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Client Retention Elevates to Top of Mind with HNW and UHNW Investment Firms

InvestEdge, Inc., a rapidly growing provider of wealth management solutions to large HNW and UHNW investment firms, continues to gain momentum with banks, trusts, and advisors seeking ways to retain their most valuable clients.

The growing emphasis on preserving top-tier relationships has gained significant momentum as turbulent market conditions prevail. This represents a shift in focus for many firms that previously relied more heavily on attaining new clients for growth. A primary indicator of the trend is evidenced by increased investments in technologies that enable firms to better service clients post acquisition.

“Common asset gathering tools used during the courting phase—like those for financial planning and asset allocation—have and will continue to serve a critical role in the wealth management process,” explains Jeff Cowley, vice president at InvestEdge. “But virtually every firm we speak with confesses they have a hard time delivering what was pitched during the sales process. For example, they struggle to consistently manage and monitor portfolios against the defined investment strategy. Likewise, many lack reporting tools to accurately demonstrate the value-add of the firm.”

The initiative to improve service is often initiated by high-value clients who express dissatisfaction. Inconsistent, late, or error-laden performance reports are tangible examples of what is often a bigger problem.

A recent study conducted by the Institute for Private Investors further confirms advisors have reason to be concerned. Published results from 61 UHNW respondents indicate 34.4 percent plan to replace their managers this year. Across the board, they gave their managers’ performance a median ranking of four out of a possible ten.

Despite these and other dire reviews in recent months, not every investment firm will be impacted negatively. For some, this is an unprecedented opportunity to capture the assets of disillusioned investors who have received substandard service from their wealth manager.

According to Robert Testa, a noted industry analyst with Cerulli Associates, “Managers that succeed are those who recognize safeguarding relationships involves much more than portfolio performance. But more importantly, their clients realize the same. While sound investment decisions will always be the basic standard against which firms are measured, the ability to manage portfolios as promised and effectively communicate the results cannot be understated. This precept is particularly pronounced in tumultuous times.”