Crisis Tests Client Confidence and Long-Standing Business Models for Wealth Management...

Crisis Tests Client Confidence and Long-Standing Business Models for Wealth
Management Firms Finds the 2009 World Wealth Report

Increased Transparency and Improved Risk Management Will Enable Wealth
Management Firms to Effectively Restore Customer Trust and Confidence

NEW YORK, June 24 /PRNewswire/ -- The global economic and market downturn has
shaken the trust and confidence that high net worth individuals (HNWIs) placed
in markets, regulators, financial institutions, and the very principles of
portfolio management, according to the 2009 World Wealth Report issued today
by Merrill Lynch Global Wealth Management and Capgemini, a global consulting
services firm. Market losses and diminished confidence, forced many HNWIs to
shift their wealth towards safer investments across multiple institutions as a
means of reducing risk.

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"Our research shows that while client satisfaction remains a top priority,
many wealth management firms and advisors may not fully understand what drives
clients to leave or stay," says Bertrand Lavayssiere, Managing Director Global
Financial Services, Capgemini. "In addition, firms may be misjudging how
satisfied their own advisors are with certain service and support areas.
Wealth management firms should reevaluate current capabilities to ensure
simplicity and transparency, demonstrate value as defined by clients and
prospects, and develop new products and services to retain and attract clients
in today's environment."

To stem client attrition and strengthen retention, advisors and wealth
management firms will need to pursue more open and transparent client
communications, provide enhanced information on risk factors, and increase
levels of client service. The report shows more than 25 percent of HNWIs
withdrawing assets or leaving their wealth management firm altogether in 2008,
demonstrating the heightened need for wealth management firms to reassure
clients, and focus on increased transparency and simplicity to mitigate any
gaps in understanding between clients, advisors and firms.

The World Wealth Report is based on statistically significant samples obtained
through surveys of more than 1,350 advisors, more than 200 high net worth
clients and more than 60 senior executives at wealth management firms.
Findings show that service quality, online capabilities, and risk management,
particularly in the areas of reporting and transparency, are key to driving
increased client retention going forward.

Perception Gap Exists between Advisors and HNWIs in Retention Areas
Advisors generally understand the top drivers of client retention--a full 88
percent of surveyed HNWIs and 87 percent of surveyed advisors say service
quality was "very important" and a key driver of retention.

However, advisors surveyed underestimated the importance of some highly
influential retention drivers for clients. This perception gap leaves room for
improvement in the following areas:
-- Online access and capabilities were deemed "very important" by
66 percent of clients, but only 32 percent of advisors -- a 34
percentage point gap;
-- Statement and reporting quality had a 24 percentage point gap;
-- Risk management and due diligence capabilities had a 19 percentage
point
gap;
-- Fee structures showed an 18 percentage point gap.

More Holistic Risk Assessments can Reassure Clients
Of HNWIs surveyed, 73 percent said risk management and due diligence
capabilities were an important factor in their decision to stay with their
firm in 2008, while only 54 percent of advisors said it was a reason clients
did and would stay. By developing more robust and transparent risk management
capabilities, wealth management firms can make substantial progress in
restoring client confidence.

More holistic client risk assessments can help clients and advisors make more
astute decisions about investment allocations. This could involve drawing on
elements of behavioral finance, scenario analysis, and deeper diversification
principles to help clients understand, for example, the actual dollar impact
of a confluence of events like loss of income and unexpected market losses.

Enabling Advisors is also Key to Delivering on Business Goals
From the surveyed advisors who voiced dissatisfaction with the service and
support enablement provided by their firms, fully 90 percent lost clients in
2008. It is clearly in the best interests of firms to make sure advisors are
satisfied with the core service components of advisor enablement.

Advisors were most dissatisfied in 2008 with their firms' communications and
directives during the financial crisis, as well as with client online and
statement reporting capabilities. The priority advisors gave to these support
areas is not surprising, given the clamor for transparent, accurate and timely
information during the year's unprecedented events.

"The events of the last year have fundamentally changed the way clients think
about investing. Many have to re-examine their strategies and portfolios and
reset their expectations to account for a slower growth environment," said Dan
Sontag, president of Merrill Lynch Global Wealth Management. "Those firms who
truly understand what their clients have been through, and can invest in the
resources and tools to help them move forward, will have the greatest
opportunities to succeed in the future."

About Merrill Lynch Global Wealth Management
Merrill Lynch Global Wealth Management (GWM) is a leading provider of
comprehensive wealth management and investment services for individuals and
businesses globally. With approximately 16,000 financial advisors and more
than $1.1 trillion in client assets, it is among the largest businesses of its
kind in the world. More than two-thirds of GWM assets are with clients who
have a net worth of $1 million or more. Within GWM, the Private Banking &
Investment Group provides tailored solutions to ultra high net worth clients,
offering both the intimacy of a boutique and the resources of a premier global
financial services company. These clients are served by more than 160 Private
Wealth Advisor teams, along with experts in areas such as investment
management, concentrated stock management and intergenerational wealth
transfer strategies. Merrill Lynch Global Wealth Management is part of Bank of
America Corporation.

About Capgemini
Capgemini, one of the world's foremost providers of consulting, technology and
outsourcing services, enables its clients to transform and perform through
technologies. Capgemini provides its clients with insights and capabilities
that boost their freedom to achieve superior results through a unique way of
working - the Collaborative Business Experience - and through a global
delivery model called Rightshore(R), which aims to offer the right resources
in the right location at competitive cost. Present in more than 30 countries,
Capgemini reported 2008 global revenues of EUR 8.7 billion and employs over
90,000 people worldwide. More information is available at www.capgemini.com.

Capgemini's Financial Services Global Business Unit (FS GBU) brings deep
industry experience, enhanced service offerings and next generation global
delivery to serve the financial services industry. With a network of 12,000
professionals serving over 900 clients worldwide, the FS GBU collaborates with
leading companies in banking, insurance, and capital markets to create
tangible value. For more information please visit
www.capgemini.com/financialservices.

SOURCE Merrill Lynch Global Wealth Management

Jenny Grendel (North America), Weber Shandwick,
CapgeminiWWR@webershandwick.com, +1-212-445-8187, or Emma Hedges (EMEA), Weber
Shandwick, capgeminiemeapr@webershandwick.com, +44 (0) 207 067 0512, both for
Capgemini; Selena Morris (North America), selena_morris@ml.com,
+1-212-449-7283, or Sara-Louise Boyes (EMEA), saralouise_boyes@ml.com, +44 20
7996 3557, both of Merrill Lynch