New Data on the Wealthiest Clients: What Advisors Need to Know
June 22, 2015 7:49 AM
New Data on the Wealthiest Clients: What Advisors Need to Know
Opportunities for advisors and firms focused on serving high-net-worth and ultra-high-net-worth clients are expanding.
As wealthy clients get richer, they are looking not only for help managing their wealth, but for assistance with a broad range of needs, from preparing their heirs to steward the family fortune to strategies around impact investing.
Recent surveys from Boston Consulting Group, U.S. Trust, and Capgemini Financial Services with RBC Wealth Management highlight key trends among wealthy and ultrawealthy individuals. --Andrew Welsch
Click through to learn about the most important trends or view as a single page here.
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As wealthy clients get richer, they are looking not only for help managing their wealth, but for assistance with a broad range of needs, from preparing their heirs to steward the family fortune to strategies around impact investing.
Recent surveys from Boston Consulting Group, U.S. Trust, and Capgemini Financial Services with RBC Wealth Management highlight key trends among wealthy and ultrawealthy individuals. --Andrew Welsch
Click through to learn about the most important trends or view as a single page here.
Graphs created with Datavisu.al
New Data on the Wealthiest Clients: What Advisors Need to Know
Wealthy and ultrawealthy clients are expected to accumulate significant assets over the next five years. But among this elite group, households with between $1 million and $20 million are likely to make the biggest gains.
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New Data on the Wealthiest Clients: What Advisors Need to Know
Overall, U.S. households will see a surge in wealth accumulation — but wealth managers can't rest on their laurels, experts say.
"Markets going up can still mask a weak engine for capturing net new assets," says Bruce Holley, a senior partner at Boston Consulting Group, which does an annual study of global wealth.
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"Markets going up can still mask a weak engine for capturing net new assets," says Bruce Holley, a senior partner at Boston Consulting Group, which does an annual study of global wealth.
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New Data on the Wealthiest Clients: What Advisors Need to Know
Households with more than $1 million hold more than half of the wealth, but that doesn't necessarily mean it's easier for advisors who cater to wealthy clients.
Business models have converged, Holley says, making it more difficult for firms to stand out in a crowded marketplace.
"It is increasingly more difficult [for clients] to differentiate between a trust, a bank and a brokerage firm," he says.
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Business models have converged, Holley says, making it more difficult for firms to stand out in a crowded marketplace.
"It is increasingly more difficult [for clients] to differentiate between a trust, a bank and a brokerage firm," he says.
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New Data on the Wealthiest Clients: What Advisors Need to Know
While advisors are inclined to focus on tactical topics with their clients — such as tax planning or asset allocation — wealthy clients want more, says Chris Heilmann, chief fiduciary officer at U.S. Trust, the brokerage unit of BofA serving HNW and UHNW clients.
"They want to delve deeper into important personal and family matters, such as philanthropy, values-based and eldercare planning and teaching their children financial skills. ... There is a huge opportunity and necessity for advisors to broaden the conversation and better communicate with their clients to help them truly achieve their goals," Heilmann says.
U.S. Trust's recent study surveyed 640 wealthy investors with at least $3 million in investable assets, not including the value of their primary home.
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"They want to delve deeper into important personal and family matters, such as philanthropy, values-based and eldercare planning and teaching their children financial skills. ... There is a huge opportunity and necessity for advisors to broaden the conversation and better communicate with their clients to help them truly achieve their goals," Heilmann says.
U.S. Trust's recent study surveyed 640 wealthy investors with at least $3 million in investable assets, not including the value of their primary home.
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New Data on the Wealthiest Clients: What Advisors Need to Know
Overall, rich clients' risk tolerance is diminishing. Only 36% said they were willing to seek higher returns if it meant higher risk, down from 42% last year, according to U.S. Trust's survey.
"Part of this may be that the bull market is aging, and that may be weighing on some investors' minds," says Keith Banks, president of U.S. Trust.
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"Part of this may be that the bull market is aging, and that may be weighing on some investors' minds," says Keith Banks, president of U.S. Trust.
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New Data on the Wealthiest Clients: What Advisors Need to Know
"There's a huge opportunity for wealth managers to provide advice and services around social impact," says William Sullivan, global head of market intelligence for Capgemini Financial Services, which co-authored a report on global wealth along with RBC Wealth Management.
"Over 90% of high-net-worth individuals say it's important to spend time driving social impact. But we found there's a gap between the support they're getting and what they'd like to get, especially among younger clients."
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"Over 90% of high-net-worth individuals say it's important to spend time driving social impact. But we found there's a gap between the support they're getting and what they'd like to get, especially among younger clients."
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New Data on the Wealthiest Clients: What Advisors Need to Know
Only 25% of HNW and UHNW clients strongly agree that their children are prepared to inherit the family fortune, according to the U.S. Trust survey.
U.S. Trust's Heilmann says that this concern has showed up in previous studies, which led U.S. Trust to create a financial literacy program for clients' adult and teenage children, to help better prepare them for their inheritance.
"This is something that we at U.S. Trust took very seriously," he says.
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U.S. Trust's Heilmann says that this concern has showed up in previous studies, which led U.S. Trust to create a financial literacy program for clients' adult and teenage children, to help better prepare them for their inheritance.
"This is something that we at U.S. Trust took very seriously," he says.
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New Data on the Wealthiest Clients: What Advisors Need to Know
A shockingly low percentage of wealthy millennials say they work with an advisor, presenting perhaps one of the biggest opportunities for advisors to pick up new clients and more assets.
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