I’m a Bank Insider: How Banks Serve the Ultra Wealthy
Written by
Cynthia Measom
Edited by
Amen Oyiboke
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High-net-worth individuals (HNWI) don’t approach banking like the average person. Their expectations, needs, and relationships with financial institutions differ, meaning banks must adapt their services to meet HNWI’s demands.
“High-net-worth individuals tend to have relationships with multiple banks, rather than just one like the typical customer might,” said Marlene Windmiller, managing partner at ARI Financial. “Their relationship with each bank is often more personal, and they may want a singular point of contact for support, rather than working with a different associate each time.”
Here’s more on how banks serve the ultra wealthy.
How Banking Relationships of High-Net-Worth Individuals Differ
“High-net-worth individuals are more likely to be entrepreneurs or business owners, so they will be seeking additional assistance in those areas rather than only a typical checking or savings account that might be satisfactory to a normal client,” said Windmiller. “They’ll also want access to products and services that focus on protecting and growing their net worth, especially when it comes to investments like alternative assets that may not be as commonly found in the accounts of a typical client.
“While the average client may not be looking for services like estate [and] succession planning, HNWIs will also have relationships with third-party vendors, like us, who can help facilitate that with banks. HNWIs may also have multiple citizenships, which requires banks to have relationships outside of just the United States.”
How Banks Build Trust and Long-Term Value With HNWIs
“Financial institutions can build trust and deliver long-term value to high-net-worth clients by consistently providing them the fast and flexible service that they expect,” said Windmiller. “Institutions can leverage their relationships with other institutions to help provide custom services that aren’t usually available to other clients, like greater insurance coverage and help with business transactions.”
Windmiller added that another way banks can demonstrate to HNWIs that they value a long-term relationship over short-term profits is to offer more competitive prices than competing institutions offer.
How Banks Are Adapting Their Services To Cater To HNWIs
“Since HNWIs tend to be very business-forward, banks are thinking, ‘Can we offer them greater insight or capabilities on that side?’ ‘Can we offer access to decision makers who can help them with their business-facing issues?'” said Windmiller. “For these individuals, banks are starting to provide help for both personal and business problems, which deepens the overall relationship.
“Younger, entrepreneurial-minded HNWIs are also more likely to have multiple citizenships or passports than a typical customer, so demonstrating value on the international side is also important to keeping these clients.”
What HNWIs Look For in a Bank
Windmiller said that overall, banks can retain their high-net-worth clientele by consistently demonstrating that they value the relationship by offering customized, efficient services that are not found easily elsewhere.
“With our clients, we’ve found that once a bank is able to demonstrate their ability to solve business-related issues, they may be more likely to bring their personal accounts over to that institution, or vice versa,” she said.
Windmiller further explained that while many HNWIs have relationships with multiple banks, the more the bank can offer them, the deeper and more long-term their relationship will likely be.
Consequences for Banks That Fail To Meet HNWI’s Expectations
Windmiller said that, in a hyper-competitive market, HNWIs often have several banks competing for their attention. “So if the relationship isn’t working out, or a bank isn’t meeting expectations, there’s always the chance that these clients go to someone else who is offering them what they’re looking for,” she said.
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