The wealthiest clients not only have more demands and needs across both sides of the balance sheet they increasingly want those needs served wherever they are.
"The world has become more global and clients have become more global. They expect to be able to work with the entire bank," says Chip Packard, co-head of wealth management at Deutsche Asset & Wealth Management.
As part of our special report on the state of wealth management, Deutsche executives Jerry Miller, head of asset & wealth management, and wealth management co-heads Haig Ariyan and Packard spoke with On Wall Street about their growth plans in the U.S. and how the firm aims to serve the needs of the ultra-wealthy.
"There are more clients with wealth outside the U.S., and being able to serve them locally is very important," says Packard.
What is the current health of the wealth management industry?
Ariyan: When one considers the changes weve made due to the financial crisis, we are better positioned for stronger future health than we have ever been.
Miller: I would add to that the intensity of competition. So many newcomers have come into the market. This used to be a market serviced primarily by [brokerages and] banks. Now there are RIAs, robo advisors. These [newer participants] have raised the game for the entire industry.
Whats the industrys biggest challenge?
Ariyan: In my view, its the stability and retention of talent, and identifying and maintaining the talent that meets the demands of clients and of the financial environment. The requirements of being a top-quality financial advisor today are significantly more intense than they were pre-crisis. The clients are smarter, demand more from a trust standpoint, and the level of sophistication we require of advisors reflects that.
Miller: I would throw into that mix the development of talent. It is one thing to bring the talent in-house, but it doesnt end there. The continued development of talent across the industry is costly and takes time.
Is the industry attracting enough younger advisors?
Miller: I think frankly that larger firms are more challenged by the sheer numbers of people. We [at Deutsche] operate within an ultrahigh-net-worth and high-net-worth client focus, and having teams that can bring all the things needed to bear is critical.
Packard: Our intention is not to be the biggest in terms of number of advisors. Our goal is to be a leading provider of customized wealth solutions to high-net-worth and ultrahigh-net-worth clients.
How are client needs changing?
Packard: No. 1, there is much more of a focus on advice-driven relationships with their wealth providers. Two, there is much more awareness and demand for risk management. Three, especially in the high-net-worth segment, there is a real demand for global wealth management. There are more clients with wealth outside the U.S., and being able to serve them locally is very important.
Ariyan: In the post-crisis world, more of the clients in the ultrahigh-net-worth segment are focused on wealth preservation rather than wealth creation, yet at the same time are very opportunistic. So we have developed our model to be very responsive to developments and trends and to deliver to a very sophisticated and demanding client.
Have the global needs of wealthy clients grown in the past decade?
Packard: I think they have. The world has become more global and clients have become more global. They expect to be able to work with the entire bank. That doesnt just mean wealth management in the U.S., Europe and Asia. It means the investment bank.
Where will Deutsche look like in five years?
Miller: We are growing as a wealth management firm. Youll continue to see us grow on the West Coast and in the energy belt, but not at the expense of other markets. In terms of what we do for clients, we want to be a leading advisor in terms of the investment management piece and the liability piece. We want to be the lead advisor to both high-net-worth and ultrahigh-net-worth clients across the U.S. And we will continue to invest in our business to make sure we can [fulfill that ambition].
Ariyan: As the market continues to evolve, leaders are becoming fewer and fewer. We want to continue to be the most sophisticated market provider to a specific market segment. I think in five years that leadership role will be more crystalized.
How will you achieve that?
Ariyan: Deutsche Bank is very focused on enhancing our brand familiarity in both North and South America. While Deutsche is a very familiar brand, our brand in terms of client mind share is not where it needs to be. Were very focused on increasing Deutsches community involvement throughout the States as well as South America.
Miller: [In] both North and South America, being under a single brand gives us an opportunity to educate clients about the broad range of services we can offer.
What most worries you? What keeps you up at night?
Packard: Client-centricity thinking and worrying about things that worry our clients, and delivering solutions to them before they even realize they have a need.
Miller: I would highlight two other values. First, integrity has never mattered more. The bond of trust is hard to win and easy to break.
The other value is partnership. We are providing a great value proposition for our clients and for people who work at Deutsche while never forgetting that the communities [we work in] are also critical partners.
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