Banks, from Tier One to regionals and including some credit unions, see wealth management as a growth engine, said Scott Reddel, Accenture’s North American wealth management lead.
But they face challenges, he said. “They are still so siloed they struggle to identify wealthy individuals, or if they do have a sense, they have trouble handing the clients over from the commercial banks, or from the private bank to the wealth management arm.
“You could own a small business or be a retail banking client and an advisor would not know your banking history. He wasn’t enabled technically, there were different sales teams and there was no incentive to share and cross-sell between the two.
The vast majority of advisors or private bankers haven’t engaged the female of the household around finances, or they are not engaging the way females want to engage around their money, he added. Women approach investments differently from a risk standpoint, they want validation and confidence building. If a wealth management firm hasn’t built a strong relationship with the woman, who statistically is likely to outlive her husband, the firm will see the money shift to another firm and another advisor.
“As the transfer happens, there is a sticking point — a year or 18 months is quite common,” when the widow moves the account to a new advisor and a new firm. She may also be influenced by the next generation, children who have their own ideas about how investments should be handled.
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“Banks that do this best have the full picture of households and relationships and act against that. Organizationally, the wealth and banking division either operate as one or complement and are incentivized to value the view of the household. They can navigate the relationship, data can be passed back and forth, they can look at all the accounts and strategically make a commitment. We want to look at holistic wealth, banking and wealth and the insurance side — how do they advise on that, even if they don’t offer all of it.”
Reddel sees some pretty drastic changes coming to the advisor workforce.
“Some is demographics — aging advisors turning over. Clients of all genders and segments are looking at holistic wealth management. The skill set for advisors is evolving. Firms are looking to better use of digital, data in artificial intelligence to better equip and empower their advisors. Diversity, including gender diversity, in the advisor workforce is a priority for many firms that Accenture works with, Reddel said,
“It’s good timing for this evolution to happen, with the shift from product to advice. Diverse new types of financial advisors with experience bring new perspectives to the work force, and some of them are more equipped to use digital tools.”
The advisor workload can range from 100 clients to several hundred.
“We see firms, especially in banking, scaling a lot of that through digital, so advisors can service more clients, or some clients can be served through a shared pool that is more digitally led.”
Firms and advisors are seeing a growing proportion of clients who want to do some of the work themselves — from onboarding to looking at their transactions.
“They are using Amazon and are fairly comfortable operating on their phone. That’s not replacing all the advice, just some of the steps, and giving the clients more control. “If you look across all segments, private wealth, wirehouses, retail banks even insurance companies with wealth arms, this is a big growth engine for everyone, no one feels that what they do today is very good, so there’s a lot of energy around innovation.”