Why advisors are failing to connect with key customer groups


The challenges of the global pandemic and changing economic and societal priorities have turned the world upside down: this is as true in the field of wealth management as anywhere else: clients seek more and distinguish themselves from their service providers, and they expect change to happen now. When it comes to meeting the needs of High Net Worth Individual Investors (HNWIs), new client segments are emerging, yet many wealth management firms are not connecting with the next wave of clients.

According to Capgemini’s World Wealth Report 2022, most companies lack personalized and segment-specific products and services: for example, only 37% offer offers aimed at women, 22% at millennials and 53% at HNWI tech -wealth. Let’s take a closer look at what our research tells us that high-potential emerging segments want from their preferred wealth management providers.

Women want companies to earn their trust and meet their unique needs
Women of all wealth brackets will inherit 70% of global wealth over the next two generations and will likely manage two-thirds of household wealth by 2030. However, our survey found that many women are less confident in their ability to manage and grow wealth over the next 12 months. Wealth management firms should consider offering training and investment tools for female HNWI clients to engage and build confidence to build trust and deepen relationships.

When selecting a senior wealth manager, women look for quality service, fee and product transparency, and privacy and data security. Today, female investors are also looking for purpose as well as returns. Rather than focusing exclusively on money, their goals include connection, meaning, a legacy for the next generation, and making an environmental and social difference.

Millennials are looking for digital engagement, learning, value and transparency
Millennials are tech-savvy digital natives who prefer self-managed investments with minimal guidance from wealth managers; this segment enjoys working with robo-advisors and new-age technology companies. Over the next few decades, the largest intergenerational transfer of wealth – over $30 trillion – will pass from baby boomers to Gen X and Gen Y, so it’s no surprise that 58% of interviewees say they already work closely with the children and beneficiaries of existing clients.

Millennials also prefer a mix of in-person and virtual interactions for counseling services and information seeking, but prefer more self-directed transactional and educational touchpoints. More than half (53%) of millennials said they had changed their primary wealth management company in the past year; they switched companies because of high fees (46%), lack of transparency (39%) and slow service (33%).

Tech-Wealth HNWIs seek active investments, customization and consolidated services
The number of tech-rich billionaires grew by 51.5% in 2021 compared to 2020 levels. Tech-savvy HNWIs demand active investment, personalization and consolidated services from their financial services providers, and 60% prefer family offices to large banks or wealth management companies.

73% of tech-wealth HNWIs switched primary companies after crossing the $1 million threshold. Lack of an attractive product portfolio and low digital maturity were the main reasons for switching companies. Tech-wealth HNWIs use an average of five companies to manage their wealth. They support startups and want to share their expertise and experience by investing in technological innovation.

LGBTQ+ HNWI clients seek inclusive services that allow them to live their best financial lives
As with other segments, there are opportunities for wealth management firms to better serve the needs of LGBTQ+ individuals and families who often face financial and legal complexities during pivotal events (marriage, domestic partnership, family expansion, buying a house, retirement). An inclusive approach encompasses the entire financial life of LGBTQ+ FIs, from investments and tax strategies, to estate planning, charitable and wealth planning, and risk management. Our survey of wealth managers found that 30% of advisors say they don’t understand the needs of LGBTQ+ clients. Meanwhile, 30% of LGBTQ+ participants in our HNWI survey said they lacked trust in their primary wealth management company.

Of course, it is essential to understand the unique needs of each client: inclusive and assertive human interaction and a nuanced judgment between the two will enable service equal to that offered to other valued HNWIs.

Now is the time to act on the priorities and demands of new customer segments
Although the unique priorities of each segment require special attention, one thing that all of these new investor segments have in common is a keen interest in new investment opportunities. 91% of HNWIs under 40 have invested in digital assets, and 55% of HNWIs say investing in causes with a positive ESG impact is a key wealth management goal. As clients become more interested in ESG investment options, wealth managers will need to expand product selection, implement educational support, and develop capabilities to measure and communicate direction and ESG results.

Perhaps even more important is their strong desire for individualized and ongoing engagement: personalized journeys throughout financial and personal life. To meet and even exceed these new and complex expectations and capture growth, wealth managers will need new business models and improved ways to deliver more personalized and responsive service, improving the overall client experience.

Nilesh Vaidya is Executive Vice President of Capgemin.


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