View more on these topics

Boom at the top

How much time do you spend with clients who do not remunerate you for the time you spend with them? We all want to deliver top-quality customer service, as we are, after all, a people business. Many of you will have built up your businesses through providing your clients with the advice and guidance they have needed over the years. You will have benefited from referrals from satisfied customers recommending friends and family and building up the size of your client bank.

A big client bank used to be a nice problem to have but now it is becoming increasingly difficult in our 1 per cent world to justify the time we spend face to face advising clients and harsh choices need to be made.

In my last article on wealth management, I outlined what wealth management means for the UK advisory market. I looked at the future evolution of the market into the Sandler-driven vanilla product solutions and the growth in the wealth management advisory market.

This time, I want to look at the main drivers and aspirations behind wealth management clients, and at a concept sweeping the US of the “largest cheque”.

Who is wealth management for?

There are 11 million people in the UK between 45 and 60 – the baby boomers. They represent 11 per cent of the UK population but they own 70 per cent of the nation&#39s wealth. In 20 years time, it is projected they will own 85 to 90 per cent of the disposable income in the UK.

Conversely, as we entered the new millennium there were 11.2 million people under the age of 15 in the UK. By 2040, this will have decreased to 8.7 million.

Wealth management is not for everyone, it is for those who understand the value of advice and who need an holistic approach to the management, growth and safeguarding of their financial well-being. It is these baby boomers who have the wealth and it needs managing.

This need will grow. Over the last two decades, consumption by Europe&#39s over 50s has risen three times as fast as the rest of the population. Over 50s buy 80 per cent of all top-of-the-range cars, 50 per cent of skincare products and, not surprisingly, 80 per cent of all leisure cruises.

They are the generation first exposed to consumerism in the UK after the drabness of the early post-war years. They understand the value of their wealth and want it safeguarded and to see it grow.

What this means is that those baby boomers need and look for advice, not covering just one area but for their overall portfolio and they will want not only an initial in-depth analysis but also ongoing service, advice and solutions tailored to their own specific needs and dreams.

They will also want an ongoing, interactive dialogue and relationship with their financial adviser. Not for them an annual review and perhaps a top-up to a pension policy. This is about wealth accumulation and then as life stages move, wealth security and access to capital. This is what wealth management is about.

What will be required is a range of products and tools that can allow advisers to meet the needs of the wealth management market and allow a cost-effective service to be provided for clients. As wealth is accumulated, clients will be looking for advice on building their pension pots, maximising investment opportunities and constructing an investment portfolio that accurately reflects the risk profile of the individual client.

Instead of retrospectively trying to justify choices of funds, especially where they have performed poorly, advisers will need tools which bring clients into the decision-making process. A vital part of maintaining an ongoing relationship with wealth management clients is ensuring that they understand why the final selection has been made.

As the relationship develops, wealth security becomes vital, as does the desire to pass this through the generations.

The average life expectancy is growing and we spend as much as a third of our life in retirement so wealth management becomes a fundamental need for those whose income requirements fluctuate. Once again, regular ongoing investment and pension advice is a key requisite of this market.

As a business evolves, client banks will need to be segmented and tough decisions made. In American financial services, a concept called the “largest cheque” is sweeping the market. Wealth management is an integral part of many advisers&#39 businesses and to do it effectively means concentrating on a smaller number of higher-net-worth clients (the baby boomers we discussed) and providing a service that reaps the rewards to compensate for the less time or no time spent on the other clients who used to make up the business.

It is a leap of faith but as we move to a directional and wealth management advisory split of the market, many clients you spend valuable time with will be best served by the Sandler suite. They will not be lost to your business, as they will be dealt with in through e-solutions and products.

You can then decide who you need to spend most time with and the wealth management approach will allow you to justify and reward you for the work you do and the service you provide for clients. These are your largest cheques.

Next time round, I will outline the top five opportunities for wealth management clients.


Close Bros release deal for estate planning

Close Brothers is to set up a wealth management equity-release product with Isle of Man Assurance. The product is designed to help people to manage their estates for tax purposes and is described by a source as an equity-release/estate management product. It is being launched with the backing of Equity Release Services, which has designed […]

Product matters

The new Ucits III rules are likely to see a new raft of products which can take advantage of the extra investment opportunities. One such fund is the new target return fund from Credit Suisse. This is a fixed-interest fund which uses a “multi-strategy” approach to try and obtain Libor plus 2 per cent. These […]


“Yes. I think IFAs want to simplify their lives with the complications of compliance and searching the market and so on. Many IFAs have their own panels anyway, so they would just be streamlining them.”Pravin Bhatt, Bhatt & Associates “I don&#39t know, I&#39m a small IFA and I&#39ll be staying independent. I plough my own […]

Mortgages plc gets set for move on prime market

Sub-prime lender Mortgages plc is looking to move into the market for prime mortgages in the latter half of the year. The company currently does some near-prime lending through the Mutual Collective, a collection of building societies which buy new asset classes from Mortgages plc on pre-agreed terms. It also offers buy-to-let and right-to-buy products […]

Partied out and penniless

December has left me destitute. My piggy bank lies broken and empty, my lunchtime meal deal feels like an extravagant expense and I’m down to the Bountys in my box of Celebrations. But I won’t mourn my dearly departed pennies. Between buying gifts for loved ones (then deciding to keep them for myself) to treating […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm