Wealthy individuals feel they get better customer care from charities than they do from private banks, according to a new survey.

Wealthy individuals feel they get better customer care from charities than private banks, according to a new survey which exposes stark findings on the wealth management industry.

The third annual Future Wealth Report survey of 3,300 affluent and wealthy individuals by consultant Scorpio Partnership compared the satisfaction gained from six big-ticket spends, including purchasing a new piece of technology, buying a car, splashing out on jewellery or a luxury watch, buying a piece of art, the donation of a charitable gift and setting up a relationship with a private bank.

While charities outperform the expectations of the wealthy by 12.3 per cent, compared to the benchmark of 9.9 per cent, private bank relationships ranked lowest on the scale, outperforming expectations by 7.1 per cent. Coming in second place was art dealers (11.7 per cent), while car traders also ranked low, just above private banks.

This revelation comes despite the fact that the average client spends $16,200 in fees annually on wealth management fees, according to the survey. This is just below the average $17,300 on a big ticket spend for HNW individuals, while the average charitable gift comes in at around $12,500.

“Charities are delivering a standard of donor care that is well beyond their expectations,” said the report. “This task is more difficult for private banks and wealth management organisations…for whom expectations are very high. They might not call this luxury, but there is no doubt that what they sell will be an aspiration for some, and a dream for many more. These expectations are not easy to beat.”

Sebastian Dovey, co-author of the report and managing partner at Scorpio, told WealthBriefing exclusively that the two are not easily comparable due to the individual's emotional connection to donating. He said: "The difference between charities and private banks is related to the emotional connection to the role of the money in the experience. In charitable donations the individual has a different set of expectations - which are often broader - and so there is a higher chance of satisfaction. Private banking is setting too refined a scope of expectations with clients - typically related to the outcome of performance."

Indicative of the satisfaction they anticipate receiving, most respondents said they spend more time choosing a new watch or a car than choosing their private banker. Respondents take on average 50 days to decide on a private banker. This compares to other big-ticket purchases, which take from 25 days for technology (such as iPads and smartphones) to 55 days for a watch and 57 days for a car.

Essential branding

The survey said that private banks and wealth managers fall down most on their branding. While it is easy for a luxury firm to establish a high profile brand, for a private bank, which is by nature, private, branding is less straightforward. The recession has not helped, either.

“No doubt, the financial crisis plays a part here, but… it is incredibly hard for banks to evoke feelings of passion. Private banks are also losing consistency in the crucial transactional steps, which suggests they need to do more if they want to deliver that extra special service their… clients have been led to expect,” said the report.

The survey pointed out that for private banks, at almost every step in the journey they are expected to deliver to a very high standard. "Brand, (initially), is paramount and then the buying journey crescendos towards staff efficiency and smooth order processing. Even at the tail-end of the wealth management buying experience there is no respite. As the relationship builds over time, clients expect not only ongoing contact but also perks and other customer treats," said the report.

The ebb and flow of these customer expectations highlights how important post-purchase care is to all providers that want to build long-term client relationships. This is most noticeable for charities, art dealers and private banks, who seem to recognise that maintaining an ongoing connection with interested and motivated patrons and clients is the key to future success, the report continued.

Scorpio ranked the top 36 high-end brands according to HNW “brand love”. At the top were the technology and automobile companies, lead by Apple, Porsche, BMW, Ferrari and Rolex. Scraping in at the bottom were American Express, HSBC, UBS and Citibank. American Express was most likely buoyed by its concierge service, as hospitality events and invitation-only services scored highly on relationship manager performance, according to the survey.

This is the third annual survey from Scorpio Partnership, in partnership with Standard Chartered bank, technology firm SEI and consultant Morar Consulting. Three quarters of respondents had over $500,000 in assets, while a quarter had less than $500,000. Most (43 per cent) of respondents are Asia-Pacific-based, with 39 per cent in the US and 16 per cent in Europe. Since 2009, the number of respondents taking part in this project has increased 130 per cent to 3,300 today.  The research was conducted in July and August 2011 using online surveying techniques.