The linkage between client relationship and wealth management can unveil new strategies which empower firms to not only meet but exceed client expectations.

The following article that explores the role of customer relationship management, and the way that digital tools affect and shape it, comes from Pallav Kapur (pictured), head of Banking Americas at Synpulse. The firm is a global management consulting company and partner to financial services providers. The editors of this news service are pleased to share these insights; the usual editorial disclaimers apply. Email tom.burroughes@wealthbriefing.com if you wish to respond.
 
The wealth management industry is experiencing a revolution in customer experience, driven by digital transformation. Customer relationship management (CRM) tools are at the very heart of this, as they touch one of the most defining and essential parts of the wealth management industry – the relationship between customer and advisor. In fact, as far back as 2021, research by T3 / Inside Information found that more than half (55.6 per cent) of advisors ranked their CRM as their most important software. 

So, in an increasingly tech-driven and fast-paced industry, how can wealth managers walk the tightrope of prioritizing exceptional client experiences in an era of digital transformation? 

A time of changing customer expectations 
Customer expectations are changing. The industry is in the early stages of the largest generational wealth transfer in history. The scales will tip so that the Millennial generation will make up the majority of wealth management customers, and Gen Zs will also soon be choosing their first wealth management products. With many of these individuals being digital natives, they are likely to be acutely aware of the pros and cons of digitized experience, as well as having an appreciation for the human touch. This makes getting the balance right even more important for wealth managers.  
 
High net worth individuals are 36 per cent more likely than general consumers to say that they want brands in their life to be “innovative” and 52 per cent are more likely to say brands should be “exclusive” (GWI, 2022-23). This encapsulates dual – and sometimes conflicting – trends among customers. However, these clients also expect to keep receiving highly tailored advice, offers, and communications. It is this balance of bespoke customer service and modern convenience, which wealth management firms must now get right.  

Focus on adding value  
A weakness of many mediocre CRM implementations is that it increases noise for consumers and dilutes the bespoke and personalized nature of the service they are receiving. By contrast, successful strategies will focus on providing customers with additional value beyond returns, with an eye for relevance and quality over volume when it comes to communications. While some wealth managers begrudgingly transitioned to CRM solutions during the pandemic as the only way to manage remote customer relationships, there is now an opportunity to rectify the balance. Customer relationships are of paramount importance and there is an urgent need for wealth management firms to prioritize bespoke, exceptional client experiences in this hybrid way.  

Many wealth management firms harnessing CRM technologies in this way streamline customer communications, improving both client engagement and internal workflow efficiency as a result. Initial investment in the implementation and integration of CRM software is central to achieving this, as it ensures that all systems are suitably connected to the CRM. If this step is not taken, wealth managers may find CRM harming rather than harmonizing with their customer service approach, as it will not provide visibility into workflows in other essential tools, for example planning or compliance. 

On a larger scale, personalized customer data can be utilized to develop comprehensive customer experiences in CRM systems and identify opportunities which customers themselves might not be consciously aware of. This enables wealth management firms to offer innovative new experiences in a relevant and valuable way. In research by EY, 71 per cent of wealth management clients reported that they would willingly share personal data with their primary wealth manager to uncover and analyze critical insights. In other words, customers are open to a switch to a more data-driven experience, if there is a clear and valuable benefit to them.   

Plan for the future 
In a highly competitive industry, customer retention and careful management of the customer lifecycle is a priority for wealth management firms. This covers every stage of the customer’s relationship with the firm, from prospecting and onboarding through maintaining satisfaction and optimizing offerings. 

Lifecycle management is not just about welcoming newer customers, but preventing turnover in long-term customers too. One of the main factors for unexpected turnover is when customer needs or priorities change, and firms are not able to anticipate these changes. CRM can support with these efforts through crunching the data to understand an individual customer’s unique financial needs, personal preferences, and specific goals. CRM can also detect behavior changes over time, helping wealth management firms to ensure that they can communicate a new offering which may address the customer’s changing needs before they begin to look elsewhere.  

Applied at scale, CRM analytics can also provide greater insights into a firm’s customer base as a whole, helping them to identify increasingly common needs, niche offerings to trial, and areas of operations to invest in. A more targeted approach to strategic growth planning means they can find a competitive edge.  

Synergy over mimicry is the key  
There are many distinct facets to this pivotal tool, from its significance in designing personalized customer experiences to its seamless integration into wider digital ecosystems, and the part it has to play in cloud transformation. The dynamic synergy between CRM and wealth management can unveil new strategies which empower firms to not only meet but exceed client expectations. More than just a way to relieve manual burdens, CRM can be an essential tool in elevating customer experiences and honing a competitive edge in the dynamic world of wealth management.  
 
About the author
Pallav Kapur is the Head of Banking Americas at Synpulse. He has more than 17 years’ experience in consulting for and working at major financial services brands, including Bank of America Merrilll Lynch and Morgan Stanley.