1. Solve the Private Markets puzzle
45% of UHNW (Ultra High Net Worth) wealth is already invested in Private Markets and this share is expected to grow to 50% of their investable assets in the next 5 years. Wealth Managers who are ill prepared to systematically capture this wallet have largely lost to the banking sector so far. They need to identify reliable origination partners who can help source private market assets and stand up a dedicated business to serve this client demand.
2. Change gears for success in onshore China
China is the largest Asian onshore wealth management market and will represent close to 50% of total APAC wealth in 5 years. Few international players have already defined their market participation model. Global Wealth Managers need to find an answer to the China question now as local players are developing fast and options for strong local partners are disappearing rapidly.
3. Taking the client journey to the next level
Wealth Managers still largely define client journeys based on their own offering strengths and standard total wealth-based segmentation. They need to radically focus on solving real client pain points, based on detailed client persona understanding, if they want to have a chance to stand out among their peers.
4. The internal client takes center stage
Many Wealth Managers still largely neglect treating their RMs as important internal clients. They need to build out dedicated RM journeys to get the most out of their most expensive resource. Banks that do this well are rewarded with lower attrition and greater productivity.
5. Taking a surgical approach to digital initiatives
Most Wealth Managers have dedicated digital teams with a whole host of digital initiatives in play. Wealth Managers should take stock and carefully prioritize their digital portfolios based on greatest expected impact, rather than developing features with no direct client benefit and ultimately no commercial impact.
6. Tackle the high cost challenge of serving wealthy clients
To this day, Wealth Management is a high touch and very costly to deliver business, as evidenced in still very high cost income ratios across the industry, often in the 70s and 80s. Wealth Managers should double-down on their short-term cost agenda, but balance this with re-investing part of the savings into longer-term truly transformative initiatives. Where the often larger-scale and longer time horizon transformation opportunities are pursued, a clear set of KPIs needs to be defined to track implementation success throughout the journey.
7. Be bold! ‘Beyond banking’ business models take hold
Most Wealth Managers still apply a traditional definition to the business they are in and how they operate. Wealth Managers should be a lot bolder in exploring options to create new ‘beyond banking’ business models as an opportunity to be rewarded by investors with a growth multiple.
8. Position yourself for the digital assets opportunity
Wealth Managers are still in the early stages of understanding the potential digital assets (including tokenization of real assets) could hold for their business. Given the rising importance of the asset class to their clients and the technology-led potential to significantly expand the asset base wealth managers will operate in, they need to come up with an answer on how to incorporate digital assets into their offering.
9. Look beyond investment advice – escape the commoditization trap
Industry wide margins on investment advice continue to be depressed. With many heavyweights in the industry moving towards a greater focus on UHNW clients, they need to be careful to escape the commoditization trap by pushing UHNW services downstream, and growing the total wealth offering, wealth planning, and services/solutions beyond banking.
10. Conquer the affluent opportunity!
Wealth Managers have, in recent years, mostly raised entry barriers to access Wealth Management services. As the upper end of the client spectrum is getting even more competitive, Wealth Managers have a short window of opportunity to beat the pack and start building a dedicated affluent and/or lower HNWI proposition beyond pure standardization.