Surveys

Concierge Is Nice But Doesn't Make Clients Switch Banks - Study

Editorial Staff, 20 October 2021

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A study of HNWs by BNY Mellon Wealth Management shows that a majority of clients count on their banker to provide wealth security over the growing list of concierge services wealth managers are offering. Perks can ice the cake, but only when it is perfectly baked.

New findings from a BNY Mellon Wealth Management private banking study suggest that concierge services aren’t enough to lure wealthy clients over to a new banking provider. Rather HNWs are more concerned about preserving and protecting their wealth than using concierge offerings and lifestyle gifts, a study of 300 wealthy individuals with at least $5 million in total assets found.

The most important services for long-term client retention are having a dedicated private banker (41 per cent), attractive interest rates (36 per cent), and up-to-date technology (27 per cent), the survey revealed.

Much has been made of the growing list of extras private banks can offer clients to differentiate themselves, but are they genuinely cutting through? Services on offer can range from concerts, curated vacations, and celebrity experiences to exclusive venue access to global marquee events, which in the case of the latter has made a welcome return this year.

The wealth manager's study suggested that such perks can tip the scale but only if the core services are operating satisfactorily.

The research conducted in tandem with Brown Yardley Research also asked wealth holders to choose one provider over another based on a list of extra incentives.

Results show complimentary access to premium benefits attracting 12 per cent, generous rewards programs attracting 13 per cent, concierge services attracting 12 per cent, and 11 per cent among those surveyed chose travel perks. These were the top four “extras” chosen by the group out of 15 attributes.

“The ability to help a client preserve and protect their wealth to achieve success when they least expect it, is the ultimate concierge service,” Rick Calero, head of banking and lending at BNY Mellon Wealth Management, said. A high level of service should integrate all facets of a client's wealth, including investing, borrowing, spending, managing taxes and costs, and protecting what they have, he said.

“Our approach to concierge services is less about lifestyle extras and more about giving each client the kind of financial analysis and solutions that investment banks give to their biggest corporate clients,” Calero added.

The survey underscores the premium clients place on private banking services that are dedicated to securing their wealth. If private bankers are doing their job on that score, they have their client’s attention, the group said.

“Making money for a client is the ultimate differentiator. Once a client is satisfied with the financial service provided, it’s incredibly difficult to lure them away.”

The US-based wealth manager carried out the study in January and February this year to gain a better understanding of the preferences of ultra-high net worth clients across wealth management, including demographic trends, client behavior, and services used to provide insights and benchmarks.

The firm manages around $300 billion for clients across offices in the US and internationally.

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