27 Jul The Benefits of the a Membership Model in a Changing Wealth Management Market
From institutions headquartered discreetly behind closed doors in smart Georgian terraces through to providers operating from prestige financial district office blocks, the private banking and wealth management industry has many faces.
Some providers – usually characterised as wealth managers – focus on investment advice and execution, while others offer a broader range of services. And while all private banks and wealth managers exist to serve the needs of high net worth (HNW) individuals, each will have its own client acceptance criteria. More importantly, each will also have its own service offering, ranging from genuinely bespoke – and thus tailored absolutely to the individual – through to something closer to plain vanilla.
A Changing Market
But the marketplace is changing. According to research published this year by wealth management research company Scorpio Partnership, younger HNWs are becoming increasingly demanding in terms of what they expect their financial services providers to deliver.
For instance, a key finding of the research – Essential Wealth: the Many Hats of the Modern Wealth Manager – is that younger investors, in particular, expect their advisers to help them drive forward their wealth creation strategies. To that end, around half of those under 35 want advisers to be much more proactive in discussing goals and 52% in the same age group would like to see new products to help them achieve their financial objectives. Meanwhile, just over half of over-35-year-olds say that advisers are their primary source of education and information.
Whether addressing millennials or investors from previous generations, the implication is that financial service providers must fully ‘know’ their clients, if they are to deliver high quality advice and investment opportunities that are fully attuned to the requirements and ambitions of individuals.
The question is, how can that alignment be best achieved?
The Membership Approach
The Route – City wealth club has adopted a Membership model. This is the cornerstone of a uniquely responsive approach to the provision of advice and investment opportunities.
Membership of any organisation implies participation in community rather than simply being a customer or a client and this is true of The Route. Since launch, The Route has grown its Membership organically on a recommendation basis. Today, 98% of Members have been recommended by other Members and most are either high income earners, city professionals, entrepreneurs, investors or high-net worth, non-UK residents or non-doms.
Feedback from Members shape and define the Route -– City wealth club’s wealth management across a 360 degree proposition, covering: Income (tax planning); Finance (debt investment); Property (investment opportunities); and Future (financial planning).
And at an individual level, The Route – City wealth club works proactively with all Members to fully understand their ambitions, objectives and appetite for risk. Assessments are carried out on a regular basis.
Access to Deals
Once on board, Members have access to exclusive deals and opportunities that are not available elsewhere. These include opportunities to invest in property or (through The Route – Finance), an opportunity to invest in loans to carefully selected companies seeking funds to underpin their growth strategies. Normally, these are special situations deals, offering fully-securitised loans with high rates of interest and relatively short repayment periods.
Beyond The Route – City wealth club’s own core services, Members are are given access to opportunities through third party partners. For instance, in addition to lending to SMEs, City Wealth club Members can also make equity investments through Growthdeck, a Route partner.
If a community is to thrive it must be responsive to Members and offer genuine and exclusive benefits.The Route – City wealth club has applied the Membership concept to deliver financial advice and services that offer superior returns and service to its community of investors.