Wealth Management and Private Banking

Wealth Management and Private Banking



Expert: Roopalee Davy & Homy Dayani-Fard, EY

Facilitator: Annie Catchpole

Key message 

The challenge for wealth management professionals is to match individual client demands to the right set of financial solutions. Doing so successfully means understanding that one size does not always fit all, making good wealth management segmentation crucial. 

As the Baby Boomers move into retirement or later life living, are advisors ensuring that their relationships extend to the rest of their family? Are they involved in estate planning? Similarly, following on from the recent inflated focus on Millennials, are firms paying enough attention to Generation X, or ‘midults’ – those clients in their 40s and 50s? 


  • Segmenting client bases should reflect buying behaviours, needs and future aspirations.
  • Regulation guides segmentation strategy due to the pressures on organisations to comply with new ways of conducting business – this opens up opportunities for firms to realign how they segment client bases.
  • Internal systems and processes can be re-structured to facilitate a transparent method of working.
  • Demonstrating excellent service is key when working with high net worth individuals, but integrating digital can be a huge value added when differentiating against competitors. 

Key themes 

A major challenge facing wealth management firms today is the pace at which client demands are changing. Different types of clients have pushed for different standards and experiences, demanding that the financial advisors with whom they work keep up. 

And in fact, for the good of their customers and themselves, wealth management firms can and must develop a more sophisticated approach to segmentation in order to drive future long-term profitability. 

Yet, in a world where the client experience bar has been set by the likes of Amazon, Uber and Google, and strategic activity is determined by the increasing cost pressures, wealth managers often feel at a loss as to how they must tailor their advice and strategies to account for the various client profiles they  serve. 

Initial discussion centred on the question ‘How do you find the right clients, and what do you offer them once you have them?’ What ensued was a thought-provoking discussion questioning the extent to which we ignore or over-analyse specific generations of clients. 

The wealth management industry traditionally segmented individuals en masse, utilising age and wealth levels as key indicators. While this approach has worked successfully in the past, the modern-day clients’ needs and values require a much more dynamic approach. 

Delegates of the roundtable expressed interest in understanding how to integrate behavioural analysis into their segmentation strategies, as this could better enable them to anticipate future demand and develop value-based solutions. Yet, as one delegate rightly mentioned “Segmentation for the sake of segmentation is irrelevant…” 

Indeed, the segmentation of clients must strategically reflect not only their needs and ambitions, but the direction and positioning of the firm. With this in mind, the roundtable agreed that at a high level, segmentation can be guided by four core principles: regulation, internal processes, the monitoring of value and service, and data technology. 

The roundtable agreed that while there is no one way to accurately diagnose client needs, fact-finding conversations at the start of each client relationship are requisite. These fact-finding exercises can come in the shape of simple conversations or fully-fledged client experience surveys. 

Of course, refining the depth to which wealth managers understand and predict client needs does not need to be relegated solely to new relationships – these ‘KYC’ attitudes can be adopted at any point in a client relationship, so as to reaffirm and strengthen trust and transparency at all levels. 

Embedding segmentation within a wealth management organisation can also lie in developing a technological environment that supports advisors in becoming more time-efficient. 

Integrating technology platforms which enable flexible model-based portfolio construction and provide advisors with varied tools, offer wealth managers the resources necessary to execute more effective segmentation strategies. Furthermore, technology systems can allow advisors to collect, manage and analyse vital client data. 

But what does this mean for advisors’ least profitable clients – do you need to ‘fire’ them if the firm can no longer deliver an appropriate service to them according to their newly developed segmentation?

Delegates confirmed that in these situations, brand image must be carefully guarded, as turning clients down can lead to bad press. As a result, transparency with regards to the situation or ‘pricing them out’ can be solutions to consider. 

Advisors must be matched to clients falling within their segmentation realm, based on commerciality, advisor experience and client needs. As one individual participating in the discussion explained: 

“They are receiving the absolute best within the firm for what they can afford. We have a bigger toolkit but smaller margins – it is just that the level of service is lower for a $1 million client than it is for a $10 million client, as there’s less customisation… so you have to account for that.”

 Delegates agreed that all products on offer are simple commodities – it is the way the advice is delivered and represented that differentiates offerings from the rest. As a result, wealth firms must play to their strengths and only allocate advisors to those clients that match their skill-sets and past experience. 

Remuneration can also help advisors begin to think in segmented, strategic ways. Enhancing and developing a workforce that can produce wealth strategies that help clients feel less stereotyped and categorised according to wealth levels or age, will ultimately bring in more revenue and larger legacy client bases.

 Advisors must prove they can challenge stereotypical assumptions about specific client groups and create bespoke strategies reflecting each and every individual situation. 

Whilst a majority of delegates quickly agreed that they find it difficult to envision a world in which the wealthiest of clients would turn to robo-advice for the entirety of their wealth management, they agreed that hybrid models integrating the benefits of both robo-platforms and face-to-face advisor contact would probably pave the way of the future. 

So, what does this hybrid model look like? High net worth individuals today want consistency, trust, transparency, service and convenience – they are very willing to pay if these areas demonstrate to be of the highest quality. Performance – according to some of the delegates – comes after these key areas, as they recognise that the market fluctuates. What they want is a consistency in the service levels they receive from financial firms: 

“It is all about building relationships that see you through…” 


  • Current segmentation methods (based on wallet-share and age) greatly limit the success with which wealth managers can work with their clients.
  • Segmentation enables firms to focus on both the quality of their client servicing as well as their business development efforts.
  • The flexibility to segment and serve customers according to their specific behavioural traits, backgrounds and requirements is crucial in today’s changing marketplace.