What defines a great private banker?

What defines a great private banker?

David Newman 22nd January 2021 David Newman, Co-Founder and Chief Commericla Officer, Delio

Over the last five years, we’ve had the pleasure of working with some of the world’s leading wealth managers. The experience we’ve gained through these relationships, alongside our team’s knowledge gained as employees and advisors to a diverse range of institutions, have enabled us to give a unique perspective on a crucial topic; what makes a great private banker? Our co-founder, David Newman, outlines some of his thoughts on the topic.

Show empathy and care about your clients’ needs (in the way that a bank doesn’t!)

Some will call it compassion; others will call it long-term thinking. Either way, a private banker needs to remember that clients will not be interested in everything you sell them. In reality, they want to be understood, and they want to find solutions to the obstacles or decisions they face. This is where a private banker can play a fundamental role; yet, it’s essential to do this on a human level. Don’t use this time to promote your product offering. If you genuinely care about the issues your clients face, help find solutions without worrying about how you get paid. In doing so, your relationship is bound to flourish, and your clients will have trust in you to do long-term business.

Focus on being interested and interesting

Having an opinion on the world and how current affairs affect both your industry and your clients is essential; that’s a given. But beyond that, it’s important that you find out about what matters to your clients, not just in terms of their business, but more personally, too. What are their hobbies? What interests them? You don’t need to fabricate or make up opinions, but try to understand your clients’ interests. Find parts of their industry that fascinate you. Show your clients who you are, what drives you, what interests you, whether that’s your hobbies or causes you follow. Nobody really wants to spend time with their private banker, so make people want to spend time with you because they like talking to you.

Talk about your business plan

Most of your clients will know how to run a successful business. By sharing your business plan, talking about your targets and discussing your lead generation strategy, you invite clients to be a part of your story. They may even share their own experience and insights, strengthening your relationship. By understanding your journey and feeling part of your growth, your clients are more likely to be invested in you and stay loyal.

Build a community 

As a private banker, you are surrounded by a range of intriguing and successful people, and it’s imperative that they learn to make the most of this varied network of connections. Create an ecosystem, and provide an opportunity for your clients to meet each other, engage with each other and discuss their businesses. At Delio, we often find that the people we work with are interested in meeting and learning from one another. Using this network will create client value and allows you to bring clients and prospects together while making a name for yourself as a relationship builder.

Cold approaches work – if it’s researched, personal and authentic

Cold approaches are still effective – when done right. While nothing beats a client referral, private bankers cannot build a repeatable, scalable, sustainable pipeline solely on referrals. Yet, with a limited and discerning target audience, private bankers need to do their research and not send out cold emails blindly. Discover what moves prospective clients, understand their needs, business, and advisers. By finding common ground, the initial cold email can turn into a warm lead. Remember, nobody wants to read three long paragraphs about why you might be the right fit for them. Keep it short and simple.

Determine what makes you stand out

It’s essential to take the time to understand your competition and the market. In doing so, a private banker can identify what people want within the market, but they can also discover both their own strengths as well as those of their competitors. By placing yourself in your competitor’s shoes and trying to understand how other banks tick, you will soon realise how you should position yourself and set yourself apart from them. More so, remember to be honest about your competitor’s strengths. Not only does it make you more genuine and professional, but it can also benefit clients who need to be multi-banked regardless.

Build a small number of critical intermediary relationships

Frequently, bankers try to connect with every potential intermediary in the market and spend years waiting for them to introduce a client. Instead, focus on fewer, but stronger relationships that are built on respect; these are more likely to lead to referrals. We’ve found that building five to seven core relationships across private equity, corporate finance, tax advisers, etc. is much more effective through our own experience. Build those relationships, cultivate them, understand what motivates them and think about how you can help and drive value for them again and again.

You have to be prepared to fight for your clients

Clients can tell which advisors are on their side. They need a private banker who they can trust to fight for them. Many great bankers fight hard to make sure the client is as hidden as possible from the bank’s inner workings and will advocate for the client. Yet, only a few would genuinely be prepared to call up their CEO when they believe internal conflict is getting in the way of doing the right thing for a client. Be that private banker!

Build internal relationships

Being prepared to fight for your clients is far more comfortable if your colleagues know and believe in you, understand your context and know you empathise with their point of view when things don’t go your way. Building internal relationships at all levels is key to this. You will need the support of a junior administrator, the head of credit risk, an onboarding specialist, senior management, a banker in a different location, all at different times in your journey. Take the time to learn from them, understand their roles, challenges, pain points, and work together. Establishing honest and collaborative relationships benefits not just yourself but also your client.

You are a jack of all trades

Building internal relationships and leveraging them for clients makes better client outcomes. Your role as an advisor is to be the one who understands the clients, their problems, their goals, their ambitions and needs, and to be the one who presents solutions. While you’ll never have all the answers, there are many talented people around you, who might be experts in tech, financial growth etc. and can help you solve clients’ problems. Leverage this. Some of the best bankers introduce specialists to their clients or spend significant time searching for solutions alongside their peers. 

Show respect to everyone

Respect plays a crucial role in any industry. Whether you’re a CEO or someone’s assistant, it’s important that you appreciate the people around you. Time and time again, you hear stories whereby people have shown a lack of respect towards others within a company, in particular towards secretaries and assistants. But it’s necessary to remember that regardless of your experience, your employer’s PA probably earns more than you when you first start. More so, their opinion of you can affect the view of your employer or a prospect. Give yourself that daily reminder that first impressions are quickly made and are difficult to change. No matter who you encounter and in which environment, treat them with the respect that you expect to receive yourself.

Your manager is not the best banker

Managers don’t need to be the best bankers, and that’s ok. Regardless of a manager’s job description, one of their key priorities is to their teams. As a manager or someone working towards that position, make sure you understand the business and all the different banking components. For example, RoA, FTP, banker payback periods are useful data points that shouldn’t be overlooked. Similarly, FCA papers are insightful and should be given the same time as the latest FT articles. However, the best way to become a better private banker is to learn from others. If you want to be the best banker you can be, make the most of the senior bankers around you and learn from their diverse skill sets. 

Risk is not determined by a questionnaire 

Risk assessment is challenging. Regulators demand it, and internal controls standardise it, while clients’ investment strategies are built on it. That’s why assessing risk via a standard questionnaire isn’t good enough; regardless of how well-structured it is. Your questionnaire should confirm what you already believe, and as such should be much more targeted. Before undertaking risk assessments, take the time to understand the specific risks to your client and their investment and life goals. More so, make sure your clients understand the risk themselves and feel comfortable talking to you about them. Most entrepreneurial investors would argue that investing in a balanced portfolio is riskier than in an early-stage start-up in a sector they understand. So it’s crucial to remember that your clients’ risk appetite is often higher than you’d imagine.

When dealing with new clients, especially those who recently accumulated their wealth, it’s important to encourage them to familiarise themselves with investing and the financial markets before diving into them. After 6-12  months of simply trying to understand the markets, it will be a much easier time to go through the risk assessment with your new clients, as they will have a better understanding. Not only is that more likely the right thing for the client, but it also helps gain their trust.