What The Wealthy Think Of Your Firm

Regardless of where you work, or what kind of practice you have, the last nine or 10 months have probably been tough on you and your clients. Of course, some firms have fared better than others, so what better time than now to hear what clients think of your brand?

Regardless of where you work, or what kind of practice you have, the last nine or 10 months have probably been tough on you and your clients. Of course, some firms have fared better than others, so what better time than now to hear what clients think of your brand?

In mid-April, the Luxury Institute, a New York-based research organization that tracks the opinions of the wealthiest 1 percent of U.S. consumers, asked respondents to rate wealth-management businesses (commercial banks, regional banks and private banks). The survey included a total of 551 respondents over the age of 30, each with a net worth of at least $5 million and an annual income of $200,000.

Given the sub-prime-related markdowns in particular, and the torrent of bad economic news in general, you would think that respondents would view financial companies negatively. And they did: Satisfaction levels across the board were in fact lower this year than last year. But there was a surprise: Not all of the companies generating the worst news received significantly lower marks from high-net-worth respondents.

“Last year, Bessemer Trust, received a 7.33 overall LBSI score,” says Milton Pedraza, CEO of the Luxury Institute (LBSI stands for Luxury Brand Status Index). “This year, the top score was 6.45, which suggests the industry’s image has definitely taken a big hit,” he says. Bessemer isn’t even on this year’s list, an absence Pedraza suspects is due to the fact that other national firms have figured prominently in the news and were thus more familiar to wealthy consumers in the past several months. (To visit the Luxury Institute’s website, click here.)

Firms were each given an LBSI ranking, a number primarily based on the scores respondents gave to the firms in the following categories on a scale of one to 10: 1.) Quality—this firm delivers consistently superior quality services. 2.) Exclusivity—this firm is truly unique and exclusive. 3) Social Status—this firm is used by people who are admired and respected. 4) Self-Enhancement—this firm can make the customer feel special across the full customer experience.

The Institute also ranked firms according to respondents’ answers to several other questions, including whether the brand was deserving of a price premium, whether one would recommend that brand to another person, and if they’d be inclined to go to that brand again for future services.

The top five wealth managers (out of 17) in the Luxury Institute’s “private bank” category, ranked by LBSI score, were:

1.) Northern Trust (LBSI, 6.22)

2.) Goldman Sachs and JP Morgan private bank (LBSI, 6.08)

3.) U.S. Trust/Bank of America private wealth management (LBSI, 5.87)

4.) UBS Wealth Management (LBSI, 5.86)

5.) Deutsche Bank Alex. Brown (LBSI, 5.79)

Some surprising (and not so surprising) facts from the survey findings: UBS Wealth Management fared very well in the survey—despite having written-down roughly $20 billion at the time of the survey. Since then, UBS has taken $124 billion in sub-prime hedge fund losses, and has written down a total of about $37 billion in securities tied to the troubled U.S. home mortgage market. UBS replaced its CEO and Chairman, and was forced to raise nearly $30 billion in new capital. Yet, those who would recommend UBS to friends and family say it has “an international presence, experience, security and secrecy,” according to the survey. (What a difference between perception and reality, no?)

Bear Stearns was on the opposite end of the respect spectrum from JP Morgan Chase, its new parent; Bear posted the lowest LBSI score of the bunch. Interestingly, those most familiar with Goldman Sachs, and those who rated the firm most favorably, were women under the age of 55 with household incomes of $200,000 to $499,000, and $5 million to $9.9 million in net worth. When asked about this, Pedraza says that in the Institute’s past surveys, women have had more favorable opinions generally of brands, and have been more forgiving of missteps in their scoring than men.

Pedraza’s Institute plans to launch a service for wealthy consumers soon, called luxuryratings.com, in which consumers will be able to evaluate all of their service providers online, and those evaluations will be available for other members of the site to read.

The survey of the commercial bank pool included six firms. The top three firms in this category were:

1.) JP Morgan Private Client Services (LBSI, 6.45)

2.) Wachovia Wealth Management (LBSI, 6.17)

3.) Deutsche Bank Private Wealth Management (LBSI, 6.11)

Among the regional banks, the top three wealth-management brands were:

1.) BB&T wealth management (LBSI, 5.99)

2.) PNC Advisors (LBSI, 5.83)

3.) La Salle Bank Wealth Management Group (LBSI, 5.67)

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