CLASS #12 Getting, Keeping and Serving Clients

CLASS #12 Getting, Keeping and Serving Clients - GETTING,...

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GETTING, KEEPING AND SERVING CLIENTS MANAGING EXPECTATIONS Understanding and managing client’s expectation is the greatest problem for the private  banker. Today’s client has greater knowledge and sophistication- which means that there  is also a far greater expectation of service and performance. Many clients are concerned with absolute not relative performance: no matter that they  have achieved a 2% improvement on comparative indices; in recessionary and low  interest rate times, what counts is the amount returned. In periods of high inflation, the  argument for relative performance is easy is easy to make: positive absolute performance  can be associated with a positive decline in real wealth. It is imperative that relationship officers know their clients well, and to know their  requirements even better. Techniques of benchmarking expected performance are of  increasing value, as are a variety of measures of performance. Clients need some solid  comparisons because after all they are investing their own money. Quite naturally, clients want to outperform markets when they are going up, and not to  lose money when they re going down- an idealized desire which is unfortunately not  achievable.   That   means   that   management   of   client’s   expectations   must   exclude  underselling  the possibilities  and overselling  expected  gains. Since expectations  are  largely determined by historic experience, when markets become more expensive and  therefore more liable to produce poor results, the client is likely to be looking for  mounting figure returns. The hapless advisor may well be just as optimistic, and perhaps  is in the most difficult position of wanting to develop short-term business in what should  be a long-term relationship. A great debate in private banking exists over product-orientation and client need. While it  is clear that all banks rely heavily on a perception of service as a main attractor, there is  no doubt that clients are sometimes attracted by a specific product or package. This is  particularly true of competitive bidding for client business.
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-2- Certainly private banking satisfaction relies on brilliant service, and it is achievement  against the myth of service, which will differentiate between competitors. Customers are  forgiving over many things, even over less than expected portfolio performance- but send  out an incorrect statement, or forward mail to the wrong address, and considerable wrath  will ensue. Matching culture, skill and style between client and relationship officer is extremely 
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This note was uploaded on 03/05/2011 for the course FIN 4663 taught by Professor Martinez during the Fall '10 term at FIU.

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CLASS #12 Getting, Keeping and Serving Clients - GETTING,...

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