How can advisers hyper-personalise their client offerings?

financial advice personalisation EY wealth management

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Financial advisers and wealth managers need to exceed their clients’ desires for personalisation across different client segments, a new EY report writes.

The 2024 EY Global Wealth Management Industry Report identified 10 underlying challenges that wealth managers must overcome between now and 2030.

In particular, the paper called for greater customisation when it comes to advisers’ client service models as client preferences shift towards greater personalisation, known as “hyper-personalisation”.

“Clients’ financial and wealth advice needs vary widely according to their circumstances, needs and expectations, but the relevance of hyper-personalised advice in strengthening client relationships and client perceived net value is generally undisputed,” the EY report wrote.

“Demand for relevant hyper-personalisation is growing in every client segment.”

It described the “strategic opportunity” advisers have to enhance their value proposition and redesign their advisory processes to closely align with clients’ goals. Firms should also work with their support staff and relationship managers to align this approach across the whole of the company beyond the adviser client meeting.

According to EY, the strategic and financial benefits of hyper-personalised services include:

  • Stronger long-term client profitability and overall financial performance than firms with more generic advice models.
  • Enhanced customer loyalty and greater likelihood of clients consolidating their assets with their lead wealth provider.
  • Higher yearly numbers of new clients per relationship manager.
  • Materially improved positioning to address the intergenerational wealth transfer.

Firms should also work with their support staff and relationship managers to align this approach across the whole of the company beyond the adviser client meeting.

“Rebalancing incentive structures for front office staff away from simplistic short-term targets and towards
more balanced strategic client objectives that promote sustainable profitable growth.

“Equipping relationship managers and front office support teams to understand clients’ specific needs, leverage
advice best practices for clients and advisers, align advice with client key life goals and tailor suggested solutions
to personal investment preferences.”

Breaking down the client segments

Based on the firm’s analysis, it highlighted four key client segments where advisers can elevate the value of advice via tailored personalisation and bespoke offerings.

Mass affluent

For mass affluent clients, who generally have over 10 per cent pre-tax income in long-term savings or investments, building and maintaining financial health is key.

“Financial planning is the relationship anchor. Advisers act as coaches who empower clients to navigate their decisions, harness a modular offering and achieve their financial goals. Delivering this client-centric model at scale is the greatest challenge for firms,” the report stated.

Core affluent

Core affluent clients typically have a high income tier and liquidity event originated household wealth. They are similar to the previous model, but advisers focus more on wealth advisory mentoring.

“Holistic financial planning is focused on wealth aggregation with long-term goals forming the core of the advisory relationship. Again, scaling is a key challenge.”

For both the mass and core affluent groups, providing meaningful tailoring and value-added advice at scale, rather than falling back on “product push”, is a real challenge, EY stated.

High-net-worth (HNW)

Advisers working with HNW clients, who have achieved financial independence, are focused on protecting and expanding their long-term wealth.

The report wrote: “Advisers should act as trusted fiduciaries, service clients’ best interests and provide unbiased advice. A robust self-service platform for self-directed clients is a key feature and can also effectively act as a feeder.”

Ultra-HNW

Finally, advice for ultra-HNW clients is centred on adding value through complex multidisciplinary subject matter expertise, such as personal legacies, foundations or trust arrangements.

“The adviser acts as a trusted professional, combining strategic thinking, analytic skills and clear communications with the ability to orchestrate multiple actors and solutions. Managing costs to serve is a key challenge.”

Ultra-HNWs expect highly bespoke and complex advice, EY stated, meaning an adviser’s greatest challenge when working with such clients is gathering the necessary range of legal, tax and investment expertise while keeping costs under control. 

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AUTHOR

Submitted by David Williams on Wed, 2024-05-15 10:24

'Hypersensitised' advice is likely to be successful if based on a more hypersensitive approach to each person. This is achieved through person longevity planning to frame their potential future and commit to appropriate action prior to more specialised subject engagement processes.

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