As the wealth management industry becomes commoditized, firms need to create competitive differentiation through their greatest value-add, client service. Information provides a common foundation for core client service requirements and technology improves its accuracy and availability.
The efficiency of the financial market is challenging the value of active investment management. The internet and other technologies provide investors with information and tools to manage their own portfolios. And, the market is flooded with firms competing for the pool of investors. To ensure their services are not marginalized by commoditization, and to rise above the competition, it’s critical that firms focus on their unique value-add.
Why do your clients come to you instead of managing their own investments or working with the firm around the corner? Because you understand the market better. You help develop and support their individual financial objectives. And you keep them informed along the way. The expertise and service you provide sets you apart. If you place a high value on this distinction, you are not alone. In fact, more than one-third of capital markets firms say the quality of customer service and relationship management is the single thing that distinguishes them to clients. And research firms like CEB TowerGroup agree, recommending that firms differentiate through technology that enhances client service.
So, where do you start? Overhauling your entire IT infrastructure is likely not an option. But taking a foundational approach focused on your core requirements and biggest challenges can have a great impact at an affordable cost. The deliverables of an optimal client service model—market knowledge, investment insight and client communication—all require information. And as information grows in volume and complexity, reducing the time managers spend gathering and organizing it for analysis is a mounting a challenge. Therefore, financial data management is a good place to start.
A financial data management solution streamlines, automates and regulates the flow of information between people, partners, providers and systems. The right solution integrates investment accounting and reporting to manage all of the processes associated with receiving, normalizing, aggregating, evaluating, storing and delivering information when and where it is needed. It enables your firm to harness, control and leverage information in support of client-centric initiatives—and that is a solid foundation for competitive differentiation.
To learn more about information-driven client service, attend my upcoming presentation on July 20 at the Opal Family Office and Private Wealth Management Forum in Newport, Rhode Island. Learn more about attending here.
Author Kim Hoover is Chief Strategy Officer for QED Financial Systems. He can be reached via email at email@example.com.