Toronto, Paris – The evolving needs and expectations of high net worth individuals (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%).