How banks plan to snag your high-net-worth clients

How banks plan to snag your high-net-worth clients

How banks plan to snag your high-net-worth clients The Canadian Securities Institute’s recent study of the high-net-worth (HNW) market in Canada found that if the Big Six continue to focus on boosting the education of their advisors, independents could face further erosion of their market share. 
 
“Historically, the IIROC channel has had very prescriptive academic requirements for their advisors; at least since 1967 since the Canadian Securities Course was introduced as a requirement for brokers and the bar has gone up quite a bit since then,” Marshall Beyer, CSI’s Director of Academic Standards told WP. “There’s a long history of proficiency requirements for that registered position whereas on the bank side there hasn’t been. If you work in a private bank or in wealth management on the bank side unless you’re selling a product – you might have your mutual fund license and a lot of them do – you don’t have proficiency requirements per se.”
 
According to data from Investor Economics, six different distribution channels control a piece of the $2.2 trillion HNW market with the biggest share held by full-service brokerages at 35% followed by 24% for advisors working in bank branches and then private investment councillors and private wealth managers representing another 13% of this very important market.
 
When you consider that the banks dominate the full-service brokerage channel it’s possible that in total across all six channels the banks control more than 60% of the $2.2 trillion high-net-worth market – and they have a plan to get more.
 
Using the Certified International Wealth Manager (CIWM) and other advanced wealth management designations to increase the educational proficiency of its advisors across the different areas in the bank, the big six feel referrals and cooperation will flow more freely providing high-net-worth clients with a more seamless experience.
 
If successful, the banks are betting they’ll take greater market share from independents.
 
“A few of the banks have made it [CIWM] a mandatory requirement regardless of whether you sit on the brokerage side or wealth management side of the bank,” said Beyer. “There’s a reason for that. To make this model work it’s important that there’s cooperation between the different units of the bank and that there isn’t reluctance to refer a client over and to minimize that reluctance some banks are saying is it would help if everyone were at the same proficiency level.”
Well, that and a level of trust. Whether it works or not is still up in the air.