UK relationship managers spend only 43% of their time on “golden time” activities, including value-added tasks such as client interactions, investing, and business development, according to a study.
Wealth managers rated their productivity at an average of six out of 10, according to the by US-headquartered investment solution provider Sei, in collaboration with FoxRed Insight and Solve Partners. However, less than 10% of firms have established productivity measures discussed at the executive and board levels.
Unveiling productivity challenges faced by wealth managers in the UK, the research scrutinised productivity barriers in the front, middle and back offices of wealth management firms, suggesting reforms to address these issues.
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Several obstacles to productivity were identified, including organisational culture, poor communication, inconsistent processes, inadequate technology, unreliable data and compliance burdens. These issues are tied to deeper industry-wide root causes such as complex operations, client relationship models, technology implementation, and productivity measurement, it found.
The study found that 24% of firms with fully outsourced investment operations reported better work culture and productivity, with fewer issues in task hand-offs and processes. Partially outsourced firms faced twice as many process and data problems, while firms with in-house operations had intermediate productivity issues.
Gilly Green, founder and director of FoxRed Insight, commented: “While senior leaders often cite productivity as a top priority, the research shows critical areas where change is needed to help drive growth. Rethinking the client relationship model, aligning behaviours and incentives to desired business outcomes, and implementing technology well can unlock higher-quality client service and empower firms to shape the future of wealth management.”
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Jim London, head of SEI’s UK private banking and wealth management business, commented: “Outsourcing can help reduce costs, manual process errors, complexities, and time spent recruiting and training. One firm in our research saw a 30% to 40% rise in operational productivity through reduced costs and increased scalability after outsourcing. This investment allows firms to focus on improving productivity, increasing the efficacy of revenue generators, and enhancing the front-end experience.”
The study also found little consistency in the type of metrics used across the industry. Donald Reid, founder and non-executive director of Solve Partners, said: “Developing clear KPIs for productivity that relate to end-to-end, client-centric metrics can connect colleagues and processes to clearly defined strategic objectives. Agreed-upon productivity KPIs should then be independently tracked and challenged by boards, and success should be linked to individual and team performance.”
