Where will wealth take clients next?

Authors

EY Americas Wealth & Asset Management Consulting Leader

Wealth and Asset management industry leader. Passionate about innovative market solutions as well as helping underserved demographic groups get the financial advice they need.

Mark Wightman

EY Asia-Pacific Wealth and Asset Management Advisory Leader

Leveraging technology and cultural change to drive the future of wealth and asset management. Global traveller with an Asia Pacific focus. Thought leader. Educator. Father.

Alex Birkin

EY EMEIA Financial Services Consulting Leader and Managing Partner

Focused on creating the world’s leading transformation consultancy, trusted to help EY clients generate long-term value. Passionate about cars. Keen golfer. Husband and father of three.

Mike Lee

EY Global Wealth and Asset Management Leader

Spirited leader for wealth and asset management. Champion for change. Driven to produce better outcomes and simplify the complex. Passionate about family, friends and sports.

Contributors

Phil Hennessey

6 minute read 22 Apr. 2021

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Wealth managers must use deeper, richer insights to provide clients with more holistic, tailored, and meaningful experiences.

Wealth managers faced an unsettling combination of practical disruption and enforced reflection during 2020. As the dust raised by the COVID-19 pandemic begins to settle, 2021 promises to be the year when clients financially de-clutter their lives and refocus on their most important priorities.

Our newly released 2021 EY Global Wealth Research Report, which surveyed wealth management clients in 21 geographies, confirms that the pandemic has had a far-reaching effect on wealth clients’ beliefs and world views.

Going beyond the appreciation for digital channels, clients are becoming more risk-averse and increasingly focused on achieving personal goals aligned to their purpose, and enhancing their financial protection, diversification, and security.

As they contemplate their providers, clients value an altered range of tangible and intangible factors. Our research highlights a new opportunity for wealth firms to deliver long-term value across three key dimensions of the wealth experience:

The core services clients receive
Clients’ engagement with firms
Firms’ ability to implement purposeful legacies

1. Service

Firms have an opportunity to develop an ecosystem model that delivers a consolidated network of financial products and services, diversifies risk and enhances protection. While clients are expecting more for free, they are still willing to pay extra for a tailored and more holistic experience.

The appetite to diversify financial products, most notably through the greater use of alternative investments, is strong. Nearly half of investors want to consolidate their financial activities, across private banking, insurance, wealth and investments, in one place. More than 75% of that group have yet to choose a single provider, creating a huge potential opportunity for wealth providers.

How EY can help

Technology-enabled transformation

We help you effectively harness the power of technology to simplify, rationalize and centralize your firm’s operations, clearing the way to improve efficiency and extend product capabilities to attract new investments.

The opportunity for wealth providers

49%

of investors want to consolidate their financial activities in one place.

2. Engagement

Flexible interactions are more important than ever — increasingly, wealth providers will not be able to depend entirely on advisors or digital tools. Using high-quality, data-driven insights to curate digital experiences will allow firms to counter expectations that less human interaction might lead to less effective personalization. Firms should overtly demonstrate the links between the sharing of data and the identification of tailored services that can result in positive outcomes. Clients expect flexible platforms that evolve around their needs.

3. Purpose

Clients are now investing for purpose and looking beyond return on investment, making it more critical than ever for providers to understand their unique needs. Clients with sustainability goals are twice as likely to switch providers and are attracted to firms that share their beliefs. Only 36% of clients expect to rely solely on traditional investing by 2024. Clients increasingly view D&I as a sustainability goal, a key driver of provider choice, and as important in building strong advisor relationships.

Client investing needs are changing

36%

of investors only expect to rely solely on traditional investing by 2024, that has limited or no regard for sustainable practices.

Moving forward

Complementing a strategic focus on service and engagement with a clear emphasis on purpose holds the key to elevating client experiences and demonstrating the long-term value of wealth management.

The uncertainty and disruption of the past year have brought about profound changes in clients’ values. The good news for wealth providers is that clients are open to sharing more personal data, are interested in consolidating their relationships and are willing to pay more for holistic, individualized, and meaningful experiences. Set against that, clients’ growing demands for tailoring, diversification, protection, education, sustainability, and flexible interactions also pose significant challenges.

Download our 2021 Global Wealth Research Report

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Summary

The events of the past year have had tangible effects on wealthy clients’ behavior, expectations, and perceptions of value. In response, wealth managers need to integrate a deeper understanding of client beliefs into their services and interactions. This will build trust and create stronger, longer-lasting relationships based on a shared sense of purpose.

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