Wealth Management
Press
The changing expectations of
By
Forbes Singapore
High Net Worth Individuals
As the next generation of high-net-worth individuals around the world prepare to take the reins of their family businesses, wealth advisors are transforming their offerings to meet the changing needs of this dynamic group of clients.
Compared to their predecessors, today’s affluent have different expectations, preferences and priorities when it comes to managing their wealth.
For instance, sustainability and impact investing have become a key priority for this group. According to Capgemini’s World Wealth Report 2020, around 27% of HNWIs — defined as those who have $1 million or more of investible assets — said they were interested in sustainable products. This was even higher for ultra-high net worth individuals (UHNWIs), those with over $30 million in investible assets, with the figure rising to 40%.
Significantly, these investors are turning their interest in sustainability into concrete action. Some 41% of those surveyed plan to allocate 46% of their portfolio to businesses actively pursuing environmental, social and corporate governance (ESG) policies by the end of 2021.
Another key trend impacting the wealth management sector is the massive intergenerational transfer of wealth that is expected to take place in Asia in the coming years. Wealth-X’s Family Wealth Transfer Report estimates that US$1.9 trillion of wealth in Asia will be passed on to the next generation over the next decade.
However, many of Asia’s rich families are not prepared for the transition, with more than half of the region’s wealthy not actively planning for succession, according to a report by Butterfield.
These trends will require wealth advisors to adapt to the shifting landscape, and adjust their offerings to meet the changing needs of their clients.
A challenging landscape
Furthermore, a volatile investment environment is making it more difficult for investment professionals to generate superior returns for their clients. This is compounded by the fact that increasing industry regulation is putting an additional burden on wealth advisors.
For instance, the Monetary Authority of Singapore (MAS) recently introduced regulations related to individual accountability and conduct among financial institutions that will come into force in 2021. The MAS has also rolled out new rules related to cyber-security, privacy and technology risk management.
Demand for customized solutions
The pandemic has accelerated many of the changes impacting wealth management, as clients turn to digital solutions and more personalized products to navigate an increasingly complex investing environment.
To meet this challenge, wealth managers and advisors are leveraging advanced data analytics and other digital tools to find new ways to engage with clients, manage risks and develop customized solutions.
With banking regulations around the world getting more complicated, wealth management specialist Zircon Investment has adopted a global approach that seeks to match clients with the most suitable banking or insurance partner to reach their goals. The firm offers tailored solutions to its private clients in areas such as wealth management, succession planning, and real estate.
Zircon Investment also helps investors realize their financial ambitions by giving them access to unique investment opportunities. For instance, one of its current investments is in AdTech start-up K-PUB, which has developed a solution that radically changes the marketing experience for users.
Creating value for clients
As many affluent clients face cross-border and multi-jurisdictional issues related to their investments and other aspects of wealth planning, they often require multi-faceted solutions from firms such as Zircon Investment.
For example, one of the firm’s clients is a French national based in Switzerland, with a portfolio of assets spanning Asia, Africa and Europe. The global nature of the portfolio makes it difficult for the client to not only monitor his investments, but also to deal with all the related compliance, administration and taxations issues.
In such cases, Zircon Investment develops solutions for its clients that aim to simplify the management of their portfolios. To do so, it creates comprehensive structures in the most suitable jurisdictions for clients to enjoy an optimized tax outcome, while centralizing their wealth planning into as few jurisdictions as possible.
In a fast-changing and increasingly global wealth management landscape, it is the ability to navigate complexity to help HNWIs achieve their financial goals that will determine success in today’s uncertain world.