wealth management webinar
TRANSCRIPT
1 LinkedIn Webinar_v1.0_WFS.pptx
2 LinkedIn Webinar_v2.0pptx
Global HNWI population grew 6.7% - 2nd lowest in 5 years
HNWI Population by Region (mn), 2009–2014
Source: Capgemini Financial Services Analysis, 2015
% Change 2013–2014
(2.1%) 7.7%
8.5% 3.02 3.31 3.37 3.68 4.32 4.69
3.12 3.39 3.35 3.73 4.33
4.68 2.95
3.13 3.17 3.41
3.83 3.99
0.40 0.44 0.45
0.49
0.57 0.61
0.45 0.48 0.50
0.52
0.54 0.53
0.11 0.12 0.12
0.14
0.14 0.15
0
4
8
12
16
2009 2010 2011 2012 2013 2014
# H
NW
Is (M
illion
s)
Total 10.0 Europe
North America
Asia-Pacific
Latin America Middle East
Africa
8.3%
4.0%
5.2%
Total 10.9 Total 11.0 Total 12.0
Total 13.7 Total 14.6 Global 6.7%
Europe lagged global HNWI growth.
3 LinkedIn Webinar_v2.0pptx
Despite slower growth rates, Europe is still home to 10 of the Top 25 countries by HNWI population
HNWI Population by Country (k) , 2013–2014
Source: Capgemini Financial Services Analysis, 2015
4,00
6
2,32
7
1,13
0
758
527
472
330
320
219
203
156
173
176
161
151
172
160
125
124
120
130
112
108
109
105
4,35
1
2,45
2
1,14
1
890
550
494
343
331
226
219
198
190
189
178
161
161
155
141
138
127
125
125
114
111
107
0
900
1,800
2,700
3,600
4,500
5,400
Uni
ted
Stat
es
Japa
n
Ger
man
y
Chi
na
Uni
ted
King
dom
Fran
ce
Switz
erla
nd
Can
ada
Aust
ralia
Italy
Indi
a
Net
herla
nds
Sout
h Ko
rea
Spai
n
Saud
i Ara
bia
Braz
il
Rus
sia
Kuw
ait
Hon
g Ko
ng
Nor
way
Mex
ico
Taiw
an
Aust
ria
Arge
ntin
a
Sing
apor
e
Num
ber o
f HN
WIs
(k)
2013 2014
9% Annual Growth (%) 2013–2014
5% 4% 4% 4% 8% 26% 10% 7% 10% 7% (6%) (3%) 12% 11% 6% (4%) 12% 6% 2% 2%
Rank in 2013
1 6 7 8 9 10 16 12 11 14 17 13 15 20 21 18 22 24 23 25 19
5% 1% 17% 4%
2 3 4 5
4 LinkedIn Webinar_v2.0pptx
Constrained by economic uncertainties, HNWI population and wealth of European markets witnessed below average growth
Note: Size of the bubble represents HNWI wealth in 2014 Source: Capgemini Financial Services Analysis, 2016
Norway was an outlier in Europe with significant growth, while UK, Netherlands, Switzerland, Russia witnessed average growth.
HNWI Population and Wealth CAGRs for Top 25 Markets, 2008–2014
Fastest-growing cluster
Moderate-growth cluster
Below-average growth cluster
Brazil
Italy
Mexico
France
Germany Argentina
Spain
U.S.
Saudi Arabia U.K.
Netherlands
Canada Russia Australia South Korea
Japan Switzerland
Austria
0%
16%
4%
8%
12%
20%
0% 5% 10% 15% 20%
HNWI Wealth 2008-14 CAGR
HN
WI P
opul
atio
n 20
08–1
4 C
AGR
Glo
bal A
vera
ge
(9.5
%)
Global Average
(9.3%)
= US$1Trillion
Sample bubble
China
India
Kuwait
Taiwan
Norway
Hong Kong
Singapore
25.5% Wealth 24.4% Pop
5 LinkedIn Webinar_v2.0pptx
Varied HNWI Preferences on Their Wealth Management Relationship
6 LinkedIn Webinar_v2.0pptx
HNWIs across the globe are currently fairly satisfied with their wealth managers
HNWI Satisfaction with Wealth Manager
Source: Capgemini and RBC Wealth Management Global HNW Insights Survey, 2015
7 LinkedIn Webinar_v2.0pptx
However younger HNWIs display low trust and satisfaction and a varied approach to wealth management
Lower Trust and Satisfaction
Different Approach to Relationships
A Preference for Referrals and
Advice
73.4%
70.0% Younger
Older
… Lower Satisfaction with their Wealth Manager
… Lower Trust and Confidence in Wealth Manager
… Lower Trust and Confidence in Firms
58.3%
54.3% Younger
Older 58.1%
53.5% Younger
Older
… Relationships with Five or More Firms
… Lower Percentage of Assets Managed by Primary Wealth Manager
14.7%
43.2% Younger
Older 58.6%
51.1% Younger
Older
39.7%
58.4% Younger
Older
… Higher Rate of Introduction to Wealth Manager Through Referrals
… A Preference for Seeking Professional Advice
… An Orientation to the Firm as the Primary Relationship
49.5%
53.6% Younger
Older
73.6%
80.1% Younger
Older
Younger HNWIs Have… … As Demonstrated By…
8 LinkedIn Webinar_v2.0pptx
As a consequence, wealth managers less aligned with younger HNWIs
Source: Capgemini and RBC Wealth Management Global HNW Insights Survey, 2015
HNWI and Wealth Manager Perspective on Understanding of HNWI Wealth Needs by the Wealth Manager
9 LinkedIn Webinar_v2.0pptx
Increasing Demand for Digital Leading to Disruption in Wealth Management Industry
10 LinkedIn Webinar_v2.0pptx
Five fundamental forces are driving the customer demand for digital across industries
“Amazon-ification”
“Google-ification”
Google has driven the information age through an individual’s ability to find a wide variety of information quickly, easily, and for free
“Apple-ification”
Apple established the customer experience at being at the center of a firm’s strategy
One of the first firms to articulate and deliver a contextual and sales-focused digital value proposition
Drove widespread adoption of digital social interaction More relevant to describe this as “
Contextual and sales-focused”
Customers Dealing with Digital in their Everyday Lives
Source: Capgemini Financial Services Analysis, 2016
Information Age
Customer Experience
Sales-focused Digital Value Proposition
Digital Social Interaction
“Facebook-ification”
Through process simplification and improvement, Uber transformed the meaning of customer experience and convenience
Process Simplification and Convenience
“Uber-ification”
11 LinkedIn Webinar_v2.0pptx
As expected, wealth management customers also have a high demand for digital, led by younger HNWIs
HNWIs Considering Entire or Most of Current WM Relationship to be Digital Currently and Five Years in Future, by Age, Q1 2014
Note: Questions asked, “To what extent would you say that your wealth management relationship is CURRENTLY conducted through digital channels?”, “In FIVE YEARS, to what extent would you like your wealth management relationship to be conducted through digital channels?”, and “Thinking about your wider retail experience, to what extent do you CURRENTLY buy personal items, such as clothes or books, through digital channels?”
Source: Capgemini Financial Services Analysis, 2016; Capgemini and RBC Wealth Management World Wealth Report 2015
57%
77%
59%
48% 40%
64%
83%
70%
54% 48%
0%
25%
50%
75%
100%
Global Under 40 Age 40-49 Age 50-59 Age 60+
Future Current
12 LinkedIn Webinar_v2.0pptx
The largest age gaps are on emerging digital channels of mobile, social media, and video
Under 40
40+
HNWI Channel Importance for Different Wealth Management Capability Areas
Note: Weighted average of respondents indicating importance level to difference capabilities per channel Source: Capgemini Analysis, 2014; Global HNW Insights Survey 2014, Capgemini, RBC Wealth Management, Scorpio Partnership
In-Person/ Phone
Internet E-mail Mobile Social Media
Video In-Person/ Phone
Internet E-mail Mobile Social Media
Video
In-Person/ Phone
Internet E-mail Mobile Social Media
Video
INFORM ENGAGE
TRANSACT
13 LinkedIn Webinar_v2.0pptx
Younger HNWIs and those from emerging markets more likely to leave if firms don’t deliver integrated experience
63%
70%
68%
65%
0% 20% 40% 60% 80%
$20m+
$10m–$20m
$5m–$10m
$1m–$5m
56%
63%
63%
76%
83%
87%
65%
0% 20% 40% 60% 80% 100%
North America
Europe
Japan
Middle East and Africa
Asia-Pacific (excl. Japan)
Latin America
Global
49%
60%
68%
80%
0% 20% 40% 60% 80% 100%
Age 60+
Age 50–59
Age 40–49
Under 40
HNWI Propensity to Leave Wealth Management Firm Due to Lack of Integrated Channel Experience (% of Respondents)
Source: Capgemini, RBC Wealth Management, and Scorpio Partnership Global HNW Insights Survey 2014
14 LinkedIn Webinar_v2.0pptx
As a result, HNWIs also showcase a lot of demand in the automated advisory area
However, wealth managers seem to be underestimating the demand.
Note: Questions asked: “Would you ever consider having a portion of your wealth managed by an automated advisory service”? “In your view, would your HNW clients consider having a portion of their wealth managed by automated advisors”?
Source: Capgemini Financial Services Analysis, 2016; Capgemini and RBC Wealth Management, World Wealth Report 2015
49%
76%
46% 52%
70%
33%
20% 19% 16%
32%
14% 18%
0%
20%
40%
60%
80%
Glo
bal
Asi
a-P
acifi
c(e
xcl.
Japa
n)
Eur
ope
Japa
n
Latin
Am
eric
a
Nor
th A
mer
ica
Per
cent
age
of R
espo
nden
ts
HNWI Wealth Manager
HNWI and Wealth Manager Assessment of HNWI Propensity to Use Automated Advisory Services, Q1 2015
15 LinkedIn Webinar_v2.0pptx
Younger HNWIs are further propelling the rise of automated advice
Note: Questions asked: “Would you ever consider having a portion of your wealth managed by an automated advisory service”?; “How much of your portfolio would you consider transferring to an automated advisor”?
Source: Capgemini and RBC Wealth Management Global HNW Insights Survey, 2015
HNWI Willingness to Use Automated Advisory Services and to Transfer Proportion of their Wealth to Automated Advisory Services, by Age, Q1 2015
Proportion of Wealth HNWIs are Willing to Transfer to Automated Advisory Services
Willingness to Use Automated Advisory Services
30.3%
38.6%
54.7%
71.3% 70.9%
0%
25%
50%
75%
60 andAbove
50–59 40–49 30–39 Under 30
Res
pond
ents
53.2%
60.4%
49.3%
41.4%
29.8%
46.8%
39.6%
50.7%
58.6%
70.2%
0% 25% 50% 75% 100%
60 and Above
50–59
40–49
30–39
Under 30
Respondents
Below 50% At least 50%
16 LinkedIn Webinar_v2.0pptx
However, current progress of automated advisors might just be reflecting the tip of the iceberg in terms of disruption
Source: Capgemini Financial Services Analysis, 2015; http://www.investopedia.com/terms/i/industrylifecycle.asp
Automated Advisor Life Cycle in Wealth Management Industry
Pre-Birth Birth Innovation Growth Maturity Decline
Sca
le /
Mar
ket S
hare
Current Stage of Automated
Advisory Services