Wealth managers and firms need to evolve to meet the complex needs of
their clients or risk losing business
TORONTO AND PARIS, June 17, 2015 /CNW/ - The evolving needs and
expectations of High Net Worth Individuals1 (HNWIs), particularly those under the age of 45, are driving wealth
management firms to adapt, or risk lower client satisfaction levels,
finds the World Wealth Report 2015 (WWR), released today by Capgemini and RBC Wealth Management. The report reveals that wealth managers are overestimating the degree
to which they understand the wealth needs of younger HNWIs, with a 15
percentage point gap between how well younger HNWIs believe their needs
are understood by their wealth managers and the perceptions of wealth
managers themselves. The report also finds that pressure from ongoing
industry issues, such as regulation, rising costs, and new entrants to
the market, is significantly changing the traditional wealth manager
1 High Net Worth Individuals (HNWIs) are defined as those having
investable assets of US$1 million or more, excluding primary residence,
collectibles, consumables, and consumer durables
Opportunity for wealth managers to better understand needs of younger
Globally, 73 percent of HNWIs are satisfied with their wealth managers.
HNWIs in North America recorded the highest overall satisfaction rates
(82 percent) while HNWIs in Japan recorded the lowest (56 percent).
While wealth managers are delivering satisfactory service to most
HNWIs, the report reveals that they misjudge the degree to which
younger HNWIs feel their needs are understood, with 76 percent of
wealth managers saying they understand the needs of younger HNWIs,
while only 61 percent of younger HNWIs agree.
Globally, HNWIs are most concerned about their health and that of their
family (68.7%), whether their assets will last throughout their
lifetime (66.2%), the rising cost of health care (63.8%), and the
ability to afford the lifestyle they want in retirement (62.8%).
A greater percentage of younger HNWIs express high levels of concern
about all aspects of their financial lives (59%) than older HNWIs
(51%). That contrasts with less than half of wealth managers (48%) who
express concern over the key financial aspects of their clients' lives.
This disconnect is leading to further challenges for wealth managers and
their firms as younger HNWIs also expressed a greater need for support
and professional advice from wealth managers (54 percent vs. 49 percent
for older HNWIs), lower satisfaction levels (70 percent vs. 73
percent), and a higher propensity to leave their firm and/or wealth
managers in the event their wealth needs are not fulfilled (83 percent
vs. 79 percent).
Industry challenges and new entrants create pressure to transform
Industry challenges such as regulation and cost pressures, combined with
the increasing commoditization of some basic core services, are driving
wealth managers to differentiate themselves from new non-traditional
players, such as automated advisory service providers2. There is strong interest for automated advisory services in emerging
markets such as Asia-Pacific, excl. Japan, (76 percent) and Latin
America (70 percent), while North American HNWIs registered the lowest
interest at 34 percent. Younger HNWIs are also nearly twice as inclined
to use automated advisory services as older HNWIs (67 percent vs. 38
percent). However, wealth managers are underestimating HNWI interest in
these services, with only 20 percent of wealth managers believing their
clients are interested in them, compared to 49 percent of HNWIs who
would consider using them.
"A number of emerging factors are impacting the wealth manager role and
now is the time to address these converging and accelerating market
dynamics," said Andrew Lees, Global Sales Officer, Capgemini Global Financial
Services. "These latest World Wealth Report findings reinforce the need for
wealth managers to continually adapt to meet evolving client
expectations. To fortify the ongoing trust, satisfaction, and loyalty
of younger HNWIs, firms need to reassess traditional ways of nurturing
and growing these relationships and combat increased commoditization by
looking for new ways to differentiate."
2 Automated advisory services refer to online-only firms (or divisions of
traditional wealth firms) that offer automated portfolio management
services (i.e. client inputs result in automated portfolio management
recommendations). However, they are not typically equipped to offer
more holistic and detailed wealth planning and solutions.
Wealth managers and firms must shift their focus
Along with traditional investment advice that many HNWIs continue to
value, the wealth manager's role is expanding to include a broader
range of advice and support, leveraging the full value of their firms,
to help clients achieve their life goals.
"The most successful firms will be the ones that reimagine the value
they bring to their clients to be more competitive," said George Lewis, Group Head, RBC Wealth Management & RBC Insurance. "As firms navigate the changing market dynamics, it's important that
they keep an open dialogue with wealth managers, while developing the
tools, guidance and resources to support their success. We recognize
that this is critical for continuing to identify opportunities to
enhance the client-wealth manager relationship and respond to the
evolving needs of our clients."
As their role evolves, long-term success for wealth managers will depend
on their ability to understand and address client needs, empower
clients through education and dialogue, and embrace a wider spectrum of
financial planning and wealth management advice and solutions.
Technology will play a critical role by enabling wealth managers to
respond to specific client demands with tailored financial planning and
services to compete with emerging disruptive players more effectively.
According to the report, wealth management firms also need to change
significantly, or risk falling behind. Investment is needed by firms in
deep and broad resources so that their wealth managers can offer truly
integrated wealth planning. The most successful firms will be those
that empower wealth managers, invest in training and education, and
support full financial planning based on the comprehensive needs of
The World Wealth Report from Capgemini and RBC Wealth Management is the industry-leading benchmark for tracking high net worth
individuals (HNWIs), their wealth, and the global and economic
conditions that drive change in the Wealth Management industry. This
year's 19th annual edition includes findings from the most in-depth
primary research works available on global HNWI perspectives and
behavior. Based on responses from over 5,100 High Net Worth Individuals
across 23 countries, the Global HNW Insights Survey explores HNWI
confidence levels, asset allocation decisions, perspectives on driving
social impact, as well as their wealth management advice and service
preferences. The inaugural 2015 Capgemini Wealth Manager Survey also
queried more than 800 wealth managers across 15 major wealth markets to
assess the evolving role of wealth managers.
For more information, explore the interactive report website at www.worldwealthreport.com.
With more than 145,000 people in over 40 countries, Capgemini is one of
the world's foremost providers of consulting, technology and
outsourcing services. The Group reported 2014 global revenues of EUR
10.573 billion. Together with its clients, Capgemini creates and
delivers business and technology solutions that fit their needs and
drive the results they want. A deeply multicultural organization,
Capgemini has developed its own way of working, the Collaborative Business ExperienceTM, and draws on Rightshore®, its worldwide delivery model.
Capgemini's Global Financial Services Business Unit brings deep industry
experience, innovative service offerings and next generation global
delivery to serve the financial services industry. With a network of
24,000 professionals serving over 900 clients worldwide Capgemini
collaborates with leading banks, insurers and capital market companies
to deliver business and IT solutions and thought leadership which
create tangible value.
Learn more about us at www.capgemini.com and www.capgemini.com/financialservices.
Connect with our wealth management experts in the Financial Services
section of Capgemini Expert Connect at http://www.capgemini.com/experts/financial-services.
The World Wealth Report 2015 and other Capgemini thought leadership is
available for your iPad through Capgemini's Financial Services Insights
app. Download it through iTunes here.
About RBC Wealth Management
RBC Wealth Management is one of the world's top five largest wealth managers*. RBC Wealth
Management directly serves affluent, high-net-worth and ultra-high net
worth clients globally with a full suite of banking, investment, trust
and other wealth management solutions, from our key operational hubs in
Canada, the United States, the British Isles, and Asia. The business
also provides asset management products and services directly and
through RBC and third party distributors to institutional and
individual clients, through its RBC Global Asset Management business
(which includes BlueBay Asset Management). RBC Wealth Management has
more than C$747 billion of assets under administration, more than C$481
billion of assets under management and approximately 4,100 financial
consultants, advisors, private bankers, and trust officers. For more
information, please visit www.rbcwealthmanagement.com
*Scorpio Partnership Global Private Banking KPI Benchmark 2014. In the
United States, securities are offered through RBC Wealth Management, a
division of RBC Capital Markets, LLC, a wholly owned subsidiary of
Royal Bank of Canada. Member NYSE/FINRA/SIPC.
Royal Bank of Canada is Canada's largest bank, and one of the largest
banks in the world, based on market capitalization. We are one of North
America's leading diversified financial services companies, and provide
personal and commercial banking, wealth management, insurance, investor
services and capital markets products and services on a global basis.
We employ approximately 78,000 full- and part-time employees who serve
more than 16 million personal, business, public sector and
institutional clients through offices in Canada, the U.S. and 39 other
countries. For more information, please visit rbc.com.
RBC supports a broad range of community initiatives through donations,
sponsorships and employee volunteer activities. In 2014, we contributed
more than $111 million to causes worldwide, including donations and
community investments of more than $76 million and $35 million in
Image with caption: "WWR 2015 Infographic from Capgemini and RBC Wealth Management: The evolving role of the wealth manager. (CNW Group/Capgemini)". Image available at: http://photos.newswire.ca/images/download/20150617_C9623_PHOTO_EN_43530.jpg
For further information:
Drea Garrison (North America)
Weber Shandwick for Capgemini
+1 952 346 6152
Cortney Lusignan (EMEA)
Weber Shandwick for Capgemini
+44 (0) 20 7067 0764
RBC Wealth Management Contacts:
Tony Maraschiello (North America)
+1 416 974 9334
Fiona McLean (EMEA)
+44 (0) 20 7653 4516