Concierge services are not a new idea. They’ve been offered in various forms by most private client, focused businesses at some point or another. Yet today they are enjoying a renaissance in the form of a sophisticated business development tool to gain greater insights into a clients’ tastes and spending habits.
New era of client ‘stickiness’
“There’s been a steady increase of wealth managers offering concierge services like ours, called Ten, under their own brand”, said Alex Cheatle, CEO and co-founder of Ten Lifestyle Group. He cites RBC and Scotia in Canada, Merrill Lynch in the USA, HSBC (Jade) in Hong Kong and Coutts in the UK, as examples of the organisations they are working with. This concept, as explained above, is not new, it has happened many times before in wealth management, later to be killed off as shareholders lose patience with the cost and intangible returns, so why do it again? “Based on our research,” says Cheatle, “providing concierge brings an increase in clients who then remain with the wealth business and are three times more likely to stay than those not using concierge.” Other wealth managers, like Barclays, with their successful Infinite credit card and its much-lauded concierge programme validate Cheatle’s research.
Tim Badham, CEO and founder of Innerplace Concierge who works with major banks agrees and adds “The reason for this stickiness, could be due to many factors but the rise of social media has undoubtedly helped. Seeing high profile events that are hard to access, makes lifestyle concierge services more compelling.” Requests, which might include booking a table at a hot ticket restaurant like Amazonico, tickets to a sold-out show or an upgrade at the Four Seasons, can be sorted like magic. As an example Citibank who call their mass affluent service Citigold Wealth Management, offer clients access to prestigious and unique events, such as Global Citizen which was held at the Royal Albert Hall last year bringing together activists, musicians, artists and world leaders to celebrate and recognise the work that’s being done globally to fight extreme poverty.
Revealing client preferences
“Clients are far more likely to talk about lifestyle services than financial products and this drives acquisition and advocacy”, adds Cheatle. The other benefit to wealth managers is that they can “connect better with their clients because they can learn from use of the concierge to easily develop a deeper understanding of their likes, dislikes and interests.”
Examining money – financial concierge
A less known about offering from the USA is ‘financial concierge’ which is defined as “multi-faceted management of financial matters or a go-to financial overseer” where the picture of a client’s affairs becomes even clearer and in minute detail, even down to their coffee habits. The financial concierge becomes like a strategic book-keeper analysing spend across individuals in a family in order to offer meaningful, ongoing advice. Families benefit from a handle on their spending, but more importantly it empowers them to make better decisions, for instance when putting together a trust, to understand true lifestyle needs of different family members and make more accurate provision for them.
What do I own and where?
In addition, “As well as being a useful means of getting the younger generations involved in financial and family matters at both micro and macro level, it gives access to specific areas of a family’s wealth to apportion it to them”, explained Victoria Blackburn, senior manager at JTC Private Office based in Luxembourg. Blackburn adds “financial concierge can mean providing individuals and families with a complete overview of their assets and liabilities, both bankable and non-bankable, wherever they are in the world”. “This type of service while it does not provide regulated professional wealth management is an extremely valuable tool for families who wish to have a bird’s eye view of all that they own”, she explained. “It’s this type of concierge service which has become increasingly valuable given that today many families are international, with a vast array of cross-border assets and liabilities.”
Having access to this information and conversations can open up a vast array of opportunities for wealth managers from offering new investment opportunities to meet their evolving tastes and risk appetite, to bringing on board the next generation.
Other ‘sticky’ services – philanthropy advice
Another business development tool offered alongside traditional wealth management is philanthropy, helping clients to pursue passion and ESG projects. UBS has twenty-one dedicated philanthropy advisers in eleven locations on hand to assist wealthy individuals with maximizing the impact of their philanthropy.
Just as lifestyle purchases or choices offered by lifestyle concierge are spoken about more than finances, UBS has found that philanthropy also serves as a positive advocacy tool for the bank with referrals for help with philanthropy being gained from clients’ friends and family members. This is sound thought leadership as research shows that 66 per cent of today’s millennials see social investing as a way to express their values, and 88 per cent of women want to make an impact through investing; which helps UBS engage with prospective and current clients on a meaningful level.
So, despite, previous lackluster encounters for wealth managers offering concierge services, this time around, patience is proving to be a virtue and as Cheatle explains it will bring prospective clients closer and stop wealth managers losing them. In a FinTech challenger environment, for wealth managers, this must surely be like access to the winning numbers.