Investors think UK private banks outperform investment manager, according to research reports

News - Banking

Written by Ray Clancy

Tuesday, 06 April 2010 08:14

UK private banks offering a full range of services outperform their investment manager counterparts in client satisfaction, according to new research.

Over a four year period from 2006, private banks offering a full range of money transmission, credit facilities and financial advice had achieved an average client satisfaction rating 13% higher than firms offering only wealth management, the research from by strategy consultants MDRC found.

Private banks Credit Suisse and C Hoare & Co achieved the highest satisfaction rankings. ‘The breadth and depth of services provided by private banks is appealing to clients more than what investment managers have to offer,’ said MDRC’s managing director Richard Williams. UK investment

He added that investment managers also scored badly because they often relied too much on discretionary management of clients’ assets. ‘Since the credit crisis, wealthy investors have wanted more control over their investment portfolios, preferring advisory services over discretionary management of their assets,’ he explained.

However, client satisfaction overall has fallen. The MDRC research, which surveyed 3,800 high net worth individuals, found its client satisfaction benchmark index across the wealth management/private banking spectrum fell more than 4% to below 60 last year.

The overall results were pulled down by a big fall in client satisfaction levels for those private banks and wealth managers in the bottom quartile where the benchmark index for these managers fell 11% last year. Top-quartile firms saw satisfaction levels fall by 2.6%.

Williams said that despite private banks scoring higher than investment managers, some banks rated poorly. He would not disclose names, but one particularly poor performer was a large UK bank. ‘There are some banks and investment managers contacting their clients no more than once a year, which, given the fees they are charging, isn’t endearing them to their clients,’ he added.

This trend is supported by research from Citi Private Bank and estate agent Knight Frank in their Wealth Report 2010. The report found that the majority of high net worth individuals who took part in the survey ranked their own expertise as the most important source when making investment decisions, then that of their peers. Wealth managers came third.