How much of our resources and energy are we really prepared to invest in the one-and-only solution for any sustainable wealth management practice: competent, truly client-centric professionals? By Kees Stoute
How far are we really prepared to go to resolve one the key dilemmas in our industry?
We all would love to see the industry convert from being predominantly product-focused and limited in value-add, to being client-centric, needs-based and consequently highly value-adding. We would embrace the consequential higher dependence on more stable and predictable recurring income rather than on the current transaction income and commissions.
The business environment for wealth management firms is challenging. Markets are difficult; the costs of doing the business have risen tremendously; technology enables new entrants, such as robo-advisors, to further heighten the competitive challenges, etc.
It has become tough to survive. A number of players have even already decided to pull out of Asia altogether.
Many of the threats and challenges for the wealth management industry are really difficult to manage. Yet the lack of professional, confident, value-adding professionals seems manageable.
Being relevant
To address the issue of competency and capability in wealth managers adding value to clients, we need to teach practitioners to confidently enter a client meeting without a product in mind.
We must help them to be more relevant and able to have a conversation with their clients about the things that really matter to them: what are their dreams? What are their worries? Are they living a happy life? How do they manage their wealth now? Etc.
Only once we dare to have these types of conversation, will we be able to help our clients to make their wealth instrumental for the life they want to live. And this is precisely the type of conversation that forms the basis for long-lasting, value-adding relationships.
Back to the first question: are we – institutions and individuals – really prepared to invest the time and money into training?
Enhancing competence
In Singapore and Hong Kong, many practitioners have Continuous Professional Development (CPD) requirements. According to these, they are expected to study one or two hours per month. Although not a lot, for many this obligation is considered a serious and demoralising burden.
Even executives are reluctant to add pressure on their staff. To quote one: “They all have full-time jobs. It is not realistic to expect from them to spend too much of their valuable time on training.”
In short, this suggests that they are so busy doing the wrong things, that they don’t have the time and energy to learn the right things.
If having higher-calibre professionals is one of the answers to coping with the difficulties in this industry and to increasing recurring income, then why not make a sincere effort to get the practitioners to the desired level of competence?
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