After seeing profits plummet and regulation increase, wealth managers must provide greater transparency and better processes if they are to win back the trust of clients, according to advisory firm PricewaterhouseCoopers (PwC).
PwC's global private banking and wealth management survey 2009 revealed that more than 53 per cent of high net worth clients said their primary source of financial advice was their own research capabilities and independent knowledge.
According to PwC, this indicated that clients were sceptical of the advice that they have been getting.
"All the turmoil has damaged client trust and wealth managers need to work hard to win this back," PwC banking analyst Hugh Harley said.
The report advised wealth managers to focus on building a more transparent relationship with clients and strengthening the quality of advice.
"Transparency is the new gold standard of wealth management," PwC EMEA private banking and wealth management leader Jeremy Jensen said.
"How clients are kept informed around not just performance of their assets but also the integrity, financial health and processing status from their wealth managers and underlying service providers and counterparties will be brand differentiating.
"Some specific actions to rebuild trust are making sure that advisers are spending more time with clients. We're also seeing a re-think of how advisers are being remunerated and are moving away from commissions to a fee-for-service approach."
The report also said wealth managers need to invest in advanced technology to survive.
"Wealth managers need to think about end to end process improvements," Harley said.
Eighty two per cent of survey respondents plan to undertake some form of major core system upgrade.
PwC surveyed 240 private banks and wealth managers worldwide to discuss the changes affecting the sector.
