How to identify, attract & retain high net worth individuals

The distinction between attracting and retaining high-net-worth individuals (HNWI) within the existing investment landscape can feel like a blurred line for many wealth and asset management firms.

With new rules released by the Financial Conduct Authority (FCA) in 2022, which demanded increased consumer protection for financial services consumers, it is now more important than ever for firms to leverage data to improve customer experiences and outcomes.

As a result, firms may now be experiencing the impact of lacking the necessary customer-centric data to effectively and compliantly deliver positive experiences and outcomes. Understanding the steps that must be taken to ensure that wealth management firms are digitally safeguarded, while adopting customer-first practices and identifying the HNWI they would like to attract, will be critical.

How do wealth & asset management businesses know who to attract?

It is through enhancing customer data that is backed by demographic, lifestage, lifestyle and attitudinal insight that will enable wealth & asset management firms to better understand, reach, and serve customers. Without having the right data available, they will risk lacking an integral understanding of who to attract.

Wealth products were historically sold by independent advisors who knew the local area and could identify the ultra-wealthy with ease, including where they were likely to be, often by word-of-mouth. This is no longer the business model for many wealth management firms looking to identify potential business at scale and deliver direct sales to new investors who expect a different type of engagement.

What major challenges do wealth & asset management businesses face in attracting & retaining high net worth individuals?

Competition for investment

The everchanging investment landscape has caused wealth and asset management firms to re-evaluate existing investor experience approaches. To keep up with the changes in client demands, firms that lack integrated insight and digital engagement capabilities will find themselves at a disadvantage against competitors, and unable to provide the tailored experiences investors now expect.

Cost of living

With no definitive end in sight for the cost of living crisis, there is increased interest in targeting affluent individuals from across sectors, many of which are mature in their data and digital capabilities. Wealth Management firms will experience increased competition and pressure for those available assets. Firms are tasked with reassessing their customers’ journey end-to-end to determine how to effectively safeguard against these unpredictable times.

What techniques should wealth & asset management businesses use to retain investors?

Effectively identifying and catering for the right customers

No two customers are the same, and firms that may have opted for a traditional approach that meets the needs of all customers will quickly realise that personalised and customised experiences for each unique customer is the best way forward. It is integral for firms to understand what their clients want and where they are seeking out financial products that meet their unique needs, to help them access the right products. This approach will allow customers to gain the most use of their tailored solution and will encourage them to remain with the firm for future support in their financial endeavours.

Utilising consolidated data to retain customers

Firms that effectively utilise consolidated data will notice long-term growth and can leverage this to outcompete their competition. Firms have client data, but without an understanding of how to enrich it, decipher it and make use of it to improve their customers’ experiences, they will not determine how to retain customers effectively. Customising solutions for clients that are built on demographic, attitudinal and behavioural insight will be paramount for this.

Acting upon customers’ short and long-term needs

Firms need to better understand the current and future needs of investors to appeal to a wider investor audience. Those that acknowledge the need for enhanced client understanding can introduce insight into their business that will drive improved customer-first experiences and outcomes.

How can CACI help?

Consumer Duty is an authoritative intention that will guarantee trust between financial institutions and consumers. Firms must innately understand their customers to adapt their products and drive messaging that effectively engages them and improves results, whilst also ensuring compliance with the directive.

CACI is uniquely positioned to support businesses through agency, consultancy, data provider and system integration capabilities, all of which work in conjunction to drive value for your business. Our services and data products work in conjunction with our strategies and values to continue to connect firms with their customers.

Throughout this blog series for the wealth management industry, we break down the opportunities for businesses to attract and retain high-net-worth individuals. Continue reading at the links below:

Blog 1 – Four barriers wealth managers face when attracting & retaining customers

Blog 3 – Three reasons why wealth & asset managers need young investors

Blog 4 – How CACI supports the wealth management customer journey

Whitepaper – Acquiring new high net worth clients – What wealth managers need to know

To find out more about how CACI can support you, contact our team of data experts today.