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Anuj Agarwal
28 Feb 2023

Over the last few years, a growing middle class has led to a steep growth in the number of mass affluent customers across the world.

This segment of wealth customers, described as those having investable assets in the range of US $100,000 to $1 million, accounted for about 11% of the overall global population in 2020, a healthy proportion of which are digitally engaged young professionals. They account for about 40% of global wealth, and are expected to replace the middle class as growth drivers in the coming decade. As per a report from Global Data Wealth Markets Analytics, the US mass affluent wealth band alone is expected to account for upwards of $US 47 trillion of wealth by 2025.

However, despite their significant scale and the immense potential of the mass affluent segment, it has thus far not been a top priority segment for Wealth Management (WM) firms. Capgemini’s 2022 WM executive survey found that only 27% of WM firms currently serve mass affluent clients, and only 36% firms are exploring mass affluent services.

The Role of FinTechs in Mass Affluent Banking

In recent years, several different FinTechs have seized this opportunity, and have started to offer cost-effective solutions to help clients reach their investment goals. While traditional banks see the promise of this segment, they’re not sure how to approach it. This segment is financially and digitally savvy, is fee-sensitive, and likes to shop around for various options, not hesitating to spread their assets across providers. Hence, a generic cookie-cutter approach to target such clients is unlikely to create much stickiness in the relationship with this segment. However, The investable wealth levels of this segment do not justify the traditional personal one-to-one wealth advisor approach.

Strategies for Wealth Management Firms in the Affluent Banking Segment

Given this conundrum, WM firms must consider three steps to attract and retain clients from this segment:

Leverage actionable data for insights

Develop a client-centric strategy to create cost-effective yet bespoke offerings with an optimal balance of digital and personal interactions. 

Invest in advanced tech solutions

Given the rapid rise of FinTechs, hybrid robo-services, and the high client expectation for digital, tailored solutions, WM firms will need to leverage the latest in tech innovation to differentiate and compete. Investments need to be made in digital channels, AI, and machine learning to know the customer and serve her better. At the same time, a high degree of process automation would be needed to remain cost-effective and nimble. Lastly, 

Invest in an agile operating model

Having a modular architecture centered on an aggregation layer leveraging capabilities from legacy systems, as well as partner components and third parties, will allow WM firms to better leverage their ecosystem. It will also enable them to be better prepared for an expanding product universe consisting of not just traditional asset classes, but also newer ones such as alternatives, private markets, various digital assets (such as cryptos and NFTs), and ESG investments.

While several firms are attempting to build these capabilities in-house, many others are acquiring these capabilities. Morgan Stanley acquired Solium Capital Inc. to enhance its workplace wealth solutions in 2019. JP Morgan Chase announced the acquisition of Nutmeg in 2021 to boost its digital wealth management capabilities.

The Future of Mass Affluent Banking

As the size of this segment and the investable wealth it possesses increases over the next few years, competition between banks and WM firms serving this segment will continue to heat up. Banks will need to differentiate themselves on the client relevancy of their offerings (advising what is best for the client rather than pushing specific products), pricing, and the ability to adapt their offerings based on the lifecycle stage of their clients. Additionally, the ability to detect retail banking clients who may soon join the ‘mass affluent’ club, and to start engaging with them early, will position banks to start working with mass affluent clients from the inception of their first portfolios onward. As the wealth of these new prospects grows, so too will the potential business for the banks that have earned their trust.


Anuj Agarwal

Director, Global Banking Industry
I bring value to our clients by helping them understand the rapidly changing financial services landscape, and advise on emerging trends, technologies, and markets. I leverage my domain and industry knowledge to support them in developing strategies that can address their business objectives.