EXCLUSIVE: Wealth Managers Must Track Clients' Big Life Events - New Study

Tom Burroughes

5 February 2014

Wealthy clients part ways with their wealth managers during significant life events such as moving home or starting a new job when nerves are on edge, according to a survey of how people engage with managers by , said.

When asked if there were specific circumstances leading to their relationship with their main advisor, some 16 per cent of respondents cited the failure of a former financial advisor as the reason for starting with a new one. This rises to 19 per cent in Asia-Pacific; for those with assets over $4 million, they are even more willing to sack an advisor and start over (25 per cent).

The report said it is significant that the breakdown in a relationship is usually allied with other lifestyle changes, suggesting that people become edgy during big moments in their lives. For example, a fifth of those polled sought out a provider when buying a home, while an equal share found their current relationship during a career change or promotion. These figures are even higher in Asia-Pacific where the share of those seeing a new wealth manager during such periods (home, career change) stood at 31 per cent and 26 per cent respectively.

Spread it around
The desire to diversify assets is a major factor in people seeking their main wealth management relationship, the report found. Wealthy people typically have three or four such relationships each. The highest is an average of 4.8 per cent in Asia, and down to 2.1 in Americas; Europe’s wealthy typically have 3.2 providers.

Among other findings, the study showed that in the Americas, the main wealth manager oversees 60.4 per cent of the total investable wealth of a client; in Europe and Asia, that is 46.1 per cent and 45.4 per cent respectively.

Asia’s wealthy explore relationships with a higher number of firms before settling on a provider, the study shows; on average, they screen 4.6 managers. In Europe and the US, they screen 3.2 and 2.1 managers respectively.