Yet in spite of this, a survey of a global sampling of such high net worth individuals (HNWIs) found more than 40% said they would “prefer to deal with a single firm able to meet a full range of financial needs”.
This compared with just 14.4% who expressed a preference for dealing with multiple firms.
Significant segments of the world’s HNWI population nevertheless “maintain relationships with multiple wealth firms”, according to the 2013 World Wealth Report – particularly those in the higher wealth bands, and in such emerging markets as the Middle East, Africa and Latin America.
This, the report adds, “is likely due to the reality that single firms, especially smaller local ones, are often not able to meet all of a HNWI’s varied needs".
The likely beneficiaries of the HNWIs’ preference for a single wealth manager will be those wealth management firms "with universal banking models able to offer a wide breadth of trusted expertise through a seamless process".
Capgemini, RBC Wealth
As reported, the World Wealth Report is compiled annually by Capgemini and, since last year, in association with RBC Wealth Management. It was released yesterday.
The 2013 edition is the first of the annual World Wealth reports to include the findings of recent research into global HNWI "perspectives and behaviour", from which these HNWI attitudes towards single vrs multiple wealth managers were taken.
The so-called Global HNW Insights Survey is included in the main report, and was compiled from the responses of more than 4,400 high net worth individuals, located in some 21 countries, according to Capgemini and RBC Wealth Management. They add that it aims to "explore HNWI confidence levels, asset allocation decisions, as well as their wealth management advice and service preferences”.
Other key findings of the Global HNW Insights chapter of the Wealth Report:
- Globally, HNWIs reveal a “pronounced” preference for wealth preservation, as opposed to prioritising growth, in their investments, but there are regional differences. HNWIs in some emerging markets, for example, show a greater appetite for growth investing than those in such markets as Japan and Europe
- The demand for “digital channels” of wealth management relationship maintenance and service delivery has already become “robust", particularly among HNWIs under the age of 40, and it is certain to increase. As the report notes, delivering a “quality digital experience” to one’s clients is now “a question of ‘when’ and not ‘if’” for wealth managers around the world
- More HNWIs perceive their wealth management needs to be “straightforward” – focused on investments, cash and credit – than “complex”, defined here as involving family, business ownership or philanthropy; though Asia-Pacific and Middle-East HNWIs buck this trend
- In line with the preference for working with a single firm, some 34% of HNWIs want a single "touch point" at their wealth management company "to facilitate all aspects of the relationship, compared to 23.5% who prefer to interact with multiple experts". This preference is particularly evident in the US, where more than half of HNWIs preer a single firm (52.8%) and a single touch point (50.9%)
- Global HNWI confidence in the wealth management industry has improved, with 61% expressing "a high degree of trust in both wealth managers and their firms in early 2013", up four and three percentage points respectively from last year."Increased trust and a cautiously upbeat economic outlook contributed to 75% of HNWIs feeling confident about generating future wealth"
- At the same time, the HNWIs interviewed expressed a "low level of confidence in markets and regulators, with fewer than half having a high level of trust in each (45% and 40%, respectively)"
Click here to read and download a copy of the full, 48-page report, which is available in Chinese, French, Portuguese and Spanish as well as English.The Global HNW Insights Survey section starts on page 14.
