By Joel Schlesinger
David Bentall, a member of one of Vancouver’s more renowned wealthy families, has never been one to pooh-pooh a perk or two from a wealth management firm.
“We’ve received tickets to the closing ceremonies for the 2010 Olympics and to [Vancouver] Canucks games,” says the former head of Dominion Construction (which merged with Stuart Olson in 2010).
“I definitely do not look for that or expect it,” says Mr. Bentall, now an adjunct professor at University of British Columbia’s Sauder School of Business and founder of Next Step Advisors Inc. “But it does feel nice to get the occasional, ‘Thank you, we appreciate your business.'”
Tokens of appreciation are common in service-oriented industries dependent on customer loyalty. But private wealth management – or private banking as it is also called – for very high-net-worth clients takes it to an entirely higher level.
Some of the world’s largest financial institutions are willing to go to great lengths to keep their multimillion-dollar clients happy, as well as to woo new ones.
Among them is Britain-based global banker Barclays, which has its Little Book of Wonders, offering everything from VIP tickets to Paris fashion shows to an 007-themed day driving an Aston Martin.
“It doesn’t surprise me that multinational financial institutions like that put together actual programs around this,” says David Sung, president of Nicola Wealth Management, a boutique private wealth management firm in Vancouver, whose clients include Mr. Bentall.
“Feeling truly valued and cared for – those basic human needs know no geographic or economic boundary.”
Even in Canada, perks are common fare for firms dealing with ultra-high-net-worth clients – though to Mr. Sung’s knowledge, they’re not formalized in a menu format.
“We don’t have an official book of experiences,” he says. “But we certainly aim to provide different things to our clients that have them at the end of the day feel they trust us, are cared for and that they have a good experience in working with us.”
Because of the highly personalized nature of high-net-worth wealth management, whether or not to offer perks is generally the prerogative of individual advisers.
“Advisers drive client service and perks,” says Andrew Marsh, president and chief executive officer of Richardson GMP.
These may be behind-the-scenes access to the Calgary Stampede or exclusive sneak peeks at Toronto International Film Festival exhibitions. “These kinds of things are fairly typical across the industry,” he adds.
Yet perks only go so far.
These clients “already have a lot of money, so for the most part, there isn’t anything – if they truly wanted it – their money couldn’t buy,” Mr. Sung says.
Instead they are more concerned with receiving “enhanced services” to manage often complex financial circumstances.
To that end Richardson GMP recently launched a family office service for clients with net worth between $10-million to $150-million.
“What we found is there is a really large chunk of market with families with this level of wealth that isn’t being served well,” Mr. Marsh says. “They value wealth planning, wealth administration and preparing the next generation as much or more than they value investment management.”
Private family offices are common in the United States, where there are more families with large sums of wealth. But in Canada it is mostly families with upward of $250-million in assets that choose to run their own teams of lawyers, investment advisers, business consultants, accountants and other professionals to manage wealth like a large corporation.
In contrast families in the $10-million to $150-million range do not have quite enough financial might to afford their own dedicated team. Instead, their affairs are usually provided by a few firms, and consequently, the advice may be fragmented.
“The service level we’re offering is almost acting as the family CEO and co-ordinating with all their other advisers,” Mr. Marsh says, adding this involves consolidated reporting of a family’s total asset base.
The wealth management landscape is changing, according to Mr. Marsh.
No longer is it sufficient to provide steady investment returns and protect capital. Canada’s ultra-high-net-worth families expect more. They want to pass their wealth from one generation to the next while instilling in their offspring a sense of good stewardship and philanthropy.
“That’s a different thought process than, ‘I’ve got to make that 6 percent a year,'” Mr. Marsh says.
Plans are customized, multifaceted and address interlocking needs for wealth preservation, estate planning, tax efficiency and legacy.
“They don’t want proprietary product shoved down their throat,” says James Porter, an executive vice-president with Cidel Asset Management. “They’re looking to be treated like individuals.”
And that’s where the perks can indeed play a big role.
“They may be able to afford these things on their own, but we try to do it in a way that is meaningful,” Mr. Porter says, adding the firm treated about a dozen clients who were “rabid Blue Jays fans” to box seats for Game 5 of last season’s American League Division Series against the Texas Rangers, a game that happened to feature Jose Bautista’s iconic “bat flip.”
But “high touch” experiences quickly dissolve if the financial services offered do not fit what the client is looking for. Just ask Mr. Bentall: The firm that gave him tickets to the Olympics closing ceremony no longer advises his family.
So while perks can say “We care,” Mr. Bentall says most people would “not base financial decisions on them.”