Chapter 18: A Network Of Experts Is The Future Of Asset Management

The client experience in wealth management is often very unique for each client, as hardly any clients have similar needs, plans or assets. Therefore, clients require a tailor-made wealth management solution. According to Ernst & Young, there are three distinct elements in a wealth management relationship that complement each other to form a unique experience for wealth management clients: Performance, engagement, and trust.

Interests between wealth managers and clients are mostly aligned. However, when it comes to transparency, wealth managers need to improve their disclosure process significantly. Portfolio performance and fees charged are key drivers of trust to clients. In the past the cost structure has oftentimes not been very transparent and hidden fees were generated for wealth managers through retrocession (e.g. by buying certain high margin products which yielded kickbacks or by receiving trading commissions which incentivized the asset managers to trade more frequently). Transparency helps clients to compare performance net of fees as well as services in general terms and wealth managers will have to adjust to this.