In addition to systematic relationship building and client development, the main engine for business growth in the wealth management industry is new client acquisition. Acquiring clients represents a high art in itself and, like any art, it takes exceptional skill and influence. It involves a combination of interpersonal, technical and strategic mastery – from converting leads into clients and building a rapport with them all the way through to product knowledge and the ability to analyse data to create personalised financial plans. 

The high cost of acquisition 

For a wealth manager, finding the grand masters of the art of client acquisition (relationship managers, that is) is difficult and expensive, and so is participation in the exclusive events – the “openings and exhibitions” – where they can show their work to potential clients. Client acquisition costs (the number of new clients acquired as a function of the sales and marketing cost) vary depending on market and client segment, but they can easily soar. 

High acquisition costs may be worthwhile when it comes to acquiring ultra-high-net-worth prospects (UHNWI) with significant business potential. However, it is less economically viable for prospects in the lower wealth bands, especially when wealth managers are tightening cost discipline to cope with revenue pressures and spiralling operational costs, and adjusting their budgets for marketing and sales downwards.

What role can digital channels play in increasing the efficiency of wealth managers’ acquisition efforts? Some private banks have been dedicating increasing resources into managing their digital presence in recent times, by investing more heavily in company websites and social media accounts. An engaging presence on digital channels such as these is a “hygiene factor” in today’s competitive environment. However, unless these channels are professionally managed, the likelihood of generating leads through them is the same as finding a Rembrandt at the local market.

Collaboration with external vendors

Financial intermediaries, generally more strapped for resources than private banks, are likely to derive greater efficiency in their client acquisition efforts by drawing instead on the possibilities offered by strong digital infrastructures, backed by AI computing power, to personalise products and services. The availability of large amounts of customer data and platforms with open APIs will offer access to a greater variety of solutions, among other things, by allowing the selection of investment portfolios based on individual customer preferences.

Given the specialised expertise and sophisticated analytics required, it is unlikely that financial intermediaries would be in a position to manage these digital infrastructure internally. One option is therefore to assess the value of outsourcing the management of digital channels to specialised agencies after a rigorous due diligence process. 

Technology vendors and data providers offer opportunities to outperform other “artists” by offering smart tool support and structuring the client acquisition process for high-net-worth individuals. The solutions offered by vendors can help support and accelerate some of the key steps in client acquisition: 

• Lead discovery: Leverage intelligent engines to continuously screen the press to identify liquidity events and other signals to find promising leads
• Lead profiling: Enrich the basic information about the lead with curated data about the source of wealth, net worth, business activities, interests and risk aspects
• Network analysis: Use internally stored data (CRM) and external databases to perform a comprehensive network analysis that allows the identification of potential introducers
• Pitch preparation: Customise the pitchbook based on all the acquired information (e.g. include a section about the firm’s investment expertise in the lead’s area of interest) and share it with the prospect via a secure digital channel

Expanding the possibilities of client acquisition

Just as the grand masters relied on their skilled human hand, so complex issues will continue to rely on human judgement and advice and the human touch will remain a key differentiating factor improving trust and loyalty. As the most skilled artists have always recognised, however, a willingness to experiment with new tools and technologies can elevate even the most skilled practitioners to new level of mastery. Now it is time to combine the analogue techniques of the “art of client acquisition” with scalable client intelligence tools in order to increase sales efficiency and create room for more high-quality face-to-face meetings with better qualified prospects.