Private banking clients in Germany are by and large satisfied with their banks and wealth managers, but nearly half still consider switching to another provider.
This is the main finding of the "Client Monitor Wealth Management Germany" for which the research firm MyPrivateBanking surveyed 300 wealthy private clients in Germany.
With respect to past experience, the clients rated the offerings and services of their banks with an average of 4.1 points (maximum five points) and gave the German banks good grades.
The financial crisis had no major adverse effects on client satisfaction. However, in the future banks will have to be wary of waning customer loyalty because, in spite of high satisfaction ratings, clients are keeping a critical eye on their wealth manager and are ready for a change, should a competitor offer better terms.
About half of the clients surveyed (49 per cent) see a conflict of interest in advisory services as the wealth managers receive kickbacks for a variety of products.
Another threat to the wealth managers is declining loyalty affecting high net worth and the younger bank clients in particular. Among the clients with investable assets of over EUR500,000, 47 per cent are considering a change and for those clients up to 35 years old, this proportion reaches as high as 57 per cent.
"Although most wealth managers got to grips with the financial crisis, a long-term erosion of client loyalty is evident," says Steffen Binder, director of research at MyPrivateBanking. "In particular, the key target group of young, affluent clients is now much more willing to switch banks if they feel that a competitor will give them a better deal."
In the assessment of the individual banks and groups of banks the small and medium sized private banks came out as the winners. The clients of these banks awarded an average score of 4.7 out of a maximum of five points. Runner up is direct bank ING-Diba which follows with 4.6 points. The large banking groups Deutsche Bank, Commerzbank/Dresdner Bank, Sparda Bank and the Cooperative Banks occupy the middle ground in respect of client satisfaction. The lowest satisfaction rates among wealthy clients have the Postbank with 3.6 points, and the savings and loans banks with 3.9 points.
"These results show that banks, which are uniquely positioned in the market have the most satisfied clients," says Christian Nolterieke (pictured), managing director of MyPrivateBanking. "The medium and small private banks differentiate themselves through the competence of their advisers and the clear focus on wealth management. ING-Diba has the clear positioning as a winner on costs. Lack of any differentiation, by contrast, leads to low client loyalty and satisfaction."