Bank Relationships Skin Deep

Affluent US households have 'very shallow relationships' with the bank they consider as their primary savings and investment provider, according to a new study by market management firm Phoenix Marketing International. However, few of them at present are going elsewhere for other financial services.

'In stark contrast to independent providers and many full service brokers, banks have a very thin relationship with their affluent clients' says David Thompson, Vice President of the Affluent Practice at PMI. 'As a result, we consistently see the satisfaction and loyalty scores for banks to be significantly below those recorded for independent or brokerage providers. Independent providers in particular have done a much better job at developing a deep relationship with their clients, which increases their satisfaction and also makes if harder to switch'.

Independent portfolio management or planning-based firms recorded the greatest depth of relationship with the affluent client. On average, nearly 80% of their affluent clientele obtained investment advice, 71% used financial planning, 54% obtained brokerage services, 36% included estate planning and 29% took tax advice from their independent provider.

The study suggests banks aim for more aggressive communication of their range of services, and make more effort to convince affluent customers that they need the deeper planning-based services.

PMI's Affluent Marketing Service (AMS) tracks trends, behaviors, and market size and purchase intentions in the affluent and high net worth markets on a continuous basis, defining 'affluent' as households having a minimum of $250,000 in investable assets and/or $150,000 in annual income.

The company's web site at www.phoenixmi.com

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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