The majority of wealth managers are keeping their richest clients happy.

More than 60% of high-net-worth clients expressed a high degree of trust in both their wealth managers and their firms, according the World Wealth Report 2013.

And that could be good news for U.S. wealth managers for another reason: 52.6% of high-net-worth clients prefer to work with a single firm to “manage all of their financial needs,” according to the report, a snapshot of global wealth issued Tuesday by Capgemini and RBC Wealth Management.

“Clients want a seamless experience,” said John Taft, chief executive of RBC Wealth Management in the U.S., at a press briefing in New York. “I think firms are beginning to be aware of what kind of prize exists if we can crack that code.”

Clear client communications that outline value proposition, cost of services and the firm’s high fiduciary standards are the “best strategic investment” wealth management firms can make in the years ahead, added Jean Lassignardie, chief sales and marketing officer, Capgemini Global Financial Services.


The report found a number of other opportunities for firms to improve their client services -- including improved technology in such areas as reporting and risk management, as well as redesigned processes for onboarding and wealth manager training.

In particular, the report found firms must cope with the high volume and cost of regulatory change -- labeling it the “single largest challenge” facing wealth management firms in the years ahead. The rapid pace of change is transforming the industry, the report found, sparking consolidation and transforming service models.

“It’s going to be increasingly challenging for firms to offer all services to all clients in all markets,” Lassignardie said.

Personnel, documentation, infrastructure and opportunity costs are all expected to rise as a result of regulation, while non-compliance could bring fines, a ban on business activities, additional legal costs and harm to a firm’s reputation resulting in lower brand value, client and employee attrition and a negative impact on the stock price.

“Helping wealth managers to understand how to effectively discuss and navigate the regulatory changes with clients is an opportunity to differentiate,” the report said.


Despite a 12% increase in wealth, the report found the richest individuals in the U.S. and around the world continued to focus on capital preservation over growth.

In the U.S., 32.6% of individuals with more than $1 million in investable assets said they were focused on wealth preservation. Among U.S. portfolios, more than 20% of assets were allocated to cash or deposits (compared with 30% worldwide), and 19% were allocated to fixed income investments.

These “historically high” levels of cash may be a result of lingering fear from the financial crisis, continued market volatility and a mistrust of financial institutions, Taft said.

Ultrahigh-net-worth individuals and families with more than $30 million in investable assets are being especially cautious, Taft added, because most of their wealth is generated from operating businesses -- which they perceive to be running in a risky business environment.

More broadly, North America reclaimed its position as the world’s largest wealth market after falling out of the top spot the previous year. North America had 3.7 million individuals with more than $1 million in investable assets -- slightly more than the 3.6 million in the Asia-Pacific region. Total wealth in the U.S. and Canada reached $12.7 trillion, compared to $12 trillion in Asia-Pacific.

 Read More:


Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access