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Are the private banker dinosaurs dying out?

Disclaimer: The views and opinions expressed in the vapa Swiss independent wealth management blog posts featured on this page are solely my own and do not necessarily represent the views of any institutions or organisations I may be associated with. These posts are intended to share personal insights and perspectives and should not be interpreted as official statements or positions of any affiliated entities.

I have commented on this topic before but have received several DMs to explore this topic further regarding the longstanding client relationships of relationship 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 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 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 clients’ needs.

Independent wealth managers may need to invest in training and development programs to ensure their relationship manager hunters have the necessary skills and knowledge to succeed. These programs may cover various topics, including market research and analysis, client acquisition and retention strategies, and interpersonal communication and negotiation skills. By doing so, independent wealth managers can build a solid and effective team of relationship managers overcoming the upcoming shortage of the 300MM+ dinosaurs in the market; however, that needs investments over many years without a guarantee for success.

Nevertheless, you should see it as an entry ticket to serve the next generation. Your clients also get older every year, and forthcoming wealthy generations love to be wooed by like-minded people.

Source: LinkedIn

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Adapt or Vanish: The Evolving Role of Relationship Managers in Private Banking

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