"In 2008, more wealth management executives are discovering that it's the wealth manager rather than investment generalist or traditional advisor who will lead their firm to profitability," says Bob Skea, chief operating officer, worldwide field operations, NorthStar. "Wealth managers generate twice the assets and three times the average net income of investment generalists. Firms that want to gain competitive advantage need to examine their operational processes to see if they are truly offering the proactive, holistic advice and service that today's demanding wealthy clients expect."
Many advisors who think they are wealth managers actually fall short, according to a Dow Jones survey conducted in October 2007 by CEG Research. The survey found that 42.5% of advisors described themselves as wealth managers, but only 6.6% used the consultative approach of a "wealth manager," as defined by the survey. The 2008 landmark NorthStar Wealth Management Trends Survey confirmed this trend. Respondents identified key differences between wealth managers and traditional advisors or investment generalists. A successful wealth manager uses a more holistic, proactive, relationship-oriented approach to managing client wealth. The NorthStar survey also revealed 88.3% agreed that a strong wealth management platform is critical to growth, yet 75% of respondents say wealth managers are frustrated with their current software tools. The survey results point to holistic, integrated technology as the primary tool that can enable wealth managers to reach their highest potential.
"The NorthStar survey shows that the number one way to scale wealth management businesses is to focus on the productivity of the wealth manager, whether through overall or client-facing process improvements," says Collin Cohen, president, NorthStar. "The responses were clear. If you want to operate as a wealth manager and provide holistic advice, your best investment is an integrated desktop. And in this volatile financial market, with investors looking for solutions to declining portfolio values or potentially seeking new professional advice, wealth managers are clamoring to find ways to retain and grow their base."
The NorthStar Wealth Manager Challenge Quiz allows wealth managers to diagnose areas where they need to improve in order to gain competitive advantage in the wealth management industry. Four key processes are integral to growing profitability and productivity:
â¢ Acquire - Allows wealth managers to close more clients and improve the client acquisition process. Best-in-class capabilities include complete client profiles, custom risk questionnaires, targeted prospecting, integrated or built-in analytics, and custom proposals.
â¢ Plan - Helps wealth managers provide more holistic and longer-term planning. Best-in-class capabilities include holistic financial wealth plans, actionable investment policy statements, and personalized asset allocations automatically based on client profile data.
â¢ Manage - Enables wealth managers to proactively and holistically manage client wealth. Best-in-class capabilities include single product catalog, advanced product comparisons and selection based on suitability and other client criteria, ability to quickly construct compliant portfolios, access to online client hierarchy management tools, and 360-degree client views.
â¢ Report - Allows wealth managers to provide frequent and meaningful communications to clients, increasing client retention rates. Best-in-class capabilities include personalized consolidated reports, single report and proposal generation system, automatic alerts, and client and performance data consolidation and delivery to the wealth manager's desktop.