Building a customer value framework in wealth management

Overview

Introduction

This thought leadership report presents a framework for the consideration of a wealth manager's customer base. It seeks to identify the key drivers and indicators of value within a customer base as a mean of helping wealth managers and private banks to identify the customer groups that have the potential to drive revenues and profits.

Scope

• Presents a customer value framework for the wealth management industry as developed by Datamonitor's Global Wealth Service team.
• Highlights a range of potential segmentation strategies for consideration by wealth managers.
• Contrasts four different wealth management business models based on a customer value assessment.
• An issue-based blue-sky piece of analysis applicable to all global wealth management markets.

Report Highlights

Wealth managers have long recognized that certain clients are more valuable than others, normally based around very important but somewhat simplistic measures such as the value of their assets. However, the concept has rarely been extended to a more comprehensive assessment of customer value and its financial and strategic significance

Wealth managers commit substantial resources to acquiring, servicing and retaining their clients. This makes it critical for them to appreciate which clients represent the most value to them such that they can align service efforts and distribute costs appropriately.

Wealth managers must move away from defining acceptable clients based upon an arbitrary threshold level of investment assets. Instead a more complex set of criteria should be adopted, that reflects the fact that clients with large outstanding liabilities or income, for example, may be of equal/more value than those with large asset holdings.

Reasons to Purchase

• Provides key insights into the determinants of the value of a customer's relationship with a wealth manager.
• Utilises a customer value analysis to identify the opportunities, threats and critical success factors for four different business models
• Identifies a range of key strategic considerations and actions for wealth managers to improve business profitability.