National rolls out red carpet for top clients

As banks become more sophisticated in their approach to database mining, they are increasingly segregating their wealthiest clients for special attention. John Wilkinson asked the National Australia Bank how they were approaching these high net worth individuals.

The country's top wealth holders have always used banks, but the relationship has been purely functional and no different to that of the average customer.

In the past few years, National Australia Bank has been segregating its client base into different groups and tailoring its services to suit them.

A few years ago, business customers were put into business banking branches with their own manager. Now it is the turn of the top 15 to 20 per cent of NAB's private customers.

"We are looking towards what we term premium customers based on their incomes," says NAB general manager global premium financial services Peter Flavel.

This group earns in excess of $75,000 a year. Previously they were treated no differently to a customer with $1000 in the bank.

The new service for this premium group aims to build relationships with them.

"We are giving this group a dedicated personal banker through a number of financial service centres the bank is creating," Flavel says.

There will be 35 financial service centres spread around Australia. These will bear no resemblance to the traditional banking halls - in fact, there are no withdrawal facilities. Flavel says they have been designed as a meeting place between customer and banker.

Financial planners will also be based there to provide the customers with a complete financial needs analysis.

"Since we opened the first service centres we are seeing the first successes in the concept. The customers come to appreciate having a personal banker," Flavel says.

"A lot of these people are time-poor and want a one-to-one relationship that is mobile and can come to them. It is about applying specialist resources to these customers."

Flavel says the art of achieving success with this group of customers is to encourage them to think about wealth management.

"If you are just trying to cross-sell to these people, you have missed the point," he says.

"It is about getting them to understand their financial goals and to discuss their hopes to achieve these aims."

Flavel says both the banking and financial planning staff have had to learn about each other's skills to provide a complete analysis.

"The challenge to the financial planner is thinking about more than just meeting a customer's superannuation. They have to bring in banking needs as well," he says.

"This concept is making use of the internal distribution capacity of various parts of the bank's operations to meet the customers' financial goals."

To achieve this more rounded approach to financial planning, education plays an important role for not only staff, but customers as well.

"Our customers don't regard themselves as over-wealthy, but they have the desire and capacity to create wealth in the long-term. That is what we are teaching them to do," Flavel says.

The analysis process consists of more than looking at the persons' lifestyle. If they come into the centre for a mortgage, it is about helping them work out cash flows throughout the period of the loan, how much money will be needed for things like children's education during that period and creating a solution using a variety of NAB products.

"It is much more about building that relationship with the adviser. The challenge for us is to see that we help the customer in wealth creation in addition to day-to-day living costs," Flavel says.

Flavel believes NAB will eventually produce financial planners and bankers who will work exclusively in this premium sector. In time, special premium products will also be developed.

"We will have to manufacture everything to meet the customers' needs because we cannot just sell them off-the-shelf products," he says.

NAB is not developing this service just for its customers' welfare. Flavel admits it will become a very profitable part of the bank's business in the future, but he argues it is a win-win situation for both parties.

The customer gets a more tailored approach to their financial services needs, while the NAB earns more fees from its richest customers.

"The customers will come to rely on the organisation for advice and help compared to other financial services operations. This has to be a win for NAB," Flavel says.

"We are about building lifetime relationships with this group of customers and not letting them walk off to a competitor because we can't offer them something."

The financial service centres are being rolled out in Australia and the plan is to take them globally.

NAB has three banks in the UK - Clydesdale, Northern and Yorkshire banks, the National Irish Bank in Europe, Michigan National in the US and nearer to home the Bank of New Zealand and National Bank Asia.

Flavel says all of these operations will develop premium financial services operations, although the regulations in each country mean there will be slightly modifications.

"It is still early days in the concept, but we see no fundamental reasons why premium financial services cannot be rolled out globally," Flavel says.

"The challenge will be to make the service available on a global basis as it is a fundamental shift for the various organisations around the world."