In Swiss independent wealth management, many relationship managers and firm owners have extensive private banking experience. As a result, their wealthy clients often come from past connections. This creates a client base typically of similar age or older than the relationship managers. This dynamic presents several key challenges:
🔹 Ageing Clientele: The client base is ageing, symbolising the ticking of the demographic clock, with potential implications for both client needs and service strategies.
🔹 Decreasing Company Value: As clients age and approach life expectancy, the long-term revenue potential for the wealth management company decreases. This is compounded by the fact that older clients are typically in a phase of wealth consumption rather than generation.
🔹 Retirement of Relationship Managers: In Switzerland, it’s common for wealth management relationship managers to retire at age 65. Often, these managers are the primary, if not sole, point of contact for clients, raising concerns about continuity and client retention.
🔹 Need for Younger Talent: To effectively engage with the modern, digitally oriented generation, wealth management firms need to integrate younger relationship managers who are well-versed in digitalisation and social media and have strong interpersonal skills.
Younger generations, including Millennials, are increasingly favouring digital platforms like Snap Inc. and TikTok. Some Swiss banks have already made commendable strides in using these platforms. This shift highlights the importance of adapting to the evolving preferences of a tech-savvy clientele. As a result, the wealth management industry must embrace change and strategically prepare for the generational transition ahead.
Source: LinkedIn
