Last week WealthBriefing asked the question “Do management consultants add value to wealth management businesses?” in the Poll of the Week. ...

Last week WealthBriefing asked the question “Do management consultants add value to wealth management businesses?” in the Poll of the Week. Respondents had the chance to agree, disagree or state that it was too early to tell. The results were remarkably evenly balanced. Forty-one per cent of respondents both agreed and disagreed with the proposition, leaving 18 per cent thinking that it is too early to tell. Sebastian Dovey, managing partner of wealth management consultants Scorpio Partnership takes a positive view of the result. “I prefer to adopt the optimistic ‘glass is half full’ perspective on this result,” he told WealthBriefing. “Consultancy is a difficult concept to define at the best of times and this result appears to reflect that it is a subjective issue. “The key is to ensure that individual clients are satisfied with their outcomes. This is more likely with firms that have structured processes for providing advice and research so that throughout the assignment client's expectations are fully managed,” he said. The chief executive of a prominent UK private bank told WealthBriefing: “While consultants can be useful for particular projects it is very dangerous to outsource to consultants the core private banking management function of deciding which clients to address with what products in which markets”. Management consultants clearly have their supporters and one of the main drivers for their use is the growth imperative in the wealth management market. “The large number of parties valuing consultants is an indicator of the huge fragmentation of the industry in which the largest participants themselves have a small market share,” said Ray Soudah, director of Millenium Associates, the Swiss-based M&A advisors. “The drive for growth on top of all the other challenges is the main reason management seek help to achieve this difficult task - organic growth especially in non home country markets”. Ian Woodhouse, a partner at IBM in London, believes there needs to be a clear vision understood by both parties. "The right conditions are having a shared and clear view between the client and the consultant/advisor as to what the clients needs and requirements are, how they will be met, and the value that the consultant/advisor is expected to bring.”