Editor’s note: Today we introduce a new blog on risk management for wealth managers and their clients by SunGard risk expert Blaine Maxfield. Maxfield, executive vice president of SunGard’s wealth management business, will be a regular contributor to AdvisorOne.com/Wealth.
Today’s wealth manager is dealing with two main challenges: keeping risk in check by consistently acting in the best interest of their clients, and strengthening service for increasingly demanding clients. These challenges are inextricably linked as wealth managers look to provide superior service in order to compete.
The financial crisis has resulted in many investors becoming more engaged in the financial planning process. However, the perception of full-service firms remains low, according to a recent J.D. Power study. Deepening client relationships is still a key challenge for wealth managers. There are fewer high-net-worth individuals today, and many of them will move their money from one firm to another based on lack of confidence they have with their advisor.
At the same time, the SEC continues discussions around new fiduciary standards. In addition to managing risk for their clients, wealth managers must also manage their own risk. They may need to prove to authorities the integrity of their financial planning activities and advice, and their ability to manage risk effectively throughout the process—creating another level of scrutiny around an advisor’s level of service.
Some wealth managers are coping with these challenges by turning to technology to integrate workflows and aggregate information, in order to give their clients more transparency and higher level of service. Technology can also help them increase efficiency so they can spend more time with their clients and generate any necessary reporting that authorities may require down the road. Others are focusing on training and education to increase product and industry knowledge, and to keep pace with the changing regulatory requirements.
What are you doing to prepare for the changing face of wealth? To keep your clients satisfied, informed and engaged? To manage risk and monitor investments? To prepare for new fiduciary standards?
Be sure to check back for more blogs from me and from other SunGard wealth management experts to discuss advisor business and technology challenges.
Blaine Maxfield is executive vice president of SunGard’s wealth management business, which provides solutions designed to help financial advisors acquire, grow and service their client relationships. He is located in Salt Lake City, UT.