New studies show that the wealth management business is scoring highly for consistent growth, rebuilding trust as well as for dealing professionally with clients’ acquisitions. The Boston Consulting Group’s 2013 Global Wealth report however, warns managers not to expect a repetition of the strong growth which was supported by 2012’s bull market run. As a result, “wealth managers will largely be playing a ‘share stealing’ game for existing wealth,” it says.
Bruce Holley, a senior partner and managing director at Boston Consulting Group and one of the authors of the report, explained that slowing growth and a declining share of global wealth market means US financial advisors can’t depend on an expanding wealth base and must instead focus on “share capture”.
Quality advice is the best hook to attract new clients, according to Holley, and a rule which should be embedded into a firm’s process.
The report also shows that more than 60% of high net worth clients highly trust their wealth managers and their firms and 52.6% of HNW clients prefer a single firm to manage all of their financial needs.
All of the studies claimed that optimal relationships with clients are crucial. PwC’s 2013 Global Private Banking & Wealth Management Survey suggests that focus on client satisfaction may be changing the way wealth managers get paid and how they are evaluated.
Almost three-quarters of CEOs interviewed by PwC also emphasised the importance to invest in talent management. New skills such as proficiency with new technologies and an ability to serve cross-border clients on tax issues are expected from the new generation of wealth managers.
The RBC and Capgemini World Wealth Report says that the high volume and cost of regulatory change will be the “single largest challenge” facing firms in the coming years. The report claims that personnel, documentation, infrastructure and opportunity costs are all expected to rise as a result of regulation.
The studies also found that wealth management firms will also continue to encounter the fact that clients are still cautious.. According to The World Wealth Report, the richest individuals in the U.S. and around the world will continue to focus on capital preservation over growth — an attitude that puts more pressure on wealth managers to grow assets by adding new clients rather than building on an existing asset base.
According to The Boston Consulting Group, wealth in the United States reached $39 trillion last year, making it the largest wealth market in the world and the U.S. has nearly 6 million households with $1 million or more in investable assets, far more than any other country.
But by 2017, the report estimates, the U.S. and Canada will be surpassed as leader in world wealth by the Asia-Pacific region, led by China.
Source: www.financial-planning.com
