Persistent industry challenges and needs of younger HNWIs are changing the role of wealth managers, finds World Wealth Report 2015

| Press release
Wealth managers and firms need to evolve to meet the complex needs of their clients or risk losing business.
Toronto, Paris – The evolving needs and expectations of high net worth individuals[1] (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 role.

Opportunity for wealth managers to better understand needs of younger HNWIs

Globally, 73% of HNWIs are satisfied with their wealth managers. HNWIs in North America recorded the highest overall satisfaction rates (82%) while HNWIs in Japan recorded the lowest (56%).  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% of wealth managers saying they understand the needs of younger HNWIs, while only 61% 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% vs. 49% for older HNWIs), lower satisfaction levels (70% vs. 73%), and a higher propensity to leave their firm and/or wealth managers in the event their wealth needs are not fulfilled (83% vs. 79%).

Industry challenges and new entrants create pressure to transform

Industry challenges such as regulation and cost pressures, combined with the increasing commoditisation of some basic core services, are driving wealth managers to differentiate themselves from new non-traditional players, such as automated advisory service providers[2]. There is strong interest for automated advisory services in emerging markets such as Asia-Pacific, excl. Japan, (76%) and Latin America (70%), while North American HNWIs registered the lowest interest at 34%. Younger HNWIs are also nearly twice as inclined to use automated advisory services as older HNWIs (67% vs. 38%). However, wealth managers are underestimating HNWI interest in these services, with only 20% of wealth managers believing their clients are interested in them, compared to 49% 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 commoditisation by looking for new ways to differentiate."

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 recognise 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 their clients.

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 behaviour. 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

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