Customers of UK private banks and wealth managers are becoming more concerned with value for money rather than simply in performance, accord...

Customers of UK private banks and wealth managers are becoming more concerned with value for money rather than simply in performance, according to research carried out by Market-Dynamics Research & Consulting, a UK-based research consultancy. Analysis of the results from surveys carried out over the past five years showed that performance is not the single, main driver of customer satisfaction, as it once was. Customers have questioned how much value they were seeing from private banks when fees are going up yet the performance they were seeing only matched the FTSE. Richard Williams, managing director of MDRC, UK toldWealthBriefing: “We have seen people initially very concerned about performance, but now they seem to be more concerned about value for money.” Amid a general increase in levels of satisfaction, investors have shown concerns over increases in fees and ad valorem charges, and how these can be justified by fund managers. Mr Williams said: “Some wealth management providers have been rebating back commissions, which is a very good practice, but by no means all of them are doing this.” Customer satisfaction is gradually returning to the state of general approval held by customers prior to the stock market falls of 2000 & 2001, said MDRC. MDRC has been able to develop a “Client Satisfaction Index” for the private banking and wealth management sector. No firm in 2005 was given a “poor” score and a “good” rating was achieved by 66 of the 92 private banks and private client managers in the survey, a 43 per cent increase in the number of firms rated as good or better in 2004. The highest client satisfaction score in 2005 for UK domiciled clients was achieved by UBS Wealth Management while the highest client satisfaction score for UK expatriates was achieved by Kleinwort Benson Private Bank. One factor contributing to the increase in overall client satisfaction is a continued increase in the number of clients who have withdrawn in whole or in part, from an integrated wealth management product and returned to an advisory or self-directed model, giving them a greater degree of control over their portfolios and a reduction in management fees. MDRC investigated the relative satisfaction or dissatisfaction in more than 2,500 clients of private banks and wealth managers, spanning the very largest investment management houses to niche private banks. Mr Williams said: “We always publish the UK report earlier in April. In September we will release a much bigger study which covers most of western Europe. We have been conducting the study for the last 10 years or so. “The climate has changed quite a bit. We have seen the emergence of distinct segments: these days people with a million pounds are not that uncommon.”