Vall Banc: Never forgetting the human component in wealth management

Some studies suggest heirs will look for a new financial advisor after inheriting their parents’ wealth - What are you doing to cultivate family loyalty and prevent heirs from moving their money to different institutions?

It is vital to become involved in the family succession to avoid the dispersion of the assets. By incorporating the beneficiaries in the follow-up meetings with their parents, a relationship of trust is built. And by advising them on the best financial and tax options in the transfer of the inheritance, the probabilities of permanence are substantially increased.

How do you approach advice in terms of inheritance? How does it differ from typical financial advice?

Identifying the roles that different family members play or will play is critical to maximize the confidence of the entire family group. It is an approach from a personal and family angle rather than just a financial one.

How different are Millennials compared to their elders? How different are their expectations and behavior?

In general terms, Millennials are not comfortable with financial institutions and they do not value having a wealth manager as a differentiating factor because the human component of their relationship with banks is not key to them. 

As far as their expectations are concerned, it is true that they attach much greater importance to ESG investment criteria and the impact of their investments than their parents. They are not just looking for financial returns.

How have you transformed your wealth management offer to satisfy the new generation? And how do you engage potential new customers?

To attract customers among this customer profile, it is important to differentiate ourselves from traditional private banking, with a different image and service, and with digital a omnichannel offering allowing almost everything to be completed. The product ceases to be the main pillar and service becomes the differential aspect. One of the rules to improve the connection with young people is to offer a lot of financial education.

According to research by Accenture, the current wealth management advisory model is not working for women. Do you notice differences in terms of investment behavior by women compared to men? What are some examples? And how have you tailored your offerings to serve female clients better?

More than a matter of gender, what we see is a difference in behavior depending on the source of wealth. It is true that there are more women entrepreneurs than ever before, and that is a determining factor. 

There is also a greater need to make their life easier and to find good solutions that facilitate the interaction with the bank.  Now, we also see a greater sensitivity to aspects related to sustainability and the impact of their investments.

Right now, we are in a process of reflection with respect to having a valuable offer adapted to their needs.

Technology is being implemented to digitize almost every area of a bank, but advisory remains complex to automate. How is your bank approaching the integration of AI into its advisory services? Will it be a mix? Will the human touch always be required when it comes to wealth management?

The human component will always be necessary in wealth management because the emotional aspects are not solved by technology yet - nor will they be in the near future. We believe in a hybrid model in which technology accompanies a WM, not replaces her. It accompanies her to make her more robust, solvent, and trustable in the advice provided to clients.

How do you see wealth management evolving in the next decade? (open banking, platformication, new players, new technologies…)

Technology will play an increasingly important role. No one can argue against that. Every single transaction whether it is traditional banking or wealth management, will be digitally performed. 

Having said this, the emergence of “robo advice” in the past few years has also made clear the importance and value of human financial advisors. That personal touch is key to help clients navigate uncertainty and 2020 has been a reminder of the importance and value of advisor-to-client wealth management advice.

Finally, we see that both communication strategies and products will have to be customized to different groups - youth, seniors, women. But ESG factors will be equally important to all of those groups as they will be a key pillar in the wealth management industry.