Customer Acquisition and Retention in European Wealth Management 2006

• Datamonitor's proprietary Wealth Management Market Leaders Survey 2006 analyzes the opinions of wealth managers across Europe.
• Provides unique insight into how wealth managers assess customer acquisition, client relationships and customer behavior.
• Wealth managers across Belgium, Denmark, Finland, France, Germany, the Netherlands, Norway, Sweden, and Switzerland were surveyed.

• Provides insight into the relationship between clients and their wealth manager;
• Identifies which acquisition methods are most effective across Europe;
• Analyzes what makes clients choose their wealth manager, and what makes them leave.

CHAPTER 1 CUSTOMER ACQUISITION AND RETENTION

The significance of customer acquisition in wealth management is undisputed

Obtaining new clients is seen as the most important driver for revenue growth in 7 out of 9 countries

The situation is different in the Netherlands and in Switzerland

Strategic initiatives are centred on customer acquisition and retention

Improving CRM and support systems has been identified as the most pressing issue

Some countries also experience a strong focus on new distribution approaches

The transition from old money to new money is clearly visible

Wealth managers consider entrepreneurs and corporate executives to offer the greatest potential for their services

The importance attached to different customer groups is strongly affected by country characteristics

Investment performance is seen as secondary for customer acquisition, but key to customer retention

Wealth managers consider qualitative rather than quantitative aspects to be the key influences on their clients

Errors and a lack of proactivity drive clients away from a wealth management service

Referrals from existing clients have unmatched weight in customer acquistion

Wealth managers ranked intermediaries and employees the second and third most effective techniques for customer acquisition

Acquiring new customers through employees is not common in all countries

CHAPTER 2 CUSTOMER BEHAVIOR AND CLIENT RELATIONSHIP

Client relationships are only moderately strong

The majority of wealth managers are experiencing declining customer loyalty

Most client relationships last a minimum of 5 years

63% of wealth managers control on average less than 50% of their clients’ wallet - high time to work on cross-sales

Clients are demanding more contact, more information, but have not become more active themselves

The amount of time wealth managers need to spend with their clients is increasing

Clients want to know more, but don’t do more

Client behavior is still marked by the recent stock market corrections

Clients are currently most interested in protecting their asset base

Supplementary data

All countries

Methodology

Survey methodology

Further Reading

Global Wealth Management SPP

Datamonitor Asia Pacific Wealth Management SPP

SPP writing team

LIST OF TABLES

Table 1: Question: “What will most determine revenue growth in the next two years? Choose up to 3 responses.”

Table 2: Question: “What strategic initiatives are you planning or implementing in the next year? Choose all that apply.”

Table 3: Question: “What client types offer the greatest potential in the next five years? Choose up to 3 responses.”

Table 4: Question: “In your experience, what are the most effective customer acquisition techniques? Choose up to 3 responses.”

Table 5: Question: “In your experience, what are the key influences that determine a client’s choice of wealth manager?”

Table 6: Question: “To what extent do you agree with the following?”

Table 7: Question: “How long has your client base, on average, been with you?”

Table 8: Question: “Approximately what share of your clients' wallet do you think you have on average?”

Table 9: Question: “To what extent do you agree with the following?”

Table 10: Question: “What are your clients most interested in today? Choose up to 3 responses.”

LIST OF FIGURES

Figure 1: Obtaining new clients will be the single most important factor determining revenue growth in the next two years

Figure 2: Strategic initiatives will centre on customer acquisition and retention

Figure 3: New money will continue to be the focus for customer acquisition in the next 5 years

Figure 4: Swiss wealth managers see the greatest potential in inheritors and wealthy expatriates

Figure 5: Most responses as to the most likely reasons for a client to leave a service are for too many errors and small mistakes

Figure 6: 59% of wealth managers think customer loyalty has decreased

Figure 7: The majority of wealth managers control less than 50% of a client’s wealth

Figure 8: Wealth managers strongly feel that clients are demanding more contact now than 2 years ago

Figure 9: Clients are becoming more active as to how their wealth is being managed