How (and Why) Relationships Drive Private Banking


Erinn Steffen

Executive Vice President, Operations

High-net-worth individuals (HNWI) may have more in the bank, but they’re also looking for more from a bank. And today’s HNWIs are looking for more than ever from their private banking services. Most banks have entire divisions to cater to the needs of this coveted client base. Along with the usual savings and checking account programs, traditional private banks offer personalized help with investment, retirement, succession planning and tax management. Diverse luxury services like these will help attract and retain HNWIs, but your best marketing asset is your personal relationship with each private banking client.

Perhaps it’s no surprise that the common thread through all private bank marketing today is the relationship. All sorts of businesses are seeking to differentiate themselves through relationships, but in banking — particularly for HNWI clients — there is a lot at stake. Private banks must continue to focus on building trust in their brands, as well as nurturing relationships through listening and understanding.

HNWIs tend to rely more on the advice of trusted advisors and a network of family, friends and colleagues to make their decisions. And when you want word-of-mouth marketing, relationships are what matters most. Trust is a two-way street, so private banks must really listen to clients and build relationships that are rooted in understanding and pursuit of each client’s goals. The client has to be able to talk openly about what he or she wants to accomplish with the help and counsel of the private bank.

How do you ensure your private banking relationships speak for themselves? Focus on your people, for starters. That begins and ends with continuous training. According to a Bain study of the most effective private banking programs, UBS offers career-long in-person training programs for relationship skills that foster personal development rather than focusing on product information. Merrill Lynch has devoted a lot of resources to building a training program for private banking relationship managers centered on face-to-face learning models, in addition to a mentoring program.

The best relationship managers in private wealth management know it’s about understanding the needs of the client more than being able to sell the bank’s products. Merrill Lynch encourages relationship managers to put those needs above product specifics by allowing managers to adjust product fees and discounts to keep HNWIs happy.

The Bain study also shows that gains are even bigger when banks can retain HNWIs after attracting them. Their analysis showed that one loyal affluent customer was worth almost three and a half times as much as an average banking customer. How do you keep your HNWIs satisfied beyond providing ongoing, personalized relationships?

While every private bank should have investment management services, trade execution and insurance services, philanthropic advisory teams will set your bank above. Using wealth to make a difference is a priority with all generations, but especially for younger HNWIs. UBS provides philanthropic advisors that set up structured giving programs or foundations for clients.

Multichannel marketing plays well with HNWIs, because this segment of the population can afford to explore many different sources of information when making its banking decisions. Unique experiences have proven to be an effective marketing tool with private banking clients. This could include educational events that focus on wealth management topics like investment or succession planning and philanthropy.

Marketing your bank’s private wealth management services isn’t really an easy solution. All of the traditional rules still apply, but if you don’t provide those personalized relationships and services tailored to the individual, then your other marketing efforts will go to waste. It’s a holistic approach that will improve engagement and response from the target audience.

Hey! Our name is pronounced Mōw-rrr, like this thing I’m pushing.

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