There was a time when even the wealthiest investors would bank on banks to merely help them realize their asset-accumulation goals.
But in recent years, financial institutions that focus solely on boosting the bottom line stand to lose their competitive edge in attracting and retaining clients with high net worth ($1-million-plus in assets) and ultra-high net worth (generally $25-million-plus).
As a result, banks and the like are pumping more resources into enriching the client experience, offering more depth, breadth and range in their products and services to meet the needs of this much-sought-after group.
Instead of spending energy, time and resources to enlist multiple organizations for investing, legal, financial, tax, accounting, philanthropic and personal advice, high-wealth individuals are increasingly looking to financial institutions for one-stop guidance.
"The reality is, families aren't going through those idyllic situations that we saw on TV in the 1950s," says Andrew Auerbach, head of BMO Harris Private Banking, in Kelowna, B.C.
Lofty wealth generally comes with more complexity, conflict and challenges, so "when you think about what really matters to the successful individual, it's all about saving time and money, and reducing their worries," says Mr. Auerbach.
At BMO Harris Private banking, for instance, one novel offering is enCircle, a "concierge" service with a range of advisers who will handle almost any type of help for clients, such as those too busy to handle aspects of their business, or frequent travellers, or families needing help with ill and dependent family members.
According to the financial research firm Investor Economics, as of Dec. 31, there were 544,000 high-net-worth households in Canada, representing 3.8 per cent of the total. Canadians in this category hold a total of $1.8 trillion of wealth, or 67 per cent of the total wealth of the country.
In ramping up offerings for high-wealth individuals, financial interests are acting on more than just hearsay.
An Ipsos Reid poll in March, 2009, about three months before the official end of the 18-month recession, suggested quality of advice and expertise was the top concern for half of high-net-worth clients, notes Sandra Recine, an executive with TD Waterhouse Private Client Services.
Meanwhile, a Canadian wealth survey of more than 20,000 investors released earlier this year by the Vancouver-based digital marketing company Vision Critical indicated investors were feeling more positive about their advisers as stability returned to the markets. The survey also ranked ScotiaMcLeod, RBC Dominion Securities, CIBC Wood Gundy, Investors Group Securities and BMO Nesbitt Burns as the top five firms, respectively, among affluent and high-wealth investors.
"As high-net-worth baby boomers approach retirement, they grow increasingly concerned about having sufficient resources to sustain the lifestyle they want through their retirement years," says Ms. Recine. "The economic downturn and resulting impact on personal wealth has increased the level of concern. Products and services are one piece of the solution set, but the quality of advice and the ability to customize that advice to clients and their situations is our key differentiator."
Hamish Angus, managing director, ScotiaMcLeod, says the team-based approach is key to meeting the sophisticated needs of ultra-wealth clients. "They are looking for broader advice than just investments; they need co-ordinated advice, a quarterback to look after their wealth - personal, business and family," he adds.
The stakes are so high and the competition so brisk to capture the fancy of high-wealth investors that even market leaders aren't resting on their success.
RBC Wealth Management, for one, ranks first overall for high-net-worth market share in Canada, according to Investor Economics, yet it recently announced structural changes that include expanding RBC Dominion Securities as well as the investment counselling, and estate and trust services, while catering to the growing number of international clients served in Canada.
"In the last two to three years, investor confidence has really been shaken and clients still remain anxious today, so our job is to help them build their financial wealth with more focus on risk management," says David Agnew, head of RBC Wealth Management Canada, noting ultra-high-net-worth individuals account for 25 per cent of revenue and 5 per cent of the client base.
"Clients also expect excellent service, are rethinking their investment portfolios, looking for greater transparency and looking for liquidity. They want to make sure their portfolios are structured properly, and their estate plans and investments are in order."
Special to The Globe and Mail