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Strike up the brand

In my last article, I highlighted the problems of creating a successful wealth management service and the dearth of outstanding role models. I also discussed some of the challenges facing companies operating in this market, particularly the delivery of a compelling relationship model and the need to maintain a sales culture.

Accepting that criticism is the easiest of observations to make, a few positive observations are now due. It is also time, perhaps, to suggest a few pointers to the future.

At the higher end of the market, there is obviously more than one model that can work. But, for a national brand to work successfully, there really are some prerequisites. The building of relationships is one and excellence in operational delivery is almost certain to be another.

So, what models are working out there? As I suggested in the last article, a number of IFA-based propositions are making good progress, particularly where the proponents have an unshakeable belief in what they are doing.

Some of the fee-based offerings clearly demonstrate this but, at this stage, they cannot be held up as national brands. We also know that creating a national IFA brand that retains the virtues of its smaller brothers and sisters is remarkably difficult. Unfortunately, bigger operations rarely share such a passion for their chosen business model. The degree of analysis, politics and caution all combine to dilute many offerings into a process that simply lacks conviction. This can be seen both by clients and staff. Fear of taking a wrong turning outweighs any determination to take the high ground.

St James&#39s Place is perhaps one example of a conviction that has not wavered. Even accepting that recent results have not been so good, its belief in a relationship model – based on the partners&#39 concept – has been remarkably successful. Clients are prepared to commit to a long-term interface.

The challenge, of course, will be to maintain such a model as margin squeeze continues. Also, the lack of a multi-channel dimension may have to be reappraised.

So what of other models? The bancassurers surely have the greatest advantage but have seemingly made limited progress. Most have a similar and traditional theme, combining the building of relationships and the beginnings of a multi-channel approach.

In some cases, this has been linked to innovative fund management models (such as Merrill Lynch and HSBC) but somehow they do not always seem joined up or have simply not captured the public imagination.

At the risk of invoking much controversy, I would suggest that many lessons could be learned from the old Equitable Life model.It is easy to forget that the front-end model was, without doubt, streets ahead of any rival.

While the margins may well have been artificially low over a long period, there is no question that, on the criteria of brand, customer proposition, productivity and professionalism, Equitable Life was leading the pack. Add to this excellent back-office administration and a call centre to dream about (high percentage of FPC3 qualifications, excellent conversational skills, customer recognition triggers and remote channels working with face to face) and the perfect square was almost in place. Oh, and of course, a major presence in the businessto-business sector.

Even more frightening, then, to realise how fragile it really was.

So, what of my views for a future wealth management model that carries national presence? Well, the bigger players have got to learn from the top-end IFAs and have to demonstrate greater conviction than previously seen.

As an example, fee-based advice frightens the life out of most players. Why? Well, market research reports that, when asked, even high-net-worth consumers do not want to pay fees. Can I suggest that asking clients in this way will inevitably attract bring this response? However, most top consultants, if backed by a strong and trusted brand proposition, would be able to put forward a strong and convincing customer argument.

Furthermore, the conviction that fees can only be linked to independent advice – which I have never fully accepted – is about to be overtaken by events. CP121 genuinely should enable some bigger players to dominate the future while others watch.

As they say, at some point in any business cycle, a mould has to be broken and, if broken at the right time, real market leaders emerge.

A further example involves consultant remuneration and image. Many different models exist and, within the direct providers, commission is probably now the exception rather than the rule.

This particular mould has at least been partially broken and the challenge is now to create the sales ethos that sets one model apart from the others. I suggest that brand values and sheer conviction in the offering are as important here as with any customer proposition.

Another example is call-centre linkage. This really is an Achilles heel and simply shifting the emphasis of a current service or commodity sales operation will be very difficult indeed.

Equitable set out with clear intent, with its call centre specifically dedicated to trading at the top end. Every aspect of staffing, process and training had to meet the objective from day one.

Quite frankly, attempting to simply retrain a current call-centre mentality is almost certainly doomed to fail.

Finally, we should look at sales culture. This is a critical element and we have to see a customer passion that exudes into every facet of the organisation. Exuberant words should be used in this context and excellence has to be the goal but not just in the sales side of the business. A joined-up culture across the entire organisation has to be in place – no exceptions and no tolerance of shortfall.


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