Wealth managers are sometimes hesitant and lack confidence in serving wealthy customers. How would you advise them?
When the client has significant wealth and is placing his or her trust in you to protect and grow his finances, it is a huge responsibility. To be worthy of that trust, one should listen intently to the requests of the client without over compromising company’s objectives. Often, such a lack of confidence comes from a misalignment of company’s goals versus client’s goals and this may confuse the practitioner in respect to his priorities and responsibilities. However at the end of the day, if you have a happy client, you will also have a happy employer.
How do you think the certification of a Chartered Wealth Manager, CWM™, could benefit today’s front line finance practitioners?
The Chartered Wealth Manager (CWM™) is aimed at developing best-in-class client relationship as well as sales and management techniques. In today’s sub-prime market, clients do not trust the markets easily nor the analysis and financial projections that asset management teams propose. They prefer professionals who understand their needs and to service their needs. That is the core skill that CWM offers – there is simply no other professional certification program that focuses on this part of the financial planning equation.
What kind of advantages do wealth managers receive after receiving the training of CWM?
We give CWMs better planning tools in managing their selling activities to their clients more efficiently. They get a better understanding of the difference between selling a product and providing benefits to a client. In the end, we help practitioners to work smarter, earn more AuM (Assets Under Management) and be better employees. Most of our CWMs perform better than their contemporaries and manage their careers more effectively after our program.
The CWM™ aims to develop high-performance wealth managers and is focused on delivering excellent services to their clients. It differentiates our members from their industry counterparts because they have the ability to see beyond product and ROI. It emphasizes to their clients how specific solutions can benefit them in the short, medium and long term.
How would you compare CWMTM with the other two certifications – CFA® and CFP™? How can we choose the right certification?
CFP and CFA are two excellent qualifications and both come well recommended. However, these qualifications were both designed 30-40 years ago and the Wealth Management industry has changed significantly since then. In the old days, we used to value technical and product skills very highly on the frontline and so the ‘analyst’ capabilities a CFA could offer were more valuable. Nowadays these skills are all back office skills, such as those you’d find within an Asset Management team. Clients don’t want technical specialists to talk to; they want someone who can explain things simply and in the context of their needs. If one is in the back-office, the CFA is an excellent choice, but on the frontline, client skills are more critical.
The CFP was initially developed for the insurance industry. However, the industry has evolved. Financial planning is now viewed through a more holistic approach in terms of protection and savings of client’s assets – basically wealth accumulation. These skills acquired from the CPF are applicable at the mass market level. However, once one crosses over to High-Net Worth clients, the skill set should be focused more on asset allocation and managing the client’s existing wealth. Such a characteristic should entail a different class of products. The skills acquired at HNWI focus more on client management, expectations and balance various risk/reward trade-offs.
Recently, you have spoken as one of the panellists in the Annual Symposium on Risk Management organized by KORNERSTONE. Do you think risk management is important for wealth managers nowadays? If yes, in which area?
It is quite simply the most important element. Why? In the current environment, if one cannot protect your client’s assets by managing risk effectively, one is of no use to them. While many investment firms focus on the potential return, clients today are just going to be happy staying ahead of the benchmarks and not losing money. Safety and protection comes first, service second, and return comes third. Risk management is an essential element in ensuring the protection of the client’s assets.
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