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Before You Call Yourself a Wealth Manager…

For Michael Summerton, identifying as a wealth manager is more than just a move from product to service – it’s total mindset shift.
3 min read

Wealth managers tend to be defined as a subset of independent financial advisers (IFAs) who service high net-worth individuals and provide holistic financial advice, offering a range of solutions to clients’ whole-life needs, rather than focusing on simply selling specific products. Wealth managers tend to earn their revenue from ongoing advice fees more so than from commission on product sales.

However, Michael Summerton, Head of Proposition at INN8, believes wealth management goes even further than that. He defines the wealth manager as the financial adviser with an entrepreneurial spirit who values their independence, stays ahead of the curve to future-proof their business, and maintains a constant focus on providing exceptional service to their clients.

For Michael, identifying as a wealth manager is about more than just a move from product to service – it’s a total mindset shift towards scalability and growing your business beyond yourself, and requires a starting point of truly putting the client at the centre of the universe.

Doors open doors

Clients are becoming increasingly informed and discerning, and with that comes a demand for more personalised, bespoke attention from a wealth manager who truly understands their needs and makes them feel valued. It’s here that the wealth manager shines.

And as Michael believes, the opportunities show in the numbers. Tied and bank-assurance advisers are flat or only grow with inflation, while the IFA market’s compounded annual growth rate is ahead of inflation meaning the segment is growing faster. This indicates that there’s a large consumer segment who absolutely needs advice, and who are beginning to look at different options than the traditional adviser route.

Challenges do exist

“Wealth managers are challenged by the realities of growing their businesses,” explains Michael. “They tend to work on their business rather than just in their business, in an environment which inherently requires a great deal o personal attention.”

He believes that this challenge can be alleviated by developing a digital mindset and taking advantage of the myriad of digital tools and services that are available to automate regular tasks such as reporting and compliance, for instance.

Click through to learn about our favourite digital tools for your business.

Another challenge is keeping up with changing regulatory demands. Despite a shift in regulatory Financial Intelligence Centre Act (FICA) requirements to a more pragmatic, risk-based approach, wealth managers are still faced with having to spend time and money to remain compliant.

Welcome to the team

The barriers to entry in the industry have traditionally been high, and the financial industry has lagged behind in terms of opportunities for emerging wealth managers. Michael explains that “as the client landscape changes, with the rise of the black middle class and more high net-worth women seeking financial advice, there’s an opportunity for wealth managers to carve out a niche for themselves built on a foundation of exceptional client service and a deep understanding of the communities they serve.”

The way of the future

Depending on who you talk to, the rise of technology like artificial intelligence (AI) can either be an exciting opportunity or something to be feared. But Michael believes that artificial intelligence will never replace the wealth manager entirely.

“The wealth manager is in no danger of becoming obsolete. Using the medical industry as an example, in the past people were worried that doctors would be out of work due to the increasing use of diagnostic and treatment-related software and technology. That hasn’t happened. In fact, there are better patient outcomes where medical professionals employ technology and data analytics alongside personalised attention.

“The relationship of trust can never be replaced. AI and other technologies like it are simply a tool that wealth managers can use to power up their practice and take it to the next level; it will never replace their experience, understanding of nuanced human needs, and the trust that they build with their clients.”

Need some advice?

Michael’s advice to wealth managers just starting out in the industry: “Start with what you stand for; understand your value proposition and what are you adding to your clients’ lives. Twenty years ago, the approach was ‘I have a product and I’m going to sell it to you regardless of who you are or what you need’.

Today, clients need to feel that they’re getting value for money and that you get them. “Creating an excellent client experience means making sure that reality meets expectations, it’s as simple as that. Financial services at its heart requires a smooth and predictable experience. Figure out how to set up your practice to deliver that kind of service.”

He adds: “You don’t need to know everything. Don’t be hesitant to network and partner with experts in other areas. Create a brand, market yourself effectively, and use your networks. But first – decide who you are and what you stand for. The rest is details.”