SEI conducted a survey that shows a gap between what banks’ wealth management divisions believe is their competitive advantage and what they are selling. The survey of 21 wealth management executives was conducted at SEI’s Executive Symposium in late September.
The survey suggests that banks acknowledge a significant market opportunity in an emerging wealthy segment. Primary and secondary research conducted by SEI has shown that this emerging wealthy segment want and need advice beyond traditional wealth management.
The survey reports that 52% of respondents believe they are differentiating their wealth management by the advice they give to clients; however, they reported traditional offerings such as estate planning and financial planning accounted for nearly 40%.
“Banks are beginning to understand that they must fundamentally change their business model to accommodate the needs of the emerging wealthy generation,” said Al Chiaradonna, vice president of strategy and innovation for SEI Investments Private Bank and Trust Segment. “They have a competitive advantage because of their existing banking relationships. The challenge for these organizations is to grow beyond the traditional banking relationship into the role of a trusted life and wealth advisor.”
The survey found significant barriers to implementing an advice-driven model within bank wealth management departments. All respondents agreed that there are obstacles in institutionalizing the client experience across their organization.
Sixty-two percent of those surveyed said technology is the biggest obstacle in creating a uniform client experience. Many are challenged in trying to manage diverse platforms and manage customer data.
“Without a consistent client relationship process and the infrastructure to support it, banks will be challenged in their quest to capture the emerging wealthy market,” stated Chiaradonna.