Mykolas Rambus of Wealth-X explains how private banks can identify, segment and acquire clients in the ultra high net worth space.

Date: Nov 2011

Tags: UHNW, Segmentation

• A reason for the lack of penetration by wealth management organisations in the UHNW space is the fact that it isn’t easy to identify where the money actually is
• Some of the ways banks can target UHNW clients is about developing trust and having the correct introduction to the client
• Configuring the organisation and team in a way to pursue these clients in a segmented way needs to be the focus
• When advisers know their clients’ dreams and fears, they will be able to tailor their services accordingly, at an emotional level, to ensure an effective client experience

When focusing on ultra-wealthy clients in a particular market, it is often difficult for organisations to identify the percentage of these clients that they already have relationships with, said Mykolas Rambus in an interview.

As a result, he said he hopes the recent report from Wealth-X will help management benchmark their existing client base in the ultra high net worth (UHNW) tier in terms of what they have already, and how much further they have got to go to achieve their objectives.

Despite there being so much wealth creation underway, especially in Asia, Rambus said relatively few organisations have already tapped into these opportunities, adding that he would hope to see more firms targeting these markets in a more structured way.

Increasing UHNW penetration

According to Rambus, a reason for the lack of penetration by wealth management organisations in the UHNW space is the fact that it isn’t easy to identify where the money actually is.

For example, there are over 11,000 UHNW individuals in mainland China alone, he said. As a result, the challenge for the banks is working out how to pursue these opportunities.

Some of the ways banks can target UHNW clients, said Rambus, is about developing trust and having the correct introduction to the client.

While there is a lot of talk about fee-based services, and whether to target the first or second generations, he said developing an offering which resonates with a client is the key to making an impression – even if this isn’t the organisation’s most lucrative product.

Segmentation as a differentiator

Rambus said that client segmentation is also an important differentiator in today's market.

With so much money being spent on trying to grab market share, the focus to date has largely been on getting teams in place to try to get better access to certain client groups. However, there is not enough talent for every firm to do this.

As a result, configuring the organisation and team in a way to pursue these clients in a segmented way needs to be the focus, he explained.

Client experience in the UHNW segment

To ensure a good client experience for UHNW individuals, Rambus said it is all about insight and understanding.

When advisers know their clients’ dreams and fears, he said they will be able to tailor their services accordingly, at an emotional level, to ensure an effective client experience.

Allowing for UHNW differences in Asia

A further consideration for advisers is the way in which wealth is displayed by UHNW clients in Asia, in turn influencing the interaction between advisers and clients, added Rambus.

For example, in mainland China, a lot of UHNW individuals display their wealth by purchasing various luxury goods. In India, by contrast, luxury brands have found it challenging to crack into the UHNW community.

In line with this, there are subtleties which private banks and advisers need to be aware of when targeting clients in different geographies, he said, adding that this is something which firms need to focus on as they look to scale and institutionalise their businesses in this segment.