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New Opportunities to Woo Richest Clients

Helping wealthy clients, especially younger ones, make a social impact and providing them with credit, holistic advice and digital access to services represent major opportunities for wealth managers, according to the 2015 World Wealth Report.

“There’s a huge opportunity for wealth managers to provide advice and services around social impact,” says William Sullivan, global head of market intelligence for Capgemini Financial Services, which co-authored the report along with RBC Wealth Management. “Over 90 percent of high-net worth individuals say it’s important to spend time driving social impact. But we found there’s a gap between the support they’re getting and what they’d like to get, especially among younger clients.”

The World Wealth Report surveyed individuals with $1 million or more in investable assets as well as the wealth managers they work with.


According to the survey, wealth managers are the best positioned among all professionals serving high-net worth individuals (HNWIs) to provide advice about investing in organizations dedicated to making a social impact.

But to keep up with the growing demand for guidance in this area, the report says wealth mangers need to develop “more sophisticated in-house capabilities” beginning with “embedding social impact discussions into the overall wealth management approach.”

For example, wealth mangers can help clients determine which type of organization to invest in—such as a social enterprise versus a non-profit or corporation. They can also help clients decide if they should structure their investment as venture capital, equity, a loan or a gift.

Once the investment is made, wealth mangers can provide regular performance updates as well as measurements that gauge the degree of social change attributable to the investment


Offering credit to wealthy clients is also a critical according to the report.

Nearly one-fifth of HNWIs use credit, and up to 60% consider it a key criterion for choosing a wealth management firm. Cash is also important to wealthy clients who keep large amounts on hand to fund their lifestyles and ensure financial security, the report notes.

Wealth managers need to maintain a complete picture of their client’s finances, the report recommends, and offer a customized solution for their cash and credit needs.

While wealthy clients are generally satisfied with their wealth managers, those under 45 have a “wide range” of needs and expectations that are not being met, the World Wealth Report found.


Younger wealthy clients, according to the report, exhibit consistently higher levels of concern about all aspects of their financial lives – particularly health care, education and long-term planning --and have a greater affinity for professional advice than older high-net worth clients.

What’s more, these younger clients are likely to have relationships with five or more financial institutions, which they view primarily as a relationship with the firm--as opposed to an individual wealth manager. When selecting a wealth advisor, these clients also place great value on word-of-mouth referrals.

To differentiate themselves, wealth mangers must “reassess” the traditional way in which they have managed their client relationships, the report states.


“Wealth managers need to understand that in a dynamically evolving industry demands are shifting to holistic wealth management, including deep planning and advice capabilities,” Capgemini’s Sullivan says.

Part of that evolution, the report notes, is the threat of posed to traditional models by “non-traditional players” such as robo advisors, open investment communities and third-party capability plug-ins.

In response, Sullivan says that wealth managers should consider a hybrid model that compliments human advice with sophisticated technology. “The value proposition is still through personal relationships,” he explains, “but clients must have digital access to the complete expertise of the firm and its third-party affiliates.”

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