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Jumping through hoops: What it takes to consolidate client assets

Clients say they want to consolidate their finances and investments with a single firm, but aren’t following through. What gives?

The answer may lie not with clients, but with wealth managers, according to a new report from Cerulli Associates.

The research firm found that 49% of investors would prefer to use a single institution to serve all of their financial needs. Youth is also a factor: 66% of client under age 30 said they preferred a one-stop solution compared to 46% for clients over age 50, according to Cerulli. But barriers, namely complicated onboarding and account opening processes, hinder firms developing deeper client relationships.

Attendees use mobile phones as they pass a Samsung Networks sign outside the Samsung Electronics Co. pavilion on the opening day of the MWC Barcelona in Barcelona, Spain, on Monday, Feb. 25, 2019. At the wireless industry’s biggest conference, over 100,000 people are set to see the latest innovations in smartphones, artificial intelligence devices and autonomous drones exhibited by more than 2,400 companies. Photographer: Angel Garcia/Bloomberg
Attendees use mobile phones as they pass a Samsung Networks sign outside the Samsung Electronics Co. pavilion on the opening day of the MWC Barcelona in Barcelona, Spain, on Monday, Feb. 25, 2019. At the wireless industry’s biggest conference, over 100,000 people are set to see the latest innovations in smartphones, artificial intelligence devices and autonomous drones exhibited by more than 2,400 companies. Photographer: Angel Garcia/Bloomberg

Wealth managers need to develop more client-friendly applications, and ensure they’re being used efficiently, says Scott Smith, Cerulli’s director of advice relationships and one of the report’s lead authors. In other words: It’s not a lack of opportunity, it’s a lack of assistance, he says.

Wealth management firms have indeed been upping technology investments and adding new services for clients — everything from robo advisors to 401(k) benefits. But these haven’t necessarily come together in a way that enables clients to access them with ease.

Clients wanting to consolidate their finances often cited ease of doing business, according to Cerulli. Wealth managers, meanwhile, have big incentives to win more business from existing clients.

Morgan Stanley’s client base holds $2.6 trillion of investable assets outside the firm, Andy Saperstein, the firm’s head of wealth management, said at a recent conference.

Saperstein called current clients “the most attractive source of growth for the next ten years.”

Morgan Stanley and other big wealth management firms have upped technology investments in recent years, adding robo advisors as well as new client onboarding features such as esignature.

Still, some clients may need additional handholding when exploring how to better manage and consolidate disparate assets, according to Smith.

“It’s applying labor and technology and creating a better roadmap for clients to get to their goal,” Smith says.

But technology isn’t the only factor firms should consider. Trust and costs are also top of mind for clients. To address this, wealth managers should reduce conflicts and operate with a fiduciary mindset, Cerulli says.

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