Meeting Changing Client Expectations

Hello and welcome to the Philanthropy Impact Podcast. Listen on for insights into philanthropy, impact investing and sustainability. Hi everybody and welcome back to Philanthropy Impact's Walking My Shoes series, where today our panel of experts will be talking about how to meet the expectations of the new generation of clients.

I'm Zophia and I'm your moderator for this series. As a membership not for profit, we have the mission to increase the flow of capital for good by enabling private clients and their families to match their purpose-driven wealth strategies with their values. capturing the sustainable impact investment and philanthropy preferences across the spectrum of capital. We do this by working with professional advisory space to offer networking and educational opportunities.

So, this series is very much part of the membership offering with Infilanthropy Impact and a great way to stay connected to the issues facing wealth holders, looking to create impact and to showcase new innovations and trends in this. quick house rules. As this is just a 30-minute session, we will go very quickly. So we don't really open up the floor for QA, but we do encourage your views and questions via the chat for our panel. Please feel free to introduce yourselves there as well.

This is being recorded and it will be available later on on. Today we are joined by Rowan Jackson, who is the founder of Promising Outcomes. They offer a unique service to businesses that measure and improve stakeholder experiences using expectations, excuse me. Um also we have Stephen Wall, who's the founder of the Wealth Mosaic, a digital vendor directory and knowledge resource for wealth firms.

And Ajit Dial, who's an investment expert and founder of Quantum Asset Management Company and Help Your NGO, the online platform. I'll now hand over to you, John, to make a start. Thanks very much.

Well, thank you, Sophia. So the title today is Professional Advisors Meeting Chine Changing Client Expectations. So there's a uh there is uh a great transfer of wealth happening, Gen Z, millennials, women of wealth have different needs and expectations and want different approaches from their professional advisors. They see using their capital for good.

So I would like to start off by asking each of the panel members what they see within their areas of changing needs and expectations of clients and how uh the um professional advisory marketplace should be reimagined. So I'm just not talking about uh the finance industry, wealth managers, but also tax legal private banks, et cetera. Anyone who's dealing with very wealthy private client uh services. So let's start off with you, Steven.

Thank you, John. Um I think in general I see a move from uh inside out to outside in. So the way the wealth management industry was built historically was what could it do almost for itself and uh and clients were a factor in that and they were clearly the ones paying for it, but it wasn't necessarily industry that was built for them. Um I think in a world that's far more connected now where there's so many more different sources of influence and interest and data and knowledge.

wealth management is now relearning itself and having to build its business based on a view of what's coming in and what clients want and what the world is saying.

should be done rather than that internal view of how they should run their business. So that's causing a lot of change. Um one of the big things that we see is the role of technology. Technology is now absolutely at the heart of building a profitable, relevant and differentiated wealth management business, which is not how it was historically.

So just before I go on to the others, does that mean that the uh um uh people want more relationships with their advisors and that the transactional approach It becomes so efficient around technology that the point of differentiation with advisors will be relationships. I think it'll enhance the relationship with advisors. If historically you would meet your advisor once a year, receive a report that was

uh annualized and perhaps a month out of date by the time you received it, that actually the relationship was relatively limited and it was held in the mind or the notebook or some other um static mechanism of a relationship manager. Now with technology with data analytics, with communication tools, with um content platforms, all sorts of different things you can actually significantly enhance the relationship and institutionalise it for.

a wealth manager rather than perhaps have the risk of it being embedded within one relationship manager who then might leave. go somewhere else, take the clients with him. I think technology offers a fantastic opportunity for we look at it from three pillars. Good for the client, good for the advisor, relationship manager, good for the business.

Great, thank you. Shit, um, uh, what is your perspective on the changing climate needs and expectations and how the industry can be supported by the kinds of things you're doing, but also be reimagined? Yeah. So I'll give you perspective really from India. And you know, I started an investment firm in India three decades ago.

And uh uh 20 years ago I started helper NGO to be a directory to bring more transparency on what NGOs do. And I think in the Indian context, there are two things happening. One is that individuals, wealthy or otherwise, have been keen to give money, but they're always nervous about how the money is being used.

And help our NGO kind of solve that problem by bringing more transparency to the NGO world. And then the next one was the big step by the government of India, and Faz I know the only government in the world which has mandated companies. that make profits beyond a certain level.

to give away two percent of their money to what they call CSR, corporate social responsibility issues, things that you know will look after the STG 17 goals and other charities and things in India. So I think both these things are very important because they forced level of transparency. And going back to what Stephen said, what we're doing in the mutual fund and helper NGO is using technology to allow individuals to direct

the money that they wish to give and to look at the reports and the outcomes, if you will, of what the impact is or what to think. We we don't measure impact, but we'll talk about that later. But we are using technology to allow more NGOs To get access to a larger group of money and get the donors on our side by saying that they'll use our platform because it's more transparent.

So is is part of what you're doing reflect the reimagining of the role of professional advisors? Because what we're seeing is that a lot of of uh clients of professional advisors now um uh especially millennials, Gen Z and Women of Wealth, but also uh the boomers are starting. They want support from their advisors on their on their donor journey, on their philanthropic journey. Are are you seeing that that in effect what you're doing is helping to reimagine the role of professional advisor?

Yes, absolutely. I mean, if you look at the CSR, our team reports to the boards of the foundations or the companies every quarter, you know, and they give them a whole document on what's happening and effectively also advising the donors. where the money is would where the money could have been used better because every every donor may have a desire to give uh to fund project A, but our job is to say project A may not be the best place, maybe project B, C D.

is where you go. So at the at the HI level, at the corporate level, at the wealthy uh person level, that's what we do. And we use technology to give a more dumbed down version or a more simpler version of reports to a mass market, if you will. So, um, and uh you talk about this has uh been established and functioning quite positively in India, but do you see it applying to the professional advisors in uh the UK and across the EU?

Well, I think in terms of the wealthy clients, I think it is already more advanced here than in India. But I think in terms of the mass giving or reaching out to more donors who may want to give a hundred thousand pounds or fifty thousand pounds, I think the UK. And the US are actually backward compared to what we started doing in India. It's yet to get scale, but we're probably ahead of the curve right now in terms of the application of technology.

That's really clients clients want this kind of support. So Rowan, from your perspective, and in terms of the general question I asked about changing client needs and expectations. But you need to know why I use the word expectations as opposed to knees. And uh what is what is this impacting on, how is this all impacting on the industry as it being reimagined?

Yeah, absolutely. Um, and I it's very fundamentally important to to recognize that there is a separation between needs and expectations. They are two completely different things, and um, many organizations Don't actually realize that, and they don't actually understand expectations and tend to focus on needs. Needs are necessary, but they're not sufficient.

And I think that's an important f first base position. So if you take the average high net worth individual who wishes to have a wealth management or private bank or an advisory firm working with them mae'n ymwneud â'r pethau sy'n ei wneud, mae'n ymwneud â'r pethau sy'n ei wneud, mae'n ymwneud â'r pethau sy'n ei wneud.

that but that the the actual expectations are much more uh complex to understand. And they are really about the relationship, they're about the service side, they're about the support side that they get as as customers. And what is important here is that in the pandemic Consumer needs in the main haven't changed a great deal, but what has changed dramatically is expectations.

I if I give you a very simple example, my wife and I ordered some food on a supermarket website. We never got the food because we couldn't get a slot for delivery and we couldn't get into the call center to get it delivered. So what do we do? We went to the competition. That's a good example of the difference in needs and expectations. Our needs have not changed. We need food. But our expectations of how it gets to us have changed dramatically.

The second piece of this story, and we we carry out research all the time, and we're a research consultancy firm. And one of the key things that our our clients, customers are telling us, is the point that both Stephen and Adjun are making, which is that If you don't have a digital client experience, combined with your inter interpersonal experience, then you're going to fall behind.

And one of the common experiences we're seeing in the research that we carry out is that that digital experience, and this is right across the board, is the weakest element of all the wealth management firms that we were researching at the moment. So uh Ford said if I'd ask people if uh what they wanted, they would have said a faster horse. Um how does this fit in? Because we're talking about needs.

expectations, innovation. So he innovated by coming up with Model T. So how does your um whole thing around expectations fit within that context? Because I haven't heard the word innovation in what No, and and you're quite right. And one of the we get this asked a lot and one of the key things that we have to understand is that when we're asking the the clients of our or the customers of our clients for their expectations.

We're asking them to describe an ideal situation. And they do that from the current frame of the world. They're not in a situation like asking for faster horses or, you know, they're not asking for an iPad when they didn't know an iPad could exist. That that is something which takes a different type of research. However, there are a couple of things I need to say about this. A lot of the organizations we work with, they actually thinking that innovation is what is key to their success.

When we do the research, innovation doesn't come up at all. What they want their suppliers to do, and this is this is particularly with high net wet high net worth individuals, is get the basics right. Can you actually deliver what you say you've got to deliver on time and in the way that we want

And can I have the relationship as as Stephen was saying, with not just one person but with the whole bank or the whole wealth management organization? So the the the faster horses issue is a different issue, it's a different research issue. Um, but some of the organizations who say they want that sort of thing discover when they do the expectations of research, it's not on the on the mind of their uh client.

Okay, great. Thank you. Stephen. Following up on that, what are the pitfalls facing traditional firms? uh who aren't yet um uh digitally uh up to date and try to figure out what word to use. And then where does innovation uh fit in all this, especially within the context that Rome was just described.

Yeah, well I think the the biggest pitfall is ultimately you'll be out of business at a certain point in time, right? There's not so long to wait until all of these things will be uh need to be in place. Um I still think the market has time. Um I think Technology is a very interesting thing because buying a solution is not uh solving a problem. It's buying a solution and spending money. Um, all of this needs to be embedded with the strategic

um viewpoint of the firm, who they are as a business, who they service, what those clients want, the leadership of the business is very important. So I think buying technology on its own is not a solution to the problem. Um I agree with Rowan with regard to innovation. Um, it can be misleading. Um, I don't see a lot of innovation in the market, but I do see a lot of developments. And I think firms just need to keep a pace with the competitive landscape, what is expected by clients, advisors.

What do their competition do? Innovation is perhaps misleading because that's very difficult to deliver. Um Firms just need to make sure they have the basics in place. But getting the basics in place with regard to technology is just not, as I mentioned, is not just about buying a piece of tech. It's how is that tech used, who is it used for, how is it integrated with the data stack, how is it integrated with external providers. It's much more complicated than

buying a piece of software off the shelf. John, can I add to that? Because I think there's there's something else here, which is picking up from what Stephen's saying. The innovation that high net worth individuals are looking for isn't necessarily, you know, the sort of the new whiz-bang piece of kit. The innovation is more to do with can you make your process simple, fast and easy to use?

That's the type of innovation they're certainly looking for. And you and I have been on a panel before and I gave the example of a personal example where I opened up two bank accounts and asked for online banking in both. One took seven months to give me that, and the other took seven minutes. That's the sort of thing where innovation is needed.

Of course, the the seven-minute one, which is the one I prefer to use, is actually one of these fintech businesses. And the nature of what's happening in in sort of if you like in innovation is taking something which exists. And just making it substantially better.

It's not about creating something absolutely fabulously brand new and different. And that's that's I think we need to define what innovation means in this sense, because it's a it's very, very important to recognise that there's huge scope. for innovation in the existing relationship activities.

No, thank you. As you uh come out of the finance industry, um and now you're applying some of the learnings from that. Uh can you talk a bit more about how you've transferred that knowledge and those skills? So going back to what Roman just said, it's not that we had a new idea. We just took what's available out there, the technology that Steven referred to, put it all together, and came up with a very simple process, a literal one button click solution. Or someone to donate, someone to select.

the objective what they want in terms of which NGO, which field they'd like to help someone in. And then how much money they'd like to give? Yeah. And also comparisons in terms of if they were to look at Project A versus NGOB versus NGOC, et cetera, which is the more efficient one in terms of spending and reaching out to more people in different geographies.

So by putting all those data sets together, that's really what we've done again, going back to what Stephen spoke about and going back to what uh going back to Roman said, which is rather than waiting seven months to get this. You can do it like in seven seconds or seven minutes or a few minutes on our website. But that's for the person who doesn't want to be physically engaged. And I want to, I want to compare this and contrast this to investing in a listed stock.

versus being, for example, an investor in a private equity fund or in an unlisted company. If you're a very large endowment or or or very large uh for family office you tend to want to influence and guide what the outcome is So just like a private equity investor in in an unlisted company wants a seat on the board, wants to see what's going to happen, what we've seen among the larger donors, the corporates and the foundations is that they want to, in my view, sometimes on what the objective is.

of the NGO they're trying to fund. And that sometimes can be, you know, jarring because they've got the money and the NGO or the foundation wants the money, but along with the money comes all these lists of things which they may not really want to do, but they do it because the money is there.

So what we again going back to what we learned on the investment side, when you invest in publicly listed stocks, you don't have control of the management, but large foundations, as they would in uh the PE space. want control and do sometimes, you know, mess up what that foundation is trying to do. So that's kind of our learning is to see how do you let how do you push back to the uh to the wealthy donor.

That you can't influence everything. You can have criteria, but you can't really try to get the outcomes that you want. It's your donation and it's their effort that will result in the best outcomes in our view. So when uh um I'm gonna question one of your basic assumptions if that's okay. Um when you invest in a business.

Do you invest in the percentage of administration that um um uh exist as part of that business um because I get a sense that the percentage of administration is one of the criteria that's using use, but you but you wouldn't do that if you're investing in a company. You're uh if you're asking me, so you know, if you would, because if if you've got three stocks in cement or steel to look at, you would of course want to know who's more efficient.

But you may also, as a charity donor, as someone trying to donate something, you may also wish. to further a cause in your city or your hometown or your zip code where you grew up. And then those criteria about equating administrative costs don't come in the picture because you've chosen a different uh a different focus area.

Which is I grew up in City A and I want City A to prosper as opposed to the best organization across the UK or the most efficient one across India. So you get to choose the criteria you want in that sense. But you don't measure impact. You don't measure outcomes. We don't measure impact, but we because you know, like like we always say, if you give me money to feed a street child in Bombay.

I can it'll cost you more than to feed a child on the street in a state of Bihar, one of the poorest states in India. And you know, I can't measure half a smile of that kid in Bombay to a full smile of the child in Bihar. I've not found any great consultant who can tell me which is better. They both have had an impact to the person's life.

And I think at the end of the day, it's for the donors to decide, you know, in terms of geography, in terms of what they want, rather than saying the child in Bihar has got a full smile, and by the way, it costs less. to feed the child in VR. So all the money should go there. And don't invest in the child in in Bombay because Bombay being an urban city is much more expensive. And at best you can get half a smile from the child in Bombay.

That's it to me, that's impact measurement. And I don't like it at all. Okay, well that's going to create a bit of controversy, I think. From a client expectation perspective, do you think that as its approach makes sense? Yes, I think it does. And one of the interesting things is that uh not necessarily with the the the poor children in Bombay or some of the places.

But I think there are beneficiaries of charities where you can actually measure the expectations they have and indeed then measure the performance against those expectations. And we have done work with an NGO which has actually done that. The other aspect which is actually useful is you can measure the expectations of donors as well.

uh and then how well did the charity or the NGO actually deliver on those expectations. And again, that is possible to be done. So measurement of those two things, the expectations and the performance against them, is possible. Uh I I don't say it's easy.

Um, and I think this is the point that Adjik's making. Um th th there is a necessity to do some work on defining who the beneficiary is and what actually uh their expectations are. So one of one of the key characteristics of expectations measurement Uh and this is something which takes a little bit of understanding by quite a lot of organizations, is that uh you need to actually go out and find out what they are.

And so there's always a first step, which is qualitative research. And this is what promising outcomes does. And we then find out how well do they perform against that qualitative set of expectations. And so we can measure this. Um it it's for some organizations completely novel. They never had this sort of measurement before. uh and uh therefore it takes a bit of getting used to. But once it it's in place, it it's very, very easy to repeat it on a regular basis, which should be done as well.

So um where does greenwashing come into this? Because I it's this um If if you're uh looking in one city and you look at an organization and thirty percent of the revenues go into administration. You look at another city um and uh doing the same kind of service, but uh uh twenty-five or twenty percent goes into administration. Well

Where do you pick up on this? And if I I don't I know we've never applied the concept of greenwashing to this, but I think it's sort of an interesting thought. So can I just yeah, so I mean, you know, uh this whole talk about ESG, we actually wrote an article called Eye wash, og wash and greenwash with H G. And you should go go you should Google it. You'll find it on the internet. And um you know and sorry, eyewash, hogwash, and greenwash. E H G. Okay.

In in the field of investments, we've seen this. We know it exists. You've got the biggest mutual funds in the world who s who sign stuff and say they're going to do this. And they do the opposite on the ground in the stock markets, completely the opposite in the portfolio. uh but you know i'll go back to what john bogle said john bogle the founder of of the vanguard he said you cannot really you don't know the outcome but you know cost You know the expense ratio of a fund.

And he built a whole, you know, he built a whole mutual fund industry uh Vanguard, which is low cost direct to investor based on that. I'm not saying that you cannot measure the outcomes of the return. I'm saying that as a donor, and goes back to what Rowan said about expectations and needs of the donor, that you need to make them understand.

That these are the elements which will determine what the outcomes are. There's a certain cost to a child in Bombay, there's a certain cost to a child in other parts of India. And that will determine and change the outcomes. So I think if you put the expense and outcome, you know, in some kind of a level on a relationship and you explain it. Then going back to what Roman said, the expectations will be a lot better and in sync with what the NGO or the charity can actually deliver.

Yeah. I think I think to add to that, John, there's there's another element here'cause I I love eye wash, hogwash and greenwash. I'm gonna use that. I haven't heard that before, but it's terrific. I think there's an interesting element here, and this applies in many fields, not just in the NGO and charitable fields, and that is that in many, many cases there are projects. Let's say an NGO is doing a project in a particular field.

um where the project meets the needs of the donors, but it doesn't meet their expectations. And that is a very, very common experience that we hear of. Um and and you know, the provider of the project. frequently and uh the construction industry is a very good example of this, they say, Well, we met your needs and then and say, Why are you still unhappy? Well, because you didn't meet our expectations. And that's a very good example of the difference between the two.

And and I think, you know, that there are there's growing number of articles in the in the media about Greenwash. Um and of course the the the leader of Patagonia is is is a good example. Uh I think this is last week, wasn't it? um of of putting his company into the hands of the employees. There are other motivations for that, which I won't go into. But I think there is definitely a a huge amount of that going on. And um the there's increasing number of articles about

But it doesn't take away uh Ajit or Rowan from the need for a funder to do due diligence and stuff. So that's that's a compliment what you should have. And that's to go back to what Stephen was saying, that's where technology comes. That's where information flows, can reports can be tailor-made to suit the needs of the donors and their requirements. And I think that's very important.

Yeah, and I I I think uh also uh Robin mentioned this that uh that you know we also find that many, many charities don't even have websites. And if you don't have a website, how do you exchange information? If you can't exchange information, how can I attract a donor to give you money and do counts on you compared to your payer? And I think that's very important to start with that basic you know of need of information.

Thank you. Stephen, can we um we've talked a lot about philanthropy and supporting donors on their donor journey and and the approaches that uh Ajit were was talking about. Let's let's go back to professional advisors. and impact or ESG investing or whatever term we want to use because they're always misused in some way or other. But uh how important is tech and digital access to the new generation of clients? and uh what what forms of tech work today and what's coming in the future.

Um, it's extremely important, um, but let's not forget that there's an existing client base who it's also important to. So I often think this view of the future is great, but we shouldn't forget about the clients and what they want today. COVID was the perfect example of how tech needed to improve those industries. I'm going to send sorry, I'm going to interrupt just for a second to play a role and it's not what they want, it's what they expect. Ha ha, there you go. Ron Ron's jumping for joy.

So it's absolute it's a necessity and it's a necessity now. Um the industry's on its journey, um, but it's still relatively early in in in in its p movement forward. Um in terms of what's good and what's required, I mean there's loads of interesting stuff.

Um, I think if you think of it from the advisor's perspective, there's not enough use of CRM. Um, from a client and institutional perspective, client onboarding such as Rotro and reference can be really awful and a massive bugbear for the industry.

There's huge issues with regard to integration of technologies, them not talking to each other effectively, advisors having to log into 10, 15, 20 different environments to get a consolidated view, which is bad for them, bad for the client, bad for the business.

From a client perspective, there's some really great things now. There's some fantastic new reporting tools out there. There are some great investment marketplaces also in the area of ESG impact and philanthropy. Um, so there's a huge amount happening. Um But there's still a huge amount to do. Um, because I think yeah, just historically speaking, tech wasn't put at the center of the industry and now it probably should be. Yep. I I agree with that, John. I just want to add something to that.

We're out of time, Ron. Sorry. Oh sorry. Oh that's okay. Zophia's come on, which is my clue. So um I I uh I'm disappointed not to hear about the metaverse, Stephen. But anyway, we'll let that go. You shouldn't be. You shouldn't be, not yet. Okay, so uh if Sophie allows 30 seconds of final words of wisdom from each of you. Okay, so um um who wants to start? Ajit, do you want to start? 30 seconds, final words of wisdom.

Final words of wisdom are that every donor must know what they want to do, not overreach and then evaluate, then donate, which is a tagline of helper. Okay, great. Bron. I think it's the back to what I said earlier, which is you need to understand what the expectations of your high net worth clients are.

Rydyn ni'n gwneud, rydych chi wedi cael ei wneud. Rydyn ni'n gwneud hynny'n ei wneud hynny'n ei wneud. Rydyn ni'n gwneud hynny'n ei wneud hynny'n ei wneud hynny'n ei wneud hynny'n ei wneud hynny'n ei wneud hynny'n ei wneud hynny'n ei wneud. Um, one of the key things that we do in promising outcomes is we help them understand how their competition are doing as well. Most G executives absolutely love that. Okay, great.

Like it or not, I think technology will dictate the future of the wealth management industry and those who adopt it well will be the leading players.

Great. Okay. So we we're talking about professional advisors meeting change changing client expectations. What we didn't talk about was compliance to the new consumer uh duty regulations that have just been brought out, which will, I think, have a significant impact on conversations that advisors have. They will have to talk to them about their values, their motivations and ambitions. And um they'll have to learn how to do that. And one of the neat things uh is that we um

uh are uh very good at teaching advisors about how to have those conversations. And it's a tricky conversation. So And with that, Sophia, over to you. Thank you very much, Rod, Stephen, and Ashit. That was really fun. Thank you. Pleasure. Thank you. Yeah, that was good. Thank you very much. Apologies if. There was issues with the chat. We're not sure what's gone on there. Um, but we did get some some chat going on in the Q and A today, Ajit. Someone was agreeing with you. Um

Right. That's great. We're all done for this. I do need to say though that on the um eleventh of October we are doing this similar conversation, but real deep dive into all of the things John said that we haven't talked about. There should have been invites gone out, but we would really love to see you all there and have a nice drink and a chat and a catch-up around all of these things. But thank you all for your time today and we will see you in two weeks. Thank you. Thank you. Thanks everyone.