How client referrals can power wealth manager growth

In a world of unprecedented disruption, the battle for the client has intensified. Yet as the wealth management sector comes to terms with this changing landscape, the client is fast evolving – at the risk of outpacing much of the wider industry. Matthew Yates, Senior Vice President at Wealth Dynamix Americas, looks at the power of referrals in wealth management and the steps that firms can make to convert exemplary service to acquisition.

A new dawn

Disruption has become the new normal. The world is changing fast, and private individuals and the wealth managers at their helm are grappling with new dynamics, from geopolitics to emerging technologies and even new currencies. These shifting forces have dramatically reshaped the world as we know it, and not only are consumers getting better at weathering this storm, but they’re looking for the opportunities that lie within.

The last few years has seen a transformation in the makeup of the high net worth individual. Many wealth managers have traditionally managed clients with an average age of 65+ with long-standing relationships spanning 10+ years. But a new generation of wealth creators has taken the stage and redefined the possibilities of wealth on a personal and a professional scale. More mobile and empowered than ever, they are quick to evolve and expect more from their wealth managers – resulting in a growing void between the winners and the losers across the advisory spectrum.

Wealth is at an all-time high. More people than ever count themselves among the world’s wealthy, and the assets they hold have ballooned to unprecedented levels [1]. But as the industry undergoes widespread consolidation, it’s clear that wealth managers need to rethink the way they acquire new clients.

It was once a given that consistent performance and good client service would drive referrals, which would then translate into new business. But the tables have turned: while an impressive 85% of clients are willing to refer, only 3% actually do this [2], and as industry-wide client growth lags even further behind, there’s a clear disconnect between recommendations and business conversion.

With an abundance of low-hanging fruit ready for the picking, there are clear steps that wealth managers must take to sharpen their focus, adapt to this change and make themselves known to the prospects they want to represent in the future.


Intermediaries are a vital conduit between wealth managers and high net worth individuals and they increasingly look beyond relationships and returns when selecting wealth managers. As competition heats up and fees level out across the board, businesses must do all they can to stand out to this essential community. Investing in a seamless but transparent referral and remuneration process will pay dividends in securing repeat business in the long term.


Never have high net worth individuals been so empowered. Digital tools give prospective clients a bird’s eye view of the advisors and solutions at their disposal, as well as their long-term performance. And digitisation has brought onboarded clients even closer to their wealth, quenching their thirst to take control and evaluate their holdings at every turn.

As clients become increasingly international, prospective wealth managers are assessed on their ability to capitalize on digital while maintaining the human touch – regardless of location. Mastering this delicate balance is key to converting prospects to clients, and ensuring consistent client engagement in tomorrow’s world.

The client is king

Consumers are more vocal and connected than ever. Over the last five years, we’ve seen a steady rise in complaints initiated online. With historically lower client-to-advisor ratios, wealth managers have contained this dialogue more than other industries – but not for long. As an estimated $12 trillion wealth is set to transfer across generations over the coming years, wealth managers must adapt and engage with this new wave of wealth, who, led by the charge of the tech-savvy millennial, sees social as another channel for communication.

While digital is a clear game-changer, as regulation catches up with new advances, the industry will need to treat the insight it provides with kid gloves. And as data complexifies at the hand of increased consent awareness, including the impending GDPR [3] impact on EU citizens, the challenge will be to stay on the right side of data privacy.

Digital has enriched organizations with the data they need to understand the power of their networks and get a step closer to the clients of the future. With the right tools and a clear understanding of who they want to serve, wealth managers can segment, approach and then convert the prospects in their sights to clients. Thorough analysis of client demographics, their propensity to buy and recommend services – and the ultimate success of these referrals – should inform and drive business development and marketing strategies. But while other sectors may have paved the way in embracing these technological shifts, it is vital to remember that effective wealth management centres on trust: and digitisation should complement relationships – from the outset.

[1] Capgemini World Wealth Report 2017


[3] General Data Protection Regulation


Wealth Dynamix delivers Client Lifecycle Management solutions to the world’s leading private banks and wealth and asset management firms.

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