RMs looking to advance their careers from the branch network, it is important for them to understand what each customer wants and needs, rather than simply offering certain products to sell.
The first thing RMs need to know, therefore, is the differences between customers at the different levels, and how they value different things, said Tan.
Once advisers understand this, it makes it easier to speak to customers and judge where they can business with them, he explained.
To make the best use of internal resources, Tan said advisers need to understand the organisation’s product sets.
In many of the wealth segments, the banks use investment advisers as specialists in various product and investment areas to bring value to the process. When they are in meetings with RMs, this is the time when the RMs cannot switch off and leave it to the specialist, said Tan.
Instead, RMs need to be listening closely to determine how the customers are handling the conversation.
Mistakes for advisers to avoid
A regular mistake which RMs make in the advisory process is when they make calls together with investment advisers – but don’t pay enough attention as the RMs think they are only generalists. Yet that is one of the best times to understand what customers want and need form their reactions and questions, said Tan.
A second key mistake which Tan said RMs make is not putting themselves in the shoes of their customers, and as a result, not properly understanding what is important to that customer.
Supporting and facilitating advisers
For some things that organisations want to instill as basic behaviour of their RMs, it comes down to doing drills, said Tan.
Beyond that, for things which are difficult to engrain into advisers, he said it requires teamwork and getting the whole organisation to be focused in one direction.
