Supporting Investment Advisors : A Knowledge Management Framework for Client and Prospect Intelligence

Financial organizations and wealth management firms today deal with a wide variety of clients with different capacity to invest. As per the Securities and Exchange Board of India (SEBI) guidelines released in 2013, services offered by the wealth management division are categorized as Advisory Services and Execution Services which are independent. A client may avail only advisory services or only execution services or both from the same wealth management firm. An advisory client's preferences for various asset classes remain almost constant over a short span of time as their Capacity to Risk (CTR) and the Attitude to Risk (ATR) remain almost same over a short span. So, the expected revenue from the existing advisory clients remain almost constant over a few years. The only revenue source for the wealth management division of the firm is the advisory fee from the advisory client and the execution fee which it charges from clients who avail the execution facilities. In order to survive in this rapidly changing business scenario, advisors need to tap the information about prospective customers from the existing clients. A prospect can be a family member, or a friend of a remote business associate of the existing client. This paper proposes a knowledge management framework to capture the tacit knowledge about a prospect, who can be a future customer of the wealth management firm's other services/products, from the existing client during an interaction which an advisor has with the client. This knowledge captured is stored in a suitable information framework to create and extract value for the organization