This publication exclusively carries research from Wealthmonitor looking at what UK-based entrepreneurs want from wealth managers and private banks.

No matter how sophisticated technology becomes in this age
of “clouds”, tablets and tweets, one-to-one contact is highly valued by
entrepreneurs when dealing with private banks, according to one of the takeaways
from a new report from Wealthmonitor and provided exclusively to this
publication.

A recent survey of UK-based business owners who have
experienced a significant liquidity event in the past 12 months (such as the
sale of a firm) led Wealthmonitor to spell out five recommendations for an
industry chasing a share of this wealth. (The report was issued in association
with Gulland Padfield, the consultancy to private banks.)

The proposals are to segment clients in more detail; develop
a referral network; educate clients, choose the right mixture of marketing
channels and retain the personal touch.

The study, called Finding
The New Wealthy: Strategies For Private Banking To Engage Entrepreneurs,
found that 74 per cent of respondents are “positive” about private
banking, while 18 per cent are negative and 8 per cent have no strong views either way.

One finding that jumps off the page is how many
entrepreneurs and business owners – if the findings are representative nationally across the UK – know only
one or two leading wealth management brands, and in these cases, most
respondents gave the private bank divisions of high street brands. This
suggests the industry has a big task in raising brand awareness effectively.

Another finding is that while most of the respondents said
their needs have “substantially” or “moderately” changed in the last 12 months,
hardly any of them have changed their advisor as a result of such developments;
in cases where needs have changed “substantially”, three-quarters of
respondents have retained their advisors. Some 35 per cent of respondents said their needs have changed "substantially"; 20 per cent said "moderately changed" and 45 per cent had no change.

“Either their existing advisor has met these new needs but a
more likely explanation is that many are unaware of the alternative providers
who might suit their new circumstances better,” the report, which includes
interviews with some prominent bankers, says.

Two-thirds of those respondents who said private banking is
not appealing to them said this was because they could see no value in it for
them.

Case studies

The report carried a case study, for example, with Sue
Oriel, managing director of Firecracker Films; it said she made it clear that
the wealth industry was not keeping pace with needs of such businesses. Giving
her impressions, she said of the sector: “It feels old and fusty to me.
Marketing materials seem old fashioned – and while it is generous to ask me out
to a two-and-a-half-hour lunch, the average person who has wealth doesn’t have
that time to spare. There’s a kind of mystique to private banking, almost as it
if means some sort of financial `butler’. This is the wrong kind of signal for
what I want.”

Asked what she wanted from wealth managers, she replied: “Ultimately,
if you’re a wealthy person, you feel that what you should be able to do is buy
convenience for yourself. It seems that nobody ever asks you what you want,
they just tell you what they offer.”

In another set of comments, Charles Hoffman, managing
director for HSBC Private Bank UK,
says the approach that he thinks works best for a bank is where a banker “explains”
rather than “sells”. He also argued that the industry could learn from
professional services firms about how to engage with clients and build
relationships. “Some professional firms have designated business development
teams to help set up meetings and contacts for relationship leads.”

He also said: “They say it takes even years to become a
trusted advisor. Anyone who thinks you can short-cut the process of building
relationships is, in my view, mistaken. I think there are ways to identify
people at a key moment when they might need help. But, certainly at the top end
of the market, it can be a long, long game.”

Finally, James Edsberg, senior partner at Gulland Padfield,
spoke about issues such as client referrals and how these can be handled
better. “For a referral to work, the existing client needs to recommend the
institution as well as the RM. We see firms making greater efforts to explain
to people what it would be like to join them as a new client,” he said.

To view another example of a Wealthmonitor report published
exclusively by WealthBriefing, click here.