Benchmarking the Delivery of Wealth Management

For decades financial institutions have expected to flesh out their banking relationships with their clients to also serve their wealth management needs, but progress generally has been disappointing.  Banks have lost market share of household investable assets, while both traditional wealth management firms and disrupter lenders have encroached on the lending business.  And the promised stabilizing impact of fee income from wealth management has lagged behind expectations.

Some view this disappointing history as a result of how banks have organized their wealth management businesses.  Typically, as banks began offering wealth management services beyond traditional fiduciary services, they bolted on these businesses to existing structures, resulting in redundancy, internal competition, and a patchwork of client experiences.  Now some firms are taking a fresh look at delivering wealth management services, examining: 

• Who should serve the different wealth management needs of different kinds of clients?
• Is there a better way to acquire clients? service them?
• Can advisor-facing and client-facing technology be integrated so that the client wealth management journey is optimized?

For the past few years, the Kehrer Wealth Management Study Group has brought together some of these firms that are trying to find the right balance between the strengths of the traditional wealth management models and new approaches to integrating the front, middle, and back offices of their wealth management businesses.  We have also conducted a market scan to inventory the various approaches firms are initiating and provided case studies of these initiatives.  Now we believe that there is enough activity that we should start benchmarking the performance of the integrated wealth management platforms against the traditional, siloed approach.  Only with ongoing benchmarking will we be able to identify and refine best industry practices.