In today’s environment of market uncertainty and wary investors, coupled with the tricky and slow process of rebuilding trust between clients and their bankers, finding a way to stand out from their peers is critical to the success of any relationship manager.
Date: June 18, 2010
In today’s environment of market uncertainty and wary investors, coupled with the tricky and slow process of rebuilding trust between clients and their bankers, finding a way to stand out from their peers is critical to the success of any relationship manager (RM).
So after speaking with senior practitioners in the wealth management industry, we have compiled a list of some simple yet powerful ways for RMs to think more strategically and proactively about their current relationships with their clients.
The goal is to boost productivity and effectiveness. With the aim of differentiating themselves and ensuring a successful career in wealth management in Asia.
The 10 suggestions below have been structured into a series of quick tips for easy reference:
1. Ask for more business from existing clients
Based on an assumption that RMs have good relationships with their clients and have done a good job of managing both their clients’ portfolios as well as their expectations, few RMs actually ask their clients detailed questions about their total net worth and where else they invest their money. This doesn’t have to be done in an overly “salesy” way; RMs can instead show their clients that they are acting in their best interests by helping them make a plan for how they should manage those parts of their portfolio which are distributed among other wealth managers. This can help convince clients to consolidate their wealth to create take a more strategic approach.
2. Don’t wait for referrals – be proactive in seeking out ways to meet prospects
In a similar way to RMs being too passive in asking existing clients for more business, RMs also need to ask clients with whom they have positive relationships for referrals. The worst a client can say is no. In a similar way, RMs need to formulate clear business plans to prospect for new clients – detailing the types of clients they think they can target and why, the timeframes for prospecting, goals for how many prospects the RM hopes to meet and close, and where the RM will find these clients. The final stage is for RMs to understand and practice explaining what they can offer clients and what their and their institutions’ value propositions are.
3. Under-promise and over-deliver
Managing expectations is perhaps an over-used term in private banking and wealth management today – but this is for a good reason. RMs must avoid the temptation to make any promises, especially when it comes to performance and returns, in an attempt to close a deal and prevent a client going to a competitor. The worst mistake any RM can make in this context is lying about what their institution can offer – just to get a client’s business. Being open and honest in every client relationship is essential, as is understanding the value of taking a long-term approach. This applies two ways, since there will be many times when RMs will need to manage downwards excessive client expectations. The ultimate aim for RMs, therefore, is to deliver more than clients think they will be getting.
4. Never appear desperate for a clients’ business – and never burn bridges based on disappointment with any decisions they make
Particularly in today’s low-fee environment, RMs must resist the urge to try to generate revenue through pushy sales conversations. Although clients are in general also focused on trying to generate higher returns for their portfolios than they might be seeing, they are warier than ever before of aggressive tactics, so need to feel more comfortable with the level of transparency in the products, disclosure and fees with which they are presented. Taking a short-term approach of trying to close the deal rather than giving clients the opportunity to review and reflect on conversations and proposals will prove both fruitless and self-defeating in the long term for RMs.
5. Think about what motivates clients and what they are most likely to respond to in a sales pitch – for example making money, or not wanting to miss out on an opportunity
At the same time as being sensitive to clients’ concerns post-financial crisis, RMs do need to be aware of what motivates individual clients in their buying decisions. This is only possibly once RMs know their clients better – which might require a return to the basic discovery process through asking the right questions in a client meeting to understand their needs, goals and risk profile, in relation to a combination of their personal situations, families, businesses and investments – both past and present. Once this has been done accurately and comprehensively, RMs will be able to tailor their conversations and proposals more appropriately and successfully to their clients’ needs. If RMs come up with the right offerings, clients will then be able to see the value in spending more time doing this. Always making the effort and doing the research to create a positive first impression in every meeting with every client is an obvious tip, but one which is rarely followed.
6. Try to be realistic about where relationships with clients are at
RMs who make assumptions about their relationships with their clients, and take them for granted, are destined to be disappointed by how their interactions with their clients evolve. RMs must regularly ask their clients questions such as how they are getting on, whether there is anything the RM should be doing which they might not already be, and how the RM can add more value to the client. Asking for such feedback can mean the difference between a client staying loyal to an RM or avoiding their calls and doing further business with them. Key for RMs to remember is that building positive relationships with their clients is only ever going to be achieved by having regular face-to-face meetings with them.
7. Make a detailed written plan for every day – and stick to it
It is easy to get distracted by things which are not relevant to an RM’s role and responsibilities – which should always involve spending the majority of their time talking to their clients. Without a clear, written plan for every day, RMs are setting themselves up to fail. A technique for making the most of the limited working hours is allocating blocks of time to achieving important things, and then focusing on getting them done.
8. Don’t take on clients where interests, styles or cultures are not aligned
RMs should be aware that there are likely to be cases when what a client wants doesn’t match what the RM or institution offers. And clients don’t forget advisers who waste their time. Whether this is related to the advisory style, types of products the clients want, or simply contrasting personalities, RMs must identify any mis-matches at an early stage and address them. On the flipside, RMs must be careful to not waste time with clients who the RMs don’t think will ever earn them (or their institutions) much money.
9. Streamline accounts – go for quality rather than quantity
RMs should try to ensure that everyone they deal with is in line with their goals of being a profitable adviser. It would be better for RMs to have five loyal and active clients who might earn them US$10 million a year in revenue rather than hundreds of clients who might earn them US$1 million a year in revenue. To do this, RMs should look in detail at each of their accounts to determine who is worth them spending more time and attention on.
10. Don’t hoard clients – get rid of unproductive relationships
Every year, RMs should look to review their accounts and take their 10 least productive relationships and get rid of them. If a relationship is not effective in generating revenue, then it is in the best interests of both the RM as well as the client to close the account.