In the complex world of private banking and independent wealth management, the perception of value plays a pivotal role in cementing the bond between a relationship manager and its client. Everyone knows relationship management time is a finite resource.
Before discounts are granted, a relationship must meticulously evaluate their earnings with a particular client. While flaunting large Assets under Management can be impressive, at the end of the day, what truly matters is the real revenue. ๐ผ
Discounts are undeniably a possible strategy for securing competitive clients. Yet, this form of client acquisition is no walk in the park. Discounts often serve as tools to tailor pricing for a diverse and discerning clientele, but this comes with unique challenges.
With limited insights into revenue and pricing KPIs across various fee layers extending to revenue sharing on in-house products, even the bankโs relationship managers cannot navigate murky waters. It would be helpful for these professionals to equip them with software tools to help analyse the economic implications of discounts and the internally set targets for Return on Assets. Discounts are often granted without prior knowledge of the ensuing revenue loss. While workflow solutions have become standard in many domains, discount approvals still frequently rely on unstructured, manual processes, paving the way for potential errors and inconsistencies. ๐
Given these challenges, relationship managers should exercise caution when offering discounts to ensure the profitability of each client, as their client book could be reallocated at any time.
However, Private Banking transcends fee discussions or performance comparisons. Itโs about cultivating relationships and delivering value without losing sight of the bottom line.
Do reach out if youโre keen on a straightforward and transparent fee model and aim to be at the forefront of the value chain. ๐ฉ
Source: LinkedIn
