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AAFM™
American Academy of Financial Management
China Economic and Wealth Management
Summit
Beijing - November 11th - 12th 2004
Wealth
Management in China and Asia
Wealth
Management - It's personal™
By Prof. Byrnes and John Jarrett
As China
banks and financial institutions engage in the lucrative wealth management
sector, high-net worth individuals in China are going to start being
besieged with phone calls and contacts from financial planning and wealth
management sales teams all vying for their investment capital. What
are the key issues for Financial Planning Managers and technical investment
consultants to focus on in this growing sector? How can you establish
profitable client relationships in a market where relationships are
measured in years and not minutes? How can you establish trust quickly?
Personally
we've had the experience of sometimes receiving daily calls from Financial
Planners and the like to try and capture our investment dollars. Let's
put ourselves in the client's shoes for a moment. As a financial planner,
within moments of meeting a client in a face-to-face scenario, you expect
a potential client to disclose their annual salary, their current net
worth, their monthly budget and personal information about their children,
retirement planning or personal goals. How personal can you get? In
a market like China where such information is not easily disclosed,
how can a financial planner succeed in a market that requires client
trust to be established as early as the first contact with the potential
client?
For clients
in China who are not used to being engaged by financial planners or
wealth managers, there will definitely be a reluctance to provide such
personal, detailed information. Trust is going to be the single most
important element in the near term in the opportunity engagement with
a potential customer. How do you establish trust in the short-term and
at the same time deliver long-term profitable relationships? Here are
a few tips:
1. Trusted
Brand
An establish Brand will be very important in the short-term in China.
How will local brands play out as compared with global brands and private
banks that have global experience? How can local brands capitalize on
the marriage of local experiences with global best practice? Local institutions
are going to have to invest in substantial training of their staff to
demonstrate that the 'team' has the same skills as a global competitor.
This will involve having staff who understand thoroughly the investment
process, offshore and local investment markets and key taxation, retirement
and wealth preservation issues. In addition, strong marketing commitment
to presenting a very professional image is essential. Fact sheets photo-copied
on poor quality paper are not appropriate for a customer who you want
to invest US$100,000. Of course, local institutions can capitalize on
their local brand presence to leverage these types of products to their
wealthier clients. This provides the clearest advantage for local institutions
to utilize ahead of the global competition.
2. Independence through Product Mix
A mix of assets that combine local funds with strong historical performance
and offshore products, such as US or global equities, which allows more
aggressive exposure to areas like tech and Bio-tech stocks, mean that
clients can have some flexibility rather than just being limited to
local products. Obviously there may be limitations in investing outside
of the local market for some investors, but in any case local institutions
should be preparing to offer products other than those just in their
own portfolio because of the obvious limitations. Typically, banks and
financial institutions have tended to focus on wealth management as
a sales process for existing products. However, as clients gain sophistication,
this proves to be a short term gain. The more powerful long term opportunity
lies in providing your clients with a mix of the best information for
their circumstances and the best products to suit their needs, regardless
of where that product is sourced from. Clients will trust you more if
you appear to provide independent advice.
3. 'Template' client models
If clients don't want to disclose their net worth and current financial
situation, then don't force them to. First establish the client's risk
profile or tolerance and then based on an investment 'range' use a fictitious
case study of a similar client, to narrow down investment choices for
the new client. By using a case study a client can simply say - "No,
I don't wish to invest that much in equities…" and you can further
narrow the portfolio options until you have something suitable. Work
up some template client models that you can use as the basis of a discussion
with potential clients in an initial contact engagement. Indeed, it
is very useful to go on and model the expected results of the investment
mix suggested with these case studies. It is then only a short step
to working on the client's own needs.
4. Strong pre-sales and after-sales commitment
This is still even a problem in established markets like the US. When
you get the opportunity to deliver for a client, keep contact with them
and deliver high-value service, without expectations. Here are a few
tips:
a. Follow up quickly after your first meeting and be thorough in your
response to the client.
b. Give them the information they ask for and don't overwhelm them with
product information or 'sell' that is not directly applicable to them.
c. Once you establish a client relationship through a sale, up-sell
carefully with only very well targeted opportunities. Remember the client's
needs.
d. Celebrate your wins with them and help them to see that you are here
as their advisor, not a commission based salesperson.
e. Nothing builds trust like great product performance and great after-sales
service. Set this up and you have a client for life.
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Reserved 2004 ©
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