Growth lessons for Wealth Managers from Neobanks & startup Robo Advisors

Neobanks & startup Robo Advisors have seen unprecedented growth in the last few years and become an emerging threat to traditional firms. Their rapid growth has been fuelled in equal parts by technology, as well as lessons learned from previous generations of internet-era startups. But the good news is, you don’t have to be a tech startup to learn from their growth.

So what can a traditional firm learn from their tech-centric cousins? As it turns out, quite a lot. And fortunately, it doesn’t have to cost an arm and a leg.

Metrics for organisational improvement & growth

In fact, many lessons don’t even need more advanced technology than Microsoft Excel!

There is an old truth popularised by Peter Drucker: if you can’t measure it, you can’t improve it. You can be sure that Neobanks & startup Roboadvisors measure every aspect of their business, not least their marketing & sales efforts. After all, how do you know where the bottleneck for customer acquisition lies if you don’t how the different stages of the sales funnel perform?

The classic sales funnel looks something like below:

Some relevant metrics to track from this are:

  • Do you know how many people visit your website or see your advertisements? (Awareness)
  • Do you know how many people read your newsletter, or your market analysis published elsewhere? (Awareness)
  • Do you know how many people your Relationship Managers or other sales force reach out to? (Awareness)
  • How many inbound enquiries do you get on your website? (Interest)
  • How many prospects do your Relationship Managers meet? (Interest)
  • How many of those go beyond a first meeting? How often do prospects decide they need services like yours? (Decision)
  • How many of the prospects decide to become clients of your firm? (Action)
  • How many of the prospects that decide to become clients, actually go through with it all the way to account opening? (Action)

Measure everything. Track every step of your process. From phone calls made, meetings with clients, down to how many drop-out during client onboarding/KYC. If you know your numbers, you can start asking questions and seeing where you can do better. Do you need more marketing? Are your Relationship Managers not succeeding in converting leads to meetings? Are plenty of meetings happening, but rarely turning into relationships? Do people want to become clients, but drop out because the paperwork to open a relationship is too difficult?

Sales metrics are not all the metrics you should know

Do you know your Customer Acquisition Cost, including split of costs between sales effort and compliance costs? Do you have an idea of your Client Lifetime Value?

These numbers will also give you valuable insight into whether clients are staying long enough, and where you might be spending your money in acquiring and serving clients.

We cannot emphasise enough that knowing your statistics is the first step to making your business more effective. Your future tech-centric competitors will definitely have dashboards with these numbers in their offices, improving every aspect of their operations on a daily- and weekly basis based on data. Can you afford to not at least track some of them in an Excel spreadsheet?

As always, if you are interested in discussing this subject, we invite you to contact us.

Leveraging Compliance to grow Assets Under Management »
Posted by Wille Faler

Wille is a technology industry veteran of almost 20 years and has worked on a consultancy basis with organisations such as the Financial Times, BBC, UBS and Barclays Wealth Management.
He combines deep technical know-how with a thorough understanding of the regulatory landscape financial institutions face today.

Languages: fluent English, Swedish, Finnish & intermediate German.

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