analysis: world wealth report
IBS Journal July – August 2015
World Wealth Report 2015: new generation, new challenges
Capgemini and RBC Wealth Management have recently carried out their periodic look at what is going on in the wealth management sector. Their World Wealth Report 2015 suggests a reasonable level of satisfaction among high net-worth individuals (HNWIs) at present but with a new generation bringing different demands, including a strong preference for digital services.
‘HNWIs are generally satisfied overall but there is a bit of a time bomb building,’ says Capgemini’s strategic analysis group head, David Wilson. The overall satisfaction rating for advice from wealth managers is put at 72.5 per cent and there are few regional inconsistencies, although the Japanese are notably least satisfied, at 56.5 per cent. This isn’t bad, given the other complexities facing today’s wealth managers. ‘There is regulatory pressure, cost pressure, client behaviours are shifting, and there are new entrants, many of whom are digitally focused,’ says Wilson. Probably the most worrying aspect
of the satisfaction figures is that they are appreciably lower among newer custom- ers than among the long-standing. There is additional news for the established provid- ers that might cause disquiet: ‘Wealth man- agers who have been in the business fewer than 20 years appear much more attuned to HNWI needs, both on advice-related and platform-related needs. Wealth managers with longer tenures (20 years or more) were less aligned.’ To say that many wealth managers
have been slower to embrace change than their counterparts in other sectors is per- haps a bit of an understatement. From the traditional asset allocation-type services, Wilson feels the need is increasingly for ‘a holistic, goals-based approach proba- bly with a strong digital offering’. The goals increasingly include social impact, with
30 © IBS Intelligence 2015
www.ibsintelligence.com
many HNWIs not viewing wealth managers as the main source of advice here. The regulatory bombardment over the
last few years has perhaps been a distraction or excuse for delaying other decisions and investments, but it is clear that this now con- stitutes ‘business as usual’. This is a burden. The report authors comment: ‘Regulatory reform in the wake of the financial crisis has imposed significant new costs and impedi- ments to the goal of providing an integrated client experience. By necessity, wealth man- agers are spending more time on activities that maintain compliance, but many times do little to add value to client relationships.’ However, the new entrants are not standing still and are putting pressure on the incumbents to adapt as well. In this sense, what is happening in the wealth management space mirrors what is going on in other areas of financial services. There are some different types of
entrants and disruptors identified in the report. There are the ‘auto advisors’, primar- ily with a US focus at present. Examples are Wealthfront and, in Europe, Nutmeg. These are currently mainly centred on simple products and are aimed at investors with a few thousand dollars, not millions, but they might well evolve to cover more complex products, higher net-worth customers and wider geographies. Among these auto advisors there might
well be consolidation and it is unclear which ones will be the winners, says Wilson.
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44
