This publication exclusively carries research from Wealthmonitor looking at what UK-based entrepreneurs want from wealth managers and private banks.

No matter how sophisticated technology becomes in this age of “clouds”, tablets and tweets, one-to-one contact is highly valued by entrepreneurs when dealing with private banks, according to one of the takeaways from a new report from Wealthmonitor and provided exclusively to this publication.

A recent survey of UK-based business owners who have experienced a significant liquidity event in the past 12 months (such as the sale of a firm) led Wealthmonitor to spell out five recommendations for an industry chasing a share of this wealth. (The report was issued in association with Gulland Padfield, the consultancy to private banks.)

The proposals are to segment clients in more detail; develop a referral network; educate clients, choose the right mixture of marketing channels and retain the personal touch.

The study, called Finding The New Wealthy: Strategies For Private Banking To Engage Entrepreneurs, found that 74 per cent of respondents are “positive” about private banking, while 18 per cent are negative and 8 per cent have no strong views either way.

One finding that jumps off the page is how many entrepreneurs and business owners – if the findings are representative nationally across the UK – know only one or two leading wealth management brands, and in these cases, most respondents gave the private bank divisions of high street brands. This suggests the industry has a big task in raising brand awareness effectively.

Another finding is that while most of the respondents said their needs have “substantially” or “moderately” changed in the last 12 months, hardly any of them have changed their advisor as a result of such developments; in cases where needs have changed “substantially”, three-quarters of respondents have retained their advisors. Some 35 per cent of respondents said their needs have changed "substantially"; 20 per cent said "moderately changed" and 45 per cent had no change.

“Either their existing advisor has met these new needs but a more likely explanation is that many are unaware of the alternative providers who might suit their new circumstances better,” the report, which includes interviews with some prominent bankers, says.

Two-thirds of those respondents who said private banking is not appealing to them said this was because they could see no value in it for them.

Case studies

The report carried a case study, for example, with Sue Oriel, managing director of Firecracker Films; it said she made it clear that the wealth industry was not keeping pace with needs of such businesses. Giving her impressions, she said of the sector: “It feels old and fusty to me. Marketing materials seem old fashioned – and while it is generous to ask me out to a two-and-a-half-hour lunch, the average person who has wealth doesn’t have that time to spare. There’s a kind of mystique to private banking, almost as it if means some sort of financial `butler’. This is the wrong kind of signal for what I want.”

Asked what she wanted from wealth managers, she replied: “Ultimately, if you’re a wealthy person, you feel that what you should be able to do is buy convenience for yourself. It seems that nobody ever asks you what you want, they just tell you what they offer.”

In another set of comments, Charles Hoffman, managing director for HSBC Private Bank UK, says the approach that he thinks works best for a bank is where a banker “explains” rather than “sells”. He also argued that the industry could learn from professional services firms about how to engage with clients and build relationships. “Some professional firms have designated business development teams to help set up meetings and contacts for relationship leads.”

He also said: “They say it takes even years to become a trusted advisor. Anyone who thinks you can short-cut the process of building relationships is, in my view, mistaken. I think there are ways to identify people at a key moment when they might need help. But, certainly at the top end of the market, it can be a long, long game.”

Finally, James Edsberg, senior partner at Gulland Padfield, spoke about issues such as client referrals and how these can be handled better. “For a referral to work, the existing client needs to recommend the institution as well as the RM. We see firms making greater efforts to explain to people what it would be like to join them as a new client,” he said.

To view another example of a Wealthmonitor report published exclusively by WealthBriefing, click here.