Pivotal CRM - Wealth Management by PivotalCRM


The wealth management industry is undergoing change on multiple fronts. This paper shows how wealth management firms can use client relationship management (CRM) strategies and technology to build relationships as trusted advisors, maximize share of wallet, and increase productivity, contributing to top-line and bottom-line revenues while also gaining a wealth of usable insight.

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									                                                                                             W H I T E
                                                                                             P A P E R
Essentials of CRM for Wealth Management
Empower Advisors with Client-Centric Tools

        Executive Summary
        A monumental shift is currently underway in wealth management, as transactional
        “brokers” make the transition to being true “advisors” and the service model
        transforms from a static traditional approach to a dynamic one driven by client
        needs. To make this change about more than just terminology, however, wealth
        management firms need to embrace client-centric strategies at a profound
        level, re-engineering their processes, embedding consistent best practices
        within their systems, and empowering advisors to build deeper, more enduring
        client relationships.

        In this white paper, learn how wealth management firms can use client relationship
        management (CRM) strategies and technology to build relationships as trusted
        advisors, maximize share of wallet, and increase productivity, contributing to
        top-line and bottom-line revenues while also gaining a wealth of usable insight.
             The Changing Face                                                assets in fee-based accounts steadily grows,4 the wealth
                                                                              management business is becoming more product-
             of Wealth Management                                             agnostic and relationship-based.

             The wealth management industry is undergoing change              This combination of changes is transforming the industry.
             on multiple fronts.                                              The transition brings with it a wealth of opportunity, but
                                                                              it also necessitates some fundamental rethinking of
             Many of the forces of change in the industry are                 the way wealth managers do business. The changing
             overwhelmingly favorable. Both the number of wealthy             market demands a shift in focus to relationship-building,
             individuals worldwide and the value of their financial           client retention, growth in share of wallet, and more
             assets are increasing: in 2006, 9.5 million people globally      “advisory” interactions and positioning, but this is not
             held more than US$1 million in assets—an 8.3% increase           a transformation that can occur successfully without
             over the previous year—and the wealth of high-net-worth          considered intervention and support. In effect, it amounts
             individuals (HNWI), which totaled US$37.2 trillion in 2006,      to a whole new service model, and one that most wealth
             is expected to balloon to $51.6 trillion by 2011. Part of this   management firms don’t currently have the technology or
             growth comes from emerging markets, but it is supported          process infrastructure to support.
             by healthy growth in developed economies; in the US, for
             example, the HNWI population expanded by 9.4% in 2006.1          A recent report from Capgemini and Merrill Lynch put the
                                                                              problem thus:
            The potential client base for wealth managers, therefore,
            is expanding. At the same time, its attributes and needs            As the needs of HNWIs become increasingly complex, and
            are changing. As the baby boom generation retires, their            the choice of providers grows, wealth management firms
            focus is shifting to managing their finances in retirement          are realizing that the quality of their service models is closely
                                         and the eventual transfer              tied to their continued success. The relationship between
                                         of wealth. Meanwhile, the              an advisor and client is built on trust, integrity and results.
                                         wealth of a new generation             But that is only part of the equation. For that relationship
As the percentage of                                                            to work effectively, it must be backed by a quality service
                                         of tech-savvy “millennials” is
client assets in fee-based               growing—there are now more             model. Leading firms understand this and are investing in
accounts continues to grow,              people under 35 than over 54           platforms that give their advisors the best tools to serve
                                                                                the interests of their clients and allow them to adjust to the
the wealth management                    making a six-digit household
                                                                                ever-changing marketplace.5
business is becoming                     income,2 and the collective
more product-agnostic and                income of “Generation Y” is          In other words, it is time for wealth management firms to
                                         expected to surpass that of          embrace the new service model and ensure they have the
relationship-based.                      baby boomers by more than            tools to support it.
                                         $500 billion within 10 years.3

             Age and life stage are not the only client attributes that are
             in transition: clients are also becoming more sophisticated
                                                                              Embrace the New Model
             and demanding investors, with escalating expectations of         The new model for wealth management is client-centric
             their wealth managers in terms of both service level and         and service-oriented. It is founded on a strategic
             product range. Investors have more wealth, but also more         approach to extending the duration and value of the
             choice, and the increasing ease with which they can move         client relationship. It is a transition from transactional
             their business to other firms presents new challenges for        engagements to advisory ones, driven by client needs.6
             wealth managers.
                                                                              If this does not sound new, it is because wealth
             Concurrent with these changes in client base size and            management firms have over the past several years
             attributes, there have been internal changes within the          begun positioning themselves as client-centric and
             wealth management industry. The move to a fee-based              their employees as “trusted advisors,” recognizing
             business model is fundamentally changing the dynamics            the transition that is underway. Unfortunately, this
             of wealth management. As the percentage of client

                                                                               4. Bienfang, Matthew. “The New Age Retail Advisor: Tools to
                                                                                  Support Tomorrow’s Field Force” (PowerPoint presentation).
                                                                                  TowerGroup. 2006.
              1. Capgemini & Merrill Lynch, “World Wealth Report 2007.”
                                                                              5. Capgemini & Merrill Lynch, p. 2.
              2. Center for Media Research. “6.2 Million Young-With-Money
                 Households.” URL: http://www.centerformediaresearch.com/     6. PricewaterhouseCoopers, “Unprecedented Opportunities,
                 cfmr_brief.cfm?fnl=070301.                                      Plan Your Approach: Global Private Banking/Wealth
                                                                                 Management Survey 2007: Executive Summary.”
              3. Van Dyke, James, & Garascia, Jean M. “Think You
                 Know Generation Y? Think Again.” American Banker,
                 August 10, 2007.

                                                                                                                          Pivotal CRM | White Paper   1
            transformation has in many firms been in name and             how their systems will need to be adapted to fit the new
            marketing only, as studies indicate the underlying            business reality. Just as the wealth management industry
            changes required to support such assertions have              has undergone rapid change in recent years, the CRM
            simply not taken place.                                       landscape has also evolved, and today’s CRM systems
                                                                          are better equipped to support the wealth management
            Not surprisingly, however, lip service alone is not           industry’s specific needs under this new business model.
            succeeding in delivering the results wealth management
            firms are seeking, and market research suggests that          Whether your firm is searching for its first CRM system
            at last, leading firms are beginning to put in place the      or is looking to better support a client-centric business
            processes and systems required to effectively internalize     model with a new or existing CRM solution, this white
            and execute on a client-centric strategy.                     paper will help you understand what wealth management
                                                                          firms can achieve today using the right CRM system to
          So what does this new model look like? It begins with           support a customer-centric strategy.
          a commitment to getting to know and understand the
                                      client and his or her needs,
                                      beginning at the point of           Really Know Your Client
                                      prospecting, before the
As wealth managers look                                                   All wealth managers are familiar with “Know Your
                                      individual even becomes a
to embrace a client-driven            client. It is about gathering
                                                                          Customer” (KYC) forms and regulations, but it is
business model, they must                                                 perhaps indicative of their weak familiarity with their
                                      comprehensive information
                                                                          clients that collection of such information has to be
consider whether their CRM            about the prospective client
                                                                          mandated by regulators.
systems are up to the task.           and using this information to
                                      more effectively engage them        Research indicates that client relationship managers at
                                      from the outset, winning their      wealth management firms have quite high opinions of
          business through demonstrated relevance, understanding,         their customer intimacy, with 80% asserting that they have
          and affinity. Once the business is won, it is about             achieved the coveted status of “trusted advisor” with their
          developing a thorough understanding of client needs             clients. Yet other data doesn’t appear to support this
          and interests and using this knowledge to develop their         confidence. Almost 50% of the same group regards their
          portfolio—an approach that stands in marked contrast to         knowledge of clients’ extended family issues as limited to
          the traditional approach of assigning clients to                moderate, and only 41% of wealth management business
          pre-determined investment strategies and products               managers feel their advisors have good knowledge in this
          based on static one-dimensional classes depending               area. In fact, an alarming 25% of advisors acknowledge
          on AUM or risk profile alone. Most importantly, a client-       that they are not even familiar with their clients’ overall
          centric engagement model involves a commitment to               financial goals. As PricewaterhouseCoopers notes in
          building and managing a strong client relationship over         its summary of these survey results, “Very substantial
          the long term, deepening and expanding the relationship         progress needs to be made before [advisors] can
          rather than assigning an investment strategy and then           truthfully claim the attributes of being trusted advisors.”7
          stepping back.
                                                                          As with any relationship, trust begins with getting to know
            The technological framework for achieving this new model      each other. Sadly, far too many wealth management
            is customer relationship management (CRM). As a wealth        firms limit this knowledge to a basic understanding of
            management firm’s core client-facing front-office system,     assets and stated risk tolerance. This information is
            the right CRM system and configuration is integral to         simply not enough to engage the client in a compelling
            collecting the prospect and client intelligence that drives   advisory capacity.
            this more personalized engagement, implementing the
            processes that ensure effective relationship management,      Using a CRM system, wealth management firms can
            and leveraging this knowledge and these processes to          ensure that collection of client intelligence is a systematic
            maximize client value and loyalty. Consequently, CRM          process woven into every interaction, even before the
            constitutes much more than just a software purchase to        individual becomes a client. Beginning with the prospect
            a wealth management firm—it is the foundation of their        database, the CRM system can be used to collect and
            move to a client-centric, advisory business strategy.         build out meaningful prospect records. While at first
                                                                          only limited details about a prospect may be available,
            While many wealth management firms already have               recording them within the system enables the firm to
            some form of CRM system in place, most of these               take action on building out the profile, researching
            were implemented when the firm was operating under            prospects and aggregating information about them to
            what is rapidly becoming an obsolete service model. It        create a more useful picture—one that will help win their
            is therefore essential that as wealth managers look to
            embrace the new model, they consider whether their CRM
            systems are up to the task, and at a minimum consider
                                                                          7. Ibid., p. 44.

                                                                                                                  Pivotal CRM | White Paper   2
             business. Further research on specific prospects can           strategy that is driven by unique client needs, not pre-
             even be assigned as a task within some CRM systems.            determined categories. The result is a more satisfying and
             Marketing-list contacts can also be entered into the           personalized experience for the client that positions
             system to create a single, integrated database of targets      the firm in a much more “advisory” capacity.
                                          and prospects. Advanced
                                          CRM querying tools can then       A good CRM system will enable a wealth management
Advisors need a deep,                     be used by the marketing or       firm to create a truly deep, holistic view of the client.
holistic view of clients and              business development team         This view should include not just demographic and risk-
                                          to segment the database into      tolerance information, but a complete view of the client’s
their overall value to the firm.
                                          meaningful groups, allowing       household and extended family relationships, as well as
                                          highly personalized and           connections to other relevant parties, such as custodians,
             relevant messaging to be delivered to them. For example,       lawyers, trustees, CPAs, and other clients. The profile
             the firm might segment its prospect database by asset          should make it easy to record and understand client
             size, but also by geography, profession, source of wealth,     objectives, life stage, and positions, as well as interests
             interest areas, or other factors. Many CRM systems             both personal and financial. On the financial front, the
             include marketing automation components that allow             profile should offer both at-a-glance and in-depth views of
             such campaigns to be created or sent directly within the       client accounts and holdings, incorporating both internal
             CRM system, personalizing content such as name and             and external data to allow a comprehensive view of the
             address using the CRM profile. More advanced systems           firm’s share of wallet. This perspective should also convey
             will allow for sophisticated conditional content, replacing    the full extent of the client’s relationship with the rest of the
             subject lines and entire graphics or paragraphs of text, for   firm—for example, the wealth management unit should
             example, based on the recipient profile.                       be aware that the client’s business has a loan with the
                                                                            firm’s commercial lending arm. Furthermore, the profile
              As each interaction with a prospect occurs—whether it’s       should indicate the client’s influence over other accounts
              a phone call, e-mail, marketing campaign, online enquiry,     and should track any referrals attributable to the client. All
              or in-person interaction, and whether initiated by the        of this information, when brought together, paints a truer
              prospect or the firm—it can be documented within the          picture of the client’s overall value to the firm.
              CRM system, creating a comprehensive record of the
              prospect’s history with the firm and response to various      As important as building out the client profile is, it is
              approaches. In addition to tracking the effectiveness of      equally important to recognize that client information and
              different marketing and sales techniques, this allows the     relationships aren’t static. Client profiles should never be
              wealth management firm to build out the prospect profile      viewed as “completed,” because there is always more
              further with each interaction and gradually develop more      to learn, and client priorities and interests shift over time.
              advanced segmentation and behavioral targeting. When          CRM must be integrated into the company culture and
              a new or existing prospect becomes a lead through a           interactions to the extent that each interaction is seen
              marketing-campaign response or other expression of            as a new opportunity to learn more about the client or to
              interest, many CRM systems allow firms to pre-qualify the     validate and update the information already in the system.
              lead according to custom criteria and automatically route     A vast database of stale information can be as injurious
              qualified leads to the appropriate employee for follow-up     to the relationship as too little information, so efforts must
              according to territory, product, AUM, specialization, or an   be continually made to keep this valuable data fresh
              advanced combination of factors. This ensures that skilled    and accurate. With a good CRM system, prompts and
              advisors’ time is not wasted on the wrong prospects and       reminders to obtain or update various pieces of data can
              that hot leads don’t go cold while waiting to be sent to      be woven into the automated workflows and interactions,
              the right person, helping ensure the firm doesn’t lose        making data collection and hygiene an integrated part of
              business to faster-acting competitors. Furthermore, it        your client-centric processes.
              ensures wealth managers are kept focused on the right
                                                                            Even if all this client information exists in your firm today,
              accounts. This increases overall productivity and reduces
                                                                            it is worth considering where it resides. A staggering
              the cost and length of the sales cycle.
                                                                            amount of this information may rest with individual
              Developing rich prospect profiles gives advisors an           advisors—whether in their printed or electronic files,
              advantage from the very first interaction with a prospect,    written notes, or heads. This generates risk for the firm:
              enabling them to tailor and personalize their approach        should the files be lost or the advisor leave the firm, the
              and inspire trust and confidence from the outset.             client knowledge—in fact, the entire relationship—can
              When the prospect becomes a client, the advisor is            be jeopardized. Storing all client data centrally not only
              also in a good position to engage the client and flesh        creates a form of “corporate memory” that persists
              out their profile to create a more comprehensive view.        over time; it also helps the client relationship transcend
              Unlike traditional “wealth band”–based approaches,            individuals and accrue to the firm more broadly, as any
              this enables the advisor to take a truly informed and         employee in any location can give the client equally
              considered approach and propose an investment                 informed and consistent service.

                                                                                                                     Pivotal CRM | White Paper   3
             Of utmost importance is how easy a wealth management           the most nimble and tech-proficient advisor. And when
             firm’s client data is to access and use. If client data is     productivity is critical, this simply isn’t acceptable.
             dispersed across multiple files and systems, it can be
             virtually impossible for an advisor to get a comprehensive     To solve this problem, many wealth management firms
             picture without hours of research and reporting—let alone      are looking to integrate as many systems and information
             to use it in responding to a client or management inquiry      sources as possible into a single intuitive interface
             on the spot. Without a 360-degree client view, risk and        for their advisors. This gives them the best of both
             opportunity may be equally difficult to identify. That’s why   worlds: the “best of breed” tools and information from
             as many wealth management firms work to implement a            the best internal and third-party sources, all with a single
             client-centric business model, their key area of focus is on   access point.
             the advisor workstation.
                                                                            The most natural system to use as a unifying hub in this
                                                                            capacity is the CRM system. CRM systems are designed
             Make the Advisor Desktop                                       to be the single source of aggregated client information,
                                                                            and they make excellent portals for integrating client-
             a Relationship Hub                                             facing tools and data. Wealth management firms should
                                                                            first and foremost look for CRM systems that incorporate
           Advisors are at the front lines of client-relationship
                                                                            the broadest set of strong features—encompassing
           building, and their ability to cultivate these relationships
                                                                            marketing, sales, and service—to eliminate unnecessary
           and make them more profitable is increasingly dictated by
                                                                            point systems, but they should also seek systems
           the information and tools at their disposal. The faster they
                                                                            with high flexibility to allow for integration of additional
                                          can access and understand
                                                                            systems and incorporation of data from third parties or
                                          the data they need, the
CRM systems are the                                                         other specialized internal systems. Some CRM systems
                                          better—and more efficiently—
                                                                            fill this role particularly well, incorporating external
most natural solutions to                 they can serve clients. This
                                                                            applications or links in context—for example, one-click
use as unifying hubs for                  translates not only into higher
                                                                            access to a map program or ticker information within
                                          client satisfaction and more
advisor desktops.                         client confidence; it also
                                                                            the client file to display client-related directions or stock
                                                                            information. Again, flexibility is vital here, to allow the
                                          directly affects an advisor’s
                                                                            wealth management firm to deliver a system that best
           productivity and ability to manage their book of business.
                                                                            fits its advisors’ work styles and confers a competitive
           An efficient advisor can manage more assets and more
                                                                            advantage. Systems the firm might wish to integrate into
           clients, and as the number of new clients and size of their
                                                                            the CRM hub could include portfolio accounting systems,
           wealth is growing faster than the pool of available skilled
                                                                            analytics programs, and trade execution platforms, for
           financial advisors, the resulting resource crunch is going
                                                                            example, and external data types to incorporate might
           to increasingly affect wealth management firms’ ability to
                                                                            include custodial data, market data, financial headlines,
           take advantage of growth opportunities.8 The situation is
                                                                            ticker information, and more.
           already shockingly dire: one-third of advisors feel that they
           do not get enough time to service clients, and advisors on       Given the ubiquity of Microsoft Office and Outlook and
           average report that contact with existing clients is limited     the important roles these programs play in advisors’ daily
           to 30% of their overall time.9 As their workloads increase,      activities, CRM systems that offer pre-built integration
           one can only imagine what the impact could be on the             between the CRM system and these programs can be
           level of service advisors are able to deliver to clients.        of immense value to wealth management firms and can
                                                                            really cut down on the number of different applications
             Equipping financial advisors to be as effective and
                                                                            firms need to integrate and advisors need to open.
             productive as possible is therefore of paramount
                                                                            CRM systems offering Microsoft Outlook integration, for
             importance to wealth management firms. By bringing
                                                                            example, may allow e-mails to be seamlessly created and
             the best tools and information possible to the advisor
                                                                            sent to clients or colleagues directly within the system,
             desktop, they empower advisors to perform at a higher
                                                                            automatically appending them to the client record for
             level, delivering better service levels while managing a
                                                                            clear communication tracking. Similarly, Microsoft Office
             larger book of business.
                                                                            integration can, for example, allow letters to be drafted
             One concern in furnishing advisors with a wide range of        using Microsoft Word and mail-merged with CRM contact
             tools and information sources, however, is ensuring that       data, all without leaving the CRM system. Another
             they are usable, not overwhelming. No matter how great         Microsoft application that is growing in importance and
             the tools and data, switching between multiple systems         utility for financial services firms is Microsoft SharePoint;
             to accomplish a task or checking multiple data sources         built-in integration between it and the CRM system allows
             to get a comprehensive picture is sure to slow down even       a broad range of files and documents to be stored in an
                                                                            organized fashion along with client records. For example,
                                                                            a scan of a hand-written KYC form or signed Investment
                                                                            Policy Statement could be easily stored in a SharePoint

              8. Ibid.

              9. Ibid.
                                                                                                                   Pivotal CRM | White Paper   4
             library associated with a specific client and available right   firm establishes a client-centric infrastructure that always
             there in the CRM system. Pre-built integrations with these      keeps the client front of mind.
             intuitive and familiar tools cut down on training time and
             dramatically limit the need to switch between programs,
             saving time and increasing efficiency.                          Become a Trusted Advisor
                                                                             As noted earlier, troubling discrepancies exist between
            As clients’ product interests have expanded and wealth
                                                                             advisors’ perceptions of themselves as trusted
            management firms have moved to more product-agnostic
                                                                             advisors and their actual client relationships. Gaps in
            fee-based models, the complex range of products with
                                                                             client knowledge are part of the problem, but wealth
            which advisors deal has expanded exponentially, making
                                                                             management firms also need to do a better job of
            it hard for advisors to hold in-depth knowledge of all
                                                                             ensuring client intelligence is used to its full advantage
            available product options. Integrating product information
                                                                             and relationships are nurtured in a systematic and
            into the CRM system is thus a great way to provide
                                                                             consistent manner. When it comes to precious client
            advisors with easy access to rich product information
                                                                             relationships, nothing should be left to chance. By using
            when and where they need it: in the context of client
                                                                             their CRM system strategically, wealth management firms
            interactions. By storing product information within the
                                                                             can go from reactive to proactive, ensuring that client
            CRM system, advisors can instantly call up the facts and
                                                                             information is leveraged to the firm’s advantage at every
                                          features they need to position
                                                                             turn and that the client relationship continues to evolve
                                          offerings to clients and
Service—not investment                    prospects. Some of the more
                                                                             and deepen over time.
performance—is the                        advanced systems will allow        It may surprise some to learn that service—not investment
top reason clients cite                   flexible product components        performance—is the top reason clients cite for switching
for switching wealth                      and features to be dynamically     wealth management firms.10 Some firms may never learn
                                          combined to fit client needs.      that this is the reason for a client’s departure, or may
management firms.
                                          Some CRM solutions also            only learn it too late, because they do not engage with
                                          allow competitive intelligence     their clients unless something goes wrong, assuming that
            to be stored within the system so that it is easily              if a client’s assets are performing within an acceptable
            accessible at the point of sale. This enables the advisor to     range, all is well. In fact, many firms’ approach seems
            proactively compare proposed products with competitive           to condone this kind of “hands-off” client relationship
            offerings the client might be considering or overcome any        management: almost 50% of wealth management firms
            objections, highlighting their product’s differentiators and     do not conduct annual independent reviews of advisors’
            comparative advantages. In some cases this could rule            client relationships.11
            out the competition right from the outset, dramatically
            shortening sales cycles. Some CRM systems also allow             A good CRM system enables advisors to implement a
            for automated literature fulfillment, accelerating follow-up     solid relationship plan composed of frequent goal-based
            to clients with product documentation and materials.             touch-points throughout the year. This can be as simple
                                                                             as an informal check-in call or as complex as a multi-
             In addition to integrating internal and external systems and    stakeholder strategy meeting. Life isn’t static and neither
             data sources, the CRM system should give advisors a rich        are clients: by tracking evolving goals, interests, and life
             assortment of productivity tools, including personalized        stages, the advisor can ensure that client information
             dashboards, lists of daily scheduled tasks, links to clients    doesn’t grow stale and that any new developments and
             they need to call that day, alerts, and reporting tools. The    opportunities are recognized as early as possible. The
             system should also enable advisors to quickly find any          overarching goal is to ensure the advisor understands the
             information they need, such as a list of all clients with a     client’s evolving wealth management goals and priorities
             certain product interest or hobby, using sophisticated          and is in the right place at the right time to position
             built-in querying tools.                                        the firm’s financial expertise, products, and services,
                                                                             systematically growing share of wallet. Not only will this
             What should always be kept in mind in configuring the
                                                                             enable the wealth management firm to effectively and
             “turbo-charged” advisor desktop, of course, is the end
                                                                             seamlessly up-sell and cross-sell products and services
             goal of making advisors more effective, informed, and
                                                                             in response to new client interests and life events, but
             efficient in serving clients. Integration of client-centric
                                                                             it will continue to deepen the relationship cumulatively
             tools and data into a centralized CRM hub helps advisors
                                                                             over time and enhance the perception of the firm as a
             cut down on time spent hunting for information, entering
             duplicate data into multiple systems, switching between
             programs, or completing laborious administrative tasks,
             ultimately increasing the percentage of time they can           10. Ibid.
             spend on high-value client-facing activities. Furthermore,
             by bringing all these tools and details together in the         11. Ibid.
             context of the client relationship management system, the

                                                                                                                    Pivotal CRM | White Paper   5
             trusted business advisor. Research indicates that there          the same discipline as new clients. What differentiates
             is ample opportunity for wealth management firms to              this kind of sale, however, is that is enriched by the deep
             increase their effectiveness here—only 50% of firms hold         knowledge of the client that has been built up over time,
             more than 40% of their clients’ investable assets under          allowing the advisor to time and match pitches to client
             management. Analyst firm TowerGroup also notes that              needs, increasing receptivity and conversion rates by
             since investors “on average maintain more than 2.5               being more customer-centric.
             brokerage relationships and place less than 65% of their
             investable assets with their primary broker, firms have
             some significant opportunities to increase their share of        Collaborate for Success
             wallet with customers.”12                                        CRM systems aren’t just data sources; they’re
                                                                              collaboration platforms. Today’s clients want immediate
                                       After each call or meeting, the
                                                                              service and faster results, and having a single person
                                       CRM system should make
Complex multi-stakeholder                                                     servicing a client can create a bottleneck and slow
                                       it easy to enter notes that
processes such as client on-                                                  down response. Similarly, within the average wealth
                                       clearly flag all products and
                                                                              management firm, there are many different skill-sets and
boarding can be significantly          services discussed and the
                                                                              areas of specialization, such as retirement planning or
accelerated by workflows.              client’s reaction, preventing
                                                                              tax planning, all of which may be of benefit to the client. It
                                       the client from being offered
                                                                              is not always most efficient or in the best interests of the
                                       the same items multiple times
                                                                              client to have a single staff member attempt to meet all
           from multiple sources. Any follow-up tasks, whether for
                                                                              of a client’s needs, and it can ultimately limit the products
           the advisor or other colleagues, should be easy to assign
                                                                              and services offered to a client.
           within the system for guaranteed follow-though, even if
           they are scheduled for six months or two years down the            CRM systems should facilitate a team-based advisory
           road. Any new referrals generated through the interaction          approach. The relationship can still be headed up by a
           should be easy to enter as leads for guaranteed follow-up          lead advisor or customer relationship manager—in fact,
           and should clearly note the source.                                the client need only ever deal with this one person, if
                                                                              appropriate—but it should allow the strategic involvement
             Similarly, the system should enable the firm to get
                                                                              of specialist consultants and support staff wherever they
             proactive about client retention. Shockingly, a full 50%
                                                                              can provide value or make the process more efficient. The
             of wealth management firms don’t have a defined
                                                                              goal is to allow efficient behind-the-scenes collaboration
             retention process.13 A CRM relationship plan is the first
                                                                              between different area specialists to help move intricate
             step to correcting this, as regular client interactions can
                                                                              processes forward faster, while also providing the pooled
             help identify and remedy client dissatisfaction before it
                                                                              intelligence to allow every team member to benefit from
             becomes severe.
                                                                              the information gathered by the others. Where multiple
             The CRM system can also be used to increase retention            team members engage directly with the account, this
             rates in other ways. For example, the system should be           empowers all team members to serve clients in an
             capable of issuing advisor alerts when major changes             equally informed and professional manner, helping build
             occur in client accounts, ensuring the advisor can act           the relationship while also allowing seamless continuity
             immediately. In addition, workflow functionality should          of service in the event of employee illness, vacation,
             enable the firm to implement a consistent retention              or departure. This also assists in elevating the client
             strategy whereby a defined team and set of steps are set         relationship to the firm level, not just the individual advisor.
             in motion the moment an account is identified as being
                                                                              Collaboration is facilitated by CRM workflows and action
             at risk, rather than leaving retention to ad-hoc individual
                                                                              plans that allow complex processes to be broken down
             efforts. This can significantly increase the chance of
                                                                              into defined tasks that can be assigned through the
             retaining client business.
                                                                              system to the appropriate individual and performed
             Relationship plans embedded in the CRM system ensure             either sequentially or concurrently, as appropriate.
             that as with the initial client acquisition process, the steps   This streamlines activities and drives them forward
             to build and maintain the client relationship and derive         faster, ultimately increasing overall productivity
             value from it through ongoing revenue-generation are             and lowering overhead. Complex multi-stakeholder
             consistent, methodical, and strategic, taking relationship       processes such as client on-boarding, for example,
             management from reactive to proactive. Up-selling and            can be significantly accelerated by using workflows to
             cross-selling to existing clients can then be pursued with       immediately route documents for approvals and drive
                                                                              each step forward efficiently.

                                                                              Another dimension of collaboration that is often
             12. Bienfang, Matthew. “Top 10 Business Drivers, Strategic       underdeveloped in wealth management firms is that of
                 Responses, and IT Initiatives for Brokerage & Wealth
                                                                              collaboration between the wealth management division
                 Management.” TowerGroup, December 2007, p. 9.

             13. PricewaterhouseCoopers.

                                                                                                                       Pivotal CRM | White Paper   6
              and other lines of business within a broader financial
              services firm. As TowerGroup notes:
                                                                                    Comply with Client and
                                                                                    Regulator Expectations
                                                                                    Regulatory compliance is an ever-evolving challenge for
                The broker workstation is becoming the hub from which a             all financial services businesses, and client expectations
                financial services enterprise can represent all of its business     for data security and privacy are continually mounting.
                lines and from which brokers can become trusted advisors            A CRM system can help wealth management firms meet
                representing the entire financial institution rather than just
                                                                                    the demands of both regulators and clients by providing
                a single business line. At a minimum these increasingly
                                                                                    sound security controls and thorough records.
                complex enterprises want to be able to represent the client
                relationship in a holistic fashion so that the true value of both   A good CRM system will allow wealth management firms
                the client and the enterprise can be represented regardless         to control access to sensitive client data by restricting
                of whether the advisor has business responsibility across
                                                                                    it on a “need-to-know” basis to those employees with
                the enterprise.14
                                                                                    appropriate authorization. This balances the desire to
           CRM systems should provide this holistic client view                     share client information for better-informed service with
           and make it easy for leads that come in to one area of                   the need to adequately protect client privacy. The firm
           the firm to be assigned to another area of the firm, such                should be able to restrict access to sensitive information
           as from wealth management to commercial lending, for                     while still allowing access to non-sensitive information
           follow-up or pursuit—without the risk of having the client               that helps employees help clients. Some systems will also
           fall through the cracks or be treated like a stranger by                 allow wealth management firms to create personalized
           another unit. This highlights the value of having a shared               privacy statements for clients, helping reassure them that
           CRM system across different areas of the firm. The idea                  their privacy expectations are being met.
           of a global, cross-business CRM system is prohibitive to                 While CRM systems don’t replace the need for other
           some wealth management firms because they recognize                      compliance standards and solutions, they can assist in
           that there are significant differences in the kinds of                   compliance on a variety of levels. A good CRM system
                                          data and processes used in                will allow wealth management firms to manage mandatory
                                          different geographies and                 and optional disclosures for client accounts and should
A good CRM system                         business lines within financial           help automate the completion of key documents such as
allows executives to                      services firms. However, some             KYC forms and Investment Policy Statements. It will also
perform more proactive                    flexible CRM solutions now                provide a comprehensive audit trail for all information
                                          allow uniquely tailored CRM
sales management.                                                                   entered, accessed, and changed within the system. CRM
                                          systems—complete with their               records can also be very useful as documentation of client
                                          own workflows, data views,                interactions and communications, especially if e-mails are
           and processes—to coexist on a unified platform. This                     stored within the system through Outlook integration.
           kind of system can accommodate process differences
           among discrete wealth management units such as private                   As TowerGroup notes, regulatory compliance and client-
           banking and retail brokerage, but also among completely                  centric initiatives often overlap: “Implementing real-time
           different lines of business, such as investment banking                  workflow and rules engines coupled with business
           and mutual fund wholesaling. Such systems allow wealth                   analytics will offer an unparalleled ability to improve
           management firms and other financial units to maintain                   business process and meet regulatory obligations at
           their unique processes and implementations while                         the same time.”15 CRM workflow automation and audit
           opening up a whole realm of possibility for collaboration                trails can ensure both consistent protection of client data
           across geographies and business lines—for example,                       and effective supervision of the sales process to identify
           a wealth management division may learn in the course                     potential areas of risk and fraud—as well as conformity
           of relationship calls that an HNWI client who is a CEO is                with best practices and a consistent client experience.
           seeking to take her company public and could refer the
           client to the firm’s investment banking arm as a lead.                   Since new regulations are a continual concern, the
           Such collaboration serves to further deepen the client’s                 greatest advantage a CRM system can provide to a
           relationship with the firm and the wealth management                     wealth management firm is the flexibility to adapt to
           firm’s advisory value to the client.                                     change and accommodate new processes and data
                                                                                    collection needs easily and cost-effectively.

              14. Bienfang, Matthew. “Broker Workstations: Greasepaint for the      15. Bienfang, 2007, p. 10.
                  Many Faces of Retail Brokerage.” TowerGroup, April 2005, p. 1.

                                                                                                                          Pivotal CRM | White Paper   7
Increase Management Insight                                          providing more concrete evidence of employee interaction
                                                                     with clients and prospects. With real-time insight into
With all marketing, sales, and service activity being                business performance, executives can make real-time
tracked and managed within the CRM system, wealth                    adjustments to business strategy, becoming more agile
management executives have the perfect management                    and precise.
platform. At any time, they can see in the CRM system
exactly what stage a given client opportunity is at, without
having to hunt down advisors for status updates. This                Go Mobile:
allows management to precisely calculate the sales
pipeline for revenue forecasting. They can also see which
                                                                     Productivity Anytime, Anywhere
clients are happy, which ones have issues, and which                 Wealth management firms’ clients are increasingly mobile,
ones are growing or contracting in profitability.                    and more and more, they expect advisors to match their
                                                                     mobility, doing business anywhere from on-site at their
A good CRM system allows executives to perform                       home or workplace to the coffee shop on the corner.
more proactive sales management. They can identify                   Wealth management professionals can no longer afford to
which advisors are responsible for bringing in the most              be chained to their desks, especially as their competitors
revenues and which are possibly in need of more                      go mobile.
training or support. They can see where share of wallet is
growing—and where it is shrinking. They can see which                Mobile and wireless capabilities are thus important CRM-
deals or clients are at risk or and take action to ameliorate        system considerations for wealth management firms.
the situation before it is too late. They can also see which         Employees need to be able to access and contribute to
clients are most profitable or present the greatest growth           CRM data from laptops and handheld devices, anytime,
opportunities and ensure advisors are focusing adequate              anywhere—whether they are referring to portfolio details
efforts on developing deeper relationships with them.                before an on-site meeting or entering call reports while
                                                                     on a plane. Luckily, many CRM systems offer mobile
CRM systems can also present an invaluable source of                 and wireless features that allow users to access or add
decision support. With good reporting features, a CRM                CRM data from the device of their choice. With access to
system should allow an executive to report on almost any             a broadband Internet connection sometimes uncertain,
facet of sales performance, client-base composition, and             another feature offered by some CRM systems that is of
return on investment. They can use CRM data to perform               significant value to wealth management users is the ability
win/loss analysis to see which clients are being won and             to operate with complete CRM functionality and data while
what their common attributes are, using this to refine the           in a fully disconnected mode, synchronizing with the main
firm’s processes and segmentation as well as to spot new             system when reconnected—ensuring optimal productivity
opportunities and trends. They can also use CRM data to              and performance at all times, regardless of connectivity.
realign teams and territories to play on individual strengths
and to allocate budgets and other resources—essential at
a time when many firms lack a sufficient number of highly            Conclusion:
experienced advisors.
                                                                     A Wealth of Opportunity
A good CRM system gives managers and executives the
                                                                     With expanding worldwide wealth and a growing potential
opportunity to closely monitor what is going on within
                                                                     client base, wealth management firms are fortunate
the firm without overloading employees with requests for
                                                                     to have exciting growth opportunities today and in
updates and reports. It also provides a valuable record of
employee actions and client communications that helps
avoid reliance on subjective reports and interpretations,

   Keeping Pace with Change: The Need for Flexibility
   As we all know, the only constant is change. With market-structure shifts, regulatory changes, competitive pressures, and
   other forces continuously reshaping the wealth management landscape, you can count on the fact that your firm will need to
   adapt in order to deal with the plethora of changes in your business environment. To continue to be effective high performers in
   today’s business climate, wealth management firms have to be agile and adaptive. Supporting your business processes with
   technology can make your company faster and more productive today—but you must also ensure it won’t hinder you when you
   need to respond rapidly to tomorrow’s changes in the market and regulatory environment.
   Whatever CRM system you choose, you should ensure it is capable not only of molding to the way you currently do business,
   but also of adapting to change—quickly and cost-effectively. No matter how robust or powerful your CRM system, it is useless
   if it ties you to outdated processes and impedes your business agility. Be sure to select a flexible, easily customizable CRM
   system that can keep pace with your business in a dynamic business environment.

                                                                                                                Pivotal CRM | White Paper   8
the years ahead. But as this growth begins to slow,           client-centric service model and seeking to implement
especially in developed countries, firms are going to         more rigorous processes for building and retaining client
be looking to their competitors’ client bases to acquire      relationships. To really put this idea into play and move
new business, which means competition is going to             it beyond lip service, making it consistent and scalable
be fierce. Even in today’s climate, the push to expand        across the firm, wealth managers need to embed these
share of wallet of existing clients—a top priority for most   processes within a robust, flexible CRM system.
wealth management CEOs16—implies that there will be
winners and losers: for each percentage gained by one         Fortunately, today’s CRM systems have much to offer
firm, another is losing ground. Similarly, as the market      wealth management firms. There are now CRM systems
expands, wealth management firms are under pressure to        designed specifically for financial services—even
grow at the same rate as the market or better if they are     expressly for wealth management—offering a better fit
to retain market share, which is placing increasing strain    for the industry without complex or costly customization.
on their systems and resources. As competing wealth           There are also CRM options on the market that are more
management firms vie for high-value clients, the choice       flexible and adaptable than ever before, allowing firms
offered to clients is going to be unprecedented, and the      to model their unique processes rather than try to fit a
barriers to switching will keep getting lower.                pre-programmed mold that may not work for their firm
                                                              or advisors. Now more than ever, it is possible to situate
Since wealth management clients cite satisfaction with        CRM as the hub of an advanced and empowering advisor
service as their top reason for staying with—or leaving—      desktop that provides all the tools and information an
their financial advisors, it is no surprise that strategic-   advisor needs to efficiently and effectively initiate, nurture,
thinking wealth management firms are embracing a new          and grow loyal, profitable client relationships. As wealth
                                                              management firms seek to compete and capitalize on the
                                                              opportunities presented by the changing face of global

16. PricewaterhouseCoopers.

                                                                                                      Pivotal CRM | White Paper   9
wealth, their ability to leverage CRM technology to execute               Using Pivotal CRM, wealth management firms can
on client-centric strategies will be a key differentiator.                fully integrate marketing, sales, and service functions
                                                                          for increased efficiency and effectiveness, obtaining
                                                                          a complete view of the client so users from all areas
Pivotal CRM                                                               of the company can offer informed, personalized client
for Wealth Management                                                     interactions. Pivotal CRM saves time and increases
                                                                          productivity by automating and facilitating workflows
Pivotal CRM for Wealth Management is a complete, end-                     for important multi-stakeholder processes such as
to-end client relationship management suite that offers                   client on-boarding and KYC completion. It also provides
exceptional functionality tailored to the needs of wealth                 visibility into complex networks of affiliation and influence,
management firms. Pivotal CRM for Wealth Management                       allowing wealth management firms to more successfully
was designed to help wealth management firms embrace                      track referrals, measure full client value, and identify
dynamic client relationship models while capitalizing                     new opportunities.
on the efficiencies of automation and centralized client
information and opportunity management.                                   Pivotal CRM for Wealth Management is complemented
                                                                          by the full Pivotal CRM for Financial Services suite, which
Pivotal CRM for Wealth Management mirrors the business                    also includes solutions for investment banking and
processes and data models commonly used by private                        institutional brokerage, commercial banking, institutional
banks, retail brokers, mass-affluent firms, and other                     asset management, and mutual fund wholesaling,
wealth management organizations. Its flexible platform                    allowing diversified firms to easily accommodate the
allows it to be seamlessly connected to the entire firm,                  unique processes and information needs of their different
including back-office financial systems. With an industry-                lines of business while maintaining an integrated platform.
specific client relationship management system, wealth
management firms can accelerate the return on their                       With wealth management firms around the world using
CRM investment and lower their total cost of ownership.                   Pivotal CRM solutions, CDC Software has proven time and
                                                                          time again its ability to meet the needs of the industry. The
Pivotal CRM for Wealth Management enables financial                       Pivotal CRM approach ensures a faster implementation
advisors to develop deep insight into their clients' needs                with a lower total cost of ownership by delivering financial
and preferences, accompanied by tools that help them                      services solutions on the scalable and flexible Microsoft®
automate multi-step processes, track performance, and                     platform, which supports easy customization, integration,
collaborate better as a team.                                             and deployment. Wealth management firms can rapidly
                                                                          and cost-effectively adapt Pivotal CRM to meet changing
                                                                          compliance and operational demands and grow with their
                                                                          business—meeting their business needs today, tomorrow,
                                                                          and in the future. To learn more, please call us at
                                                                          1-877-PIVOTAL or visit www.pivotal.com/financialservices.

For more information or a complete list of our worldwide offices, please visit www.pivotal.com.
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The CDC Software logo and Pivotal CRM logo are registered trademarks and/or trademarks of CDC Software.

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