Clients of wealth managers are becoming increasingly mobile, with their assets spread over various countries. In a whitepaper called "Wealth Management and Private Banking – Global market, global clients, but local specificities," Deloitte, in collaboration with Efma, make recommendations for change based on a survey of 75 institutions around the world and through interviews with industry experts.
Although many wealth managers and private banks are already operating on a cross-border level, many engagements are not streamlined. Deloitte suggests that instead of the current popular model of serving one geographical area, with a "one-stop-shop" model of operations, relationship managers should specialize in one aspect of the value proposition —such as wealth engineering—to cover a particular type of client across multiple locations. Clients are no longer restricted to their physical location, and give priority to searching for the best quality services, no matter the localization.
Importance placed on digital channels
When it comes to serving cross-border clients, the respondents agreed that local physical presence is not always required. In fact, remote services (website, mobile) represent a large share of their existing channels. Nevertheless, survey respondents did not seem to fully grasp the importance of the digital capabilities. Many factors, including personal relationships, are perceived as much more critical. Wealth managers may therefore not be prepared for the forthcoming trend that will make the digital factor essential to an effective interaction channel mix.
Benjamin Collette, Deloitte EMEA Wealth Management and Private Banking Co-Leader, says: "Players should take digital maturity and client perception of personal relationships into account when going forward with their business models. A new generation is emerging that places a high importance on web platforms and accessing information from wherever they are located at any time of the day."
Regulatory compliance still represents a big hurdle
In the European Economic Area (EEA), the "Free Provision of Services" (FPS) principle allows wealth managers and private banks to offer their products and services across the 31 countries of the economic area. While the general principle is that member states may benefit from a harmonized regulatory framework, local regulatory authorities may choose to impose stricter rules at the national level. The landscape outside the EEA is even less harmonized, resulting in wider discrepancies among countries.
"A cornerstone of expanding investment business into cross-border markets is to gain a deep understanding of regulations on a local level," concludes Benjamin Collette. "Only then will wealth managers and private banks capture the 'new client' who has interests in many different locations."
Read more about the survey results and recommendations on Deloitte Luxembourg's website: http://www.deloitte.com/lu/wealth-management-report .
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