I have commented on this topic before but have received several DMs to explore this topic further regarding the longstanding client relationships of wealth managers.
These managers used to be responsible for building and maintaining long-term relationships with clients, understanding their needs and goals, and providing personalised advice and services.
However, in recent years, banks have become increasingly wary of relationship managers forming alliances with clients. As a result, they have implemented various rules and policies to prevent such dependencies, making it more difficult for independent wealth managers to hire top dinosaurs talents.
One of the main ways banks have prevented dependencies between relationship managers and clients is by shifting private bankers internally. Rather than allowing relationship managers to form traditional private banking style long-term relationships with clients, banks may move them to different locations or focus regions, reducing the risk of any relationship manager becoming too closely attached to a particular client.
For example, a sizeable Swiss private bank has implemented a policy of rotating client advisers every few years to ensure that clients have contact with a range of advisers rather than becoming too dependent on one individual.
Another way in which banks have prevented dependencies is by slicing multi-market coverage. Rather than allowing a single relationship manager to cover a broad range of clients, banks may divide the market into smaller segments and assign relationship managers to each element.
These policies and rules have made it more difficult for independent wealth managers to hire top dinosaur relationship managers. However, there may be ways to overcome these challenges. One possible solution is for independent wealth managers to focus on educating and training new relationship manager hunters by developing a deep understanding of the market and clientsโ needs.
Training the Next Generation of Relationship Managers
Independent wealth managers must invest in training and development programs. These ensure their relationship manager hunters possess the necessary skills and knowledge. First, these programs should cover market research and analysis. Next, they must include client acquisition and retention strategies. Finally, they need to teach interpersonal communication and negotiation skills. With these steps, independent wealth managers can build a strong and effective team.
Additionally, this approach helps address the upcoming shortage of the 300MM+ dinosaurs in the market. It requires significant investment over many years. Yet, there is no guaranteed success.
Nevertheless, consider this an entry ticket to serve the next generation. Clients grow older each year. Forthcoming wealthy generations love to be wooed by like-minded people.
Source: LinkedIn
