Investors Are Seeking Alternatives to Private and Priority Banking
I am not sure how private and priority banks are addressing the investors’ search for alternatives, but when the press and the government are lashing out harshly against the institutions, and clients want to run from the banking institutions, what are they doing and where are they going?
Certainly this is not a secret but there are options and alternatives available – and clients are presenting very creative solutions.
We have spoken with many ’fat wallet” investors (ones with over $1 million to invest) and there are typically 2 responses we hear from them:
1) “I don’t want my brokers making any investment decisions. I want a purely transactional relationship. I am knowledgeable enough to make my own decision.”
2) “Investing is all too complicated. I want someone who I can trust to make the right decisions.”
If clients don’t want “value added services” (item 1) and are shying away from people they don’t trust (item 2), where are they going? Here are some alternatives they are taking:
1) Online and discount brokerages. Low fees and some value add. If you feel you are as knowledgeable, the lure is to pay $12.99 per transaction. Online Brokerage’s Success
2) Pre-negotiated, set fees with banking institutions
3) Third party advisers (who are typically ex-bankers) such as AL Wealth in Singapore, who act as “middle men” between the investment institutions and the investors. These third party advisers charge an annual percentage and build their relationship by being neutral.
(One priority baking client has mentioned to me that he requested his relationship manager to put his commissions on the line. If he promises a ‘guaranteed” return, then his commissions will be paid and will be scalable. If the investment is in the red, then he loses his commissions and fees. For some strange reason, the relationship manager did not win this clients business.)
How to avoid this? Build the right skills and trust for your relationship managers with your Singapore and Asia Pacific banking clients, so that they don’t have to consider alternatives. For more information see Trust in Sales.
Trip Allen, Team Egyii, Singapore
Tags: Bank Training, People Skills, Personal Development, Trust
June 22nd, 2009 at 9:06 am
[...] much so that many of the clients are switching to other institutions and private wealth management [...]