Wealth Management Companies offer a wide range of financial solutions to help their clients in managing their wealth as per their preferences
Wealth management is often referred to as an advisory discipline that aims at providing high net worth individuals and groups with tailored solutions in the field of retail banking, private banking, estate planning, investment management, tax management and advices, and in many other such fields. Wealth management services can be offered by individual financial advisors or clients can opt for large corporate entities according to their needs. The ultimate aim of wealth management group is to maximize the long-term growth of the wealth of their clients. These companies are dedicated towards their customers by incorporating impartiality, integrity and complete confidentiality in their operations and enhancing their performance level on a continuous basis.
With regard to a Wealth Management Company, KPIs can be configured under four directions- "Financial Perspective", "Business Development and Growth Perspective", "Operations and Recognition Perspective" and "Employee Perspective".
Financial Perspective takes into consideration KPIs to provide financial outlook of the company. It includes KPIs such as net new money, return on assets, cost income ratio and profit growth rate. Business Development and Growth Perspective comprises of KPIs in the form of % new customers acquired, attrition rate of customers, % growth of assets under management (AUM), etc. Operations and Recognition Perspective takes into account KPIs like deposits to AUM ratio, loan to AUM ratio, number of service awards won, etc. Lastly, Employee Perspective consists of KPIs such as employee turnover rate, % increase in number of relationships per client facing employee, % increase in revenues per advisor, etc.
Wealth management groups also have to tackle a number of potential and reoccurring challenges that can badly hinder their performance if not managed with utmost urgency. As market access is widening up day by day, the competition for the investors and their wealth has also intensified. The availability of new, inexpensive and less risky investment options for the investors has resulted in a sudden swing from wealth management solutions. The improvement in the availability of financial information freely has proved to be catalyst in increasing their demand and expectation from the wealth management company. Effectively tackling to these increased demands and expectations is very crucial from the view point of the company. Developing and providing tailored solutions to suit customer"s needs time to time is not an easiest of tasks to pursue. Another important aspect which must be catered by the wealth management company properly is maintaining the confidentiality of client information. These companies mu st de al
with confidential client information with care and should deploy proper security mechanisms to restrict unauthorized access. Uncertain global events like sub-prime crisis in US are of great consideration for a wealth management group.
The KPI approach helps in judging the performance of a wealth management company not only on financial terms but it also takes into consideration non-financial metrics. Through KPIs a company can quantify key areas related to their business and those also that are lagging behind their acceptable performance level. It draws the attention of management towards factors that are critical for the success of the company in the long run which may be in the form of customer relationship, quality and distinct services/products, financial earnings, or operational effectiveness.