Wealth managers are facing an empathy gap, according to a new report from SEI.

A surprising 62 per cent of investors surveyed said wealth managers’ ability to provide clients with a personal relationship was inadequate.

The findings are part of the outsourcing firm's latest global study, The Relationship Business: Expect the Unexpected, which examined whether actual client experiences match what wealth managers claim to provide. While most of the wealth management firms and half of the private clients polled agreed on the definition of empathy – defining it as wealth managers listening, understanding, and delivering their clients’ needs – the actual client experience provided by wealth managers was not seen as meeting that standard.

According to the study, investors also have decreasing confidence in the ability of wealth management firms to put investors’ interests at the center of their business.

When asked how wealth management firms can best achieve empathy, both clients and wealth managers recommended enhanced client profiling, enhanced relationship management skills, improved communications, and client-centric compensation policies. Developing company best practices and industry-wide standards to meet clients’ relationship needs were also mentioned.

Many wealth management firms have begun to implement client-centric models, execute in-depth client review meetings and discussions (40 per cent of wealth managers) and exhibit positive behavior and ethics (23 per cent), according to the study.

“Undeniably, there is much work to be done in the banking industry in order to restore clients’ faith in the ability of wealth managers to listen and meet their needs. Trust will only be restored when firms recognize that investors judge client service on their personal relationships with their wealth manager, in addition to the culture, ethics, and overall behavior of the firm,” said Jim Morris,  senior vice president for SEI’s Global Wealth Services. “This research provides a tool wealth management firms can use to evaluate necessary behavioral changes at the individual wealth manager, organizational, and industry levels. Only through change can wealth management firms hope to boost investor confidence in the ‘relationship business’ and deepen their client relationships.”

The Relationship Business: Expect the Unexpected is the fourth paper in a series of five topic-of-interest papers exploring the changing relationships between wealth managers and clients. The findings are the result of interviews comparing the views of 250 private clients and wealth management providers, including banks, independent trust companies, and investment advisors.  A full version of the report, published by SEI in collaboration with Scorpio Partnership, can be seen here.