The global market for wealth management is evolving.
According to Ernst & Young, socioeconomic shifts and changing client demands are opening up new opportunities for leading wealth and private banks (WPBs) to redefine the client experience across the entire spectrum of wealth management services. Seamlessly blending people and digital technology will be key to delivering wholly personalized advice that enhances the lives of clients.
In this new environment, private wealth firms and commercial banks that are able to anticipate and adapt to change will be best positioned to succeed.
The Evolving Global Market for Wealth Management
There are a number of factors driving changes in the global market for wealth management.
Among the most important are socioeconomic shifts, such as the rise of women in the workforce and the growth of the middle class in emerging markets, and changing client demands, such as for alternative investments, tax planning, and financial education.
According to McKinsey, “today, women control a third of total US household financial assets—more than $10 trillion.” These shifts are creating new opportunities for WPBs to redefine client experiences across the wealth spectrum.
Blending People and Technology to Deliver Personalized Advice
In order to take advantage of these opportunities, WPBs will need to seamlessly blend people and digital technology to deliver wholly personalized advice. This will require a deep understanding of clients’ needs, goals, and preferences, as well as an ability to use data analytics to provide insights that can help clients make informed decisions about their financial futures.
By taking a personalized approach to wealth management, WPBs will be able to enhance the lives of their clients in a way that is not possible with traditional approaches.
Understanding the “Mass Affluent”
The global market for wealth management is undergoing a seismic shift.
In the past, private banks managed the finances of the ultra-wealthy – those with investable assets of $20 million or more. Today, there is an increasing number of millionaires and billionaires as well as a growing class of “Mass Affluent” – those with investable assets of $1 million to $20 million. At the same time, there is a rise in entrepreneurship and self-employment, which has created a new class of “solopreneurs” – those who are independently wealthy but do not have the same level of resources as the ultra-wealthy.
Delivering a More Holistic Experience
These shifts have led to changes in how private wealth is managed. For example, traditional private banks are now facing competition from a new breed of firms that are focused on delivering more holistic wealth management services, including investment management, financial planning, tax planning and estate planning. In addition, there is an increasing demand for alternative investments such as hedge funds, private equity and real estate. And finally, there is a growing need for financial education – helping clients understand not only what they should do with their money, but also why they should do it.
The global market for wealth management is undergoing a transformation.
Socioeconomic shifts and changing client demands are creating new opportunities for leading wealth and private banks (WPBs) to redefine client experiences across the entire spectrum of wealth management services. Seamlessly blending people and digital technology will be key to delivering wholly personalized advice that enhances the lives of clients. In this new environment, organizations poised for change will be best positioned to succeed.
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