During the recent financial crisis high net worth clients have become more aware of the risks involved in working with a variety of Investment Advisors. As a result, wealth management firms have turned a renewed focus to improving risk management and in doing so minimizing constraints on the business. Firms have taken steps toward improving liquidity, operational, investment management provider risks and imbedded safeguards into their overall business strategy.
A recent survey * by Pricewaterhouse Coopers stated that 62% of its wealth firms surveyed reported that their risk management frameworks have been in place for less than five years. And, although firms have placed it high on their near term importance list, they have not adequately taken steps to communicate these safeguards to their clients and prospects.
In selecting new advisors today, risk management is a significant concern for most high net worth individuals. Firms, who have taken steps to mitigate and manage risk, should be incorporating it into their brand message at every turn. New business presentations, marketing materials, websites, newsletters an d other communication forms should be emphasizing the proactive steps taken by the firm to protect clients from the variety of a industry abuses they have witnessed within the past few years. A competitive advantage for a wealth management firm is no longer based on performance and price, but a renewed emphasis on safety, risk management, organizational transparency and integrity in relationships. In order to compete in this new market, firms will need to reposition themselves as to how they fulfill those new priorities of the high net worth investor.
* Pricewaterhouse Coopers Global Private Banking and Wealth Management Survey 2009
