One-size-fits-all wealth management does not "fit" in Asia-Pacific
Sept. 25, 2013
Almost half (45.4 percent) of the world's high net worth wealth growth has come from Asia-Pacific over the past five years (2007-2012), a trend that is expected to continue, according to the Asia-Pacific Wealth Report 2013 (APWR), released today by Capgemini and RBC Wealth Management. This distinction provides wealth management firms with opportunities for growth, but requires tailored and scalable offerings to meet the diverse needs of high net worth individuals (HNWIs) across the region.
"With consistent wealth growth across Asia-Pacific markets, the region is poised to have the largest high net worth population by as early as 2014,"
M. George Lewis
, Group Head, RBC Wealth Management & RBC Insurance.
"This growth provides both opportunities and challenges for firms, who will need to cater their offerings to meet the diverse needs of clients in the region to remain competitive in a rapidly-evolving and increasingly complex industry."
Key differences between Asia-Pacific HNWIs and HNWIs in other regions
Results from the inaugural Global HNW Insights Survey
incorporated into this year's APWR revealed that while
HNWIs share some traits with HNWIs in the rest of the world
, they also hold a number of unique characteristics pertaining to the management of their wealth.
The unique traits of
Preferences and behaviors differ by country
- Higher trust and confidence in firms and wealth managers. Over three-quarters have high levels of trust in wealth management firms (78.8 percent) and wealth managers (77.9 percent) compared to two-thirds (66.8 percent and 65.9 percent) of HNWIs in the rest of the world. Japanese HNWIs, by contrast, had low levels of trust, with only about 30 percent having confidence in various segments of the industry.
- More complex wealth management needs. They perceive their wealth management needs to be complex, encompassing business, family or philanthropy, with 41.1 percent holding this view, compared to 21.2 percent in the rest of the world. With regards to advice on family wealth, 42.3 percent of Asia-Pacific HNWIs have this need while 23.3 percent require personal wealth advice.
- Preference to work with multiple experts at one firm. They prefer to work with multiple experts (40.1 percent) at one firm, in contrast with those in other regions who prefer one point of contact (40.4 percent versus 21.7 percent who prefer multiple experts).
- Preference for digital versus direct contact. Nearly 40 (38.2) percent rated digital as more important than direct wealth manager contact compared to 21.5 percent of HNWIs in the rest of the world.
- Willingness to pay for customized services. Asia-Pacific HNWIs say they are willing to pay more for services that go beyond standard wealth offerings (42.3 percent compared to 25.5 percent in the rest of the world).
While there were different perspectives and behaviors expressed by Asia-Pacific HNWIs compared to those in the rest of the world, the region cannot be viewed as uniform, with varying views held by HNWIs across individual Asian markets as well. These differences are most clear when comparing HNWIs in
with those in
While HNWIs in
expressed no strong preferences in terms of their wealth management servicing needs, HNWIs in
expressed clear opinions, with both countries having the highest proportion of HNWIs who view their needs as complex and desire input from a number of experts.
"Firms that try to develop a 'one-size-fits-all' servicing model to address the general needs of Asia-Pacific HNWIs will fall short,"
said Jean Lassignardie, Chief Sales and Marketing Officer, Capgemini Global Financial Services.
"The firms with the ability to combine deep local HNWI knowledge with a tailored and scalable value proposition, upgraded business models and seamless client experiences will be best positioned to capture growth."
What do wealth management firms need to be successful?
To best position themselves in the Asia-Pacific HNWI market, the report highlights several specific areas for firms to focus on ranging from ensuring an understanding of individual country HNWI preferences, investing in digital communications, and building capabilities in specific wealth management services to meet the needs of business owners such as estate and succession planning.