The second worry for wealth management firms is the report’s assertion that wealth managers 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.
“The biggest gaps between HNWIs and more tenured wealth managers occurred in the areas of investment performance, managing wealth with a clear understanding of risk tolerance and understanding client concerns and needs.
“More tenured wealth managers seem to be underestimating how important these needs are to HNWIs,” the report said.
The growth in the number of younger high net worth individuals is just one of a myriad changes facing the wealth management sector. Increased regulation, changes to payment structures, increased use of technology at both the front and back end and the rise of automated advice all played a part in the significant changes already seen within the wealth management space.
But, as the report points out, the wealth manager value proposition is evolving across multiple areas and some of the changes have been taking place for years, “the difference now in in the convergence of areas and accelerated pace of change.
Portfolio Adviser has written in recent months about the importance of ensuring wealth managers keep pace with the growth in use of technology, as well as the rise of focus on goal-based solutions.
The rise in importance of younger HNWIs is another such issue, the importance of which cannot really be overstated for wealth managers focused on ensuring they continue to retain such clients in an ever more competitive world.
And, it looks like there remains work to be done if wealth managers are going to keep their customers satisfied.
