Client relationship managers are increasingly seen as the motor that drives successful wealth management strategies and the need to attract ...

Client relationship managers are increasingly seen as the motor that drives successful wealth management strategies and the need to attract top CRMs has become critical for private banks, according to research from PricewaterhouseCoopers in the Asia-Pacific region. The research found that chief executives of wealth management firms have woken up to the importance of CRMs, and believe the quality of staff and personal relationships to be their organisation’s two essential differentiators. However, the survey reveals that wealth management organisations do not appear to be communicating their strategic objectives adequately to their staff. According to the survey, only 28 per cent of chief executives globally say that objectives are fully communicated to staff. “It is bullish times in Asia, the economic boom is creating many more clients for wealth managers. On the other hand, we also have many untapped high net worth individuals who are not serviced by private banks. The war for clients has intensified and CRMs are now the commanding officers in this battle,” says Justin Ong, Partner and leader of the wealth management practice for PwC in Singapore. The CRM talent pool is reaching breaking point and it is critical that wealth managers consider whether the whole CRM package is attractive and adequately linked to their business strategies, said the PwC research. There are indications that remuneration packages are becoming more sophisticated. Over the next three years, incentives such as phantom equity, traded stocks/stock options and team/local bonuses will become important. There is already a prevalence of performance-based remuneration and this will not only increase but become closely tied both to individual, and especially team, performance. “It is a shocking statistic that given all that the survey highlights about the importance of CRMs only 40 per cent of respondents appear to have a formal employee retention programme. There is a global shortage of private bankers and I believe grooming existing talents is the most viable way and also a long term solution. Recruiting and poaching within the industry incurs high costs and does not guarantee results. Management needs to look into programmes which attract, develop, deploy and retain CRMs,” said Mr Ong. The research went on to talk about the importance of training, with 70 per cent of respondents believing training of CRMs to be extremely important, yet 45 per cent have a training budget of less than $5,000 per annum. The majority of training is still dedicated to product training focusing on sales, regulatory updates and issues such as anti-money laundering and know your client. Yet important areas such as taxation, soft skills and open architecture are low in the order of priority. “These findings appear to conflict with the wealth manager’s central proposition of offering the best possible advice to the client. The need for comprehensive training is recognised but in reality many CRMs only receive training on what is ‘business’ necessary,” said Mr Ong. High standards in the handling of existing client relationships can create a virtuous circle, said the research. “We believe that CRMs are the key to success in wealth management but failure to develop and retain them could spell disaster,” said Mr Ong.