Key highlights

— Highlight 1

Equity markets drive North American leadership in wealth and HNWI growth

Unprecedented government stimulus packages, low-interest-rate environments, increased liquidity, stock market gains, and widespread COVID-19 vaccinations drove 2021 global economic resilience and accelerated High Net Worth Individual (HNWI) population and wealth growth.

The global HNWI population expanded by 7.8% (1.7 million new HNWIs), and wealth swelled by 8% (USD6.4 trillion) in 2021. North America retained its commanding lead for HNWI population growth (13.2%) and wealth (13.8%) in 2021. The robust tech sector fuelled powerful wealth performance.

— Highlight 2

Expectations for investment classes and client are evolving

COVID-19 had minimal impact on global HNWI asset class selection in 2021. Investors adopted a wait-and-watch approach and a positive mindset as growth allocation (equities and alternative investments) remained on par with January 2020 at ~43-44%. However, yet to be seen is whether market corrections and geopolitical crises will push HNWIs to restructure their portfolios over time.

“A customer-centric approach built using deep insights around customers’ earning, spending, and life goals is critical for wealth management and private banking firms to proactively meet customer needs.”

James Dunlop,
General Manager, Private Banking and Advice
ANZ Private

— Highlight 3

HNWIs’ call for sustainable investing products drives demand for quantifiable ESG impact measurement

Investing in causes with positive environmental, social, and governmental (ESG) impact is becoming critical for HNWIs. Regionally, HNWIs in Asia-Pacific (excl. Japan), Europe, and Latin America are the most interested in SI products, followed by North America.

As HNWIs become more interested in ESG investment options, WM firms realize they must expand product selection, build educational support, and develop capabilities to measure and communicate ESG impact.

— Highlight 4

Digital asset investments are becoming an essential part of HNWI portfolios

Our HNWI survey revealed that 71% of HNWIs globally have invested in digital assets, and 91% of HNWIs younger than 40 have investments in digital assets. Furthermore, they say cryptocurrencies are their favourite digital asset investment. Exchange-traded funds (ETFs) and metaverse investments are also sought-after digital assets.

As the adoption of digital assets (cryptocurrencies, ETFs, NFTS, metaverse-related products, and digital currencies) grows, WM firms will need capabilities around products and education. In addition, ecosystem partnerships will be necessary to create a diversified portfolio of digital offerings.

— Highlight 5

Personalization at each client touchpoint is essential to captivate emerging segments and earn confidence

New segments are emerging, such as women in wealth, millennials, and next-gen and tech-wealth HNWIs. Most WM firms lack segment-specific products and services, with only 37% providing offerings for women, 22% for millennials, and 53% for tech-wealth HNWIs. WM firms are out to earn and retain the mindshare (vs. their competition) of the emerging client segments. These unique segments, which are in focus now, possess high growth potential and require specialized expertise and offerings.

— Highlight 6

Customer engagement is a complex process requiring C-level commitment: The Chief Customer Officer

More and more firms are creating a new role or persona to direct client intimacy, the business, brand, and the ecosystem. This role orchestrates engagement, putting clients at the heart of the WM process. The Chief Customer Officer (CCO) is the best-suited client strategist and engagement orchestrator.

— Highlight 7

Firms need to build comprehensive engagement strategy

With the industry on the cusp of multidimensional disruption, WM firms need a comprehensive strategy to engage customers, enhance CX, drive client loyalty, and boost their likelihood to recommend. A four-dimensional strategy built around customer engagement will be essential for firms to capture client mindshare and measure the pulse of an expanding base of investors

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A challenging investment environment, rising costs to investors, uncertain global equity markets, diminishing interest rates, and unsteady real-estate prices make it harder for wealth management (WM) firms to generate superior investment performance for their clients. Heightening HNWI customer interest in new investment strategies, and broader needs for personalized service along with digital-first engagement and seamless experience are challenging the WM industry to meet new and higher expectations of customer experience.

With the industry on the cusp of multidimensional disruption, WM firms need a comprehensive strategy to engage customers, enhance customer experience, drive client loyalty, and boost their likelihood to recommend. What is the right next step to take?

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