Wealth managers deliver robust investment performance, but HNWIs want holistic value
Our findings on HNWI Investment performance and behaviors are derived from the Global HNW Insights Survey, the industry’s largest and most in-depth examination of high net worth individuals. Now in its fourth year, it queried more than 2,500 HNWIs, including nearly 1,100 from Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, and Singapore, to better understand the evolving nature of HNWI allocation throughout the region.
- Asia-Pacific (excl. Japan) HNWIs saw the performance of their investments held with wealth managers soar 33.0% in 2016, compared with 24.6% for HNWIs in the rest of the world. There was a divergence across the region’s varied markets, with HNWI investments in emerging markets out-performing those in more developed markets. The primary reasons for the difference in returns were the prevalence of credit to leverage returns and a more growth-focused investment philosophy.
- Investment performance helped to drive HNWI allocations toward equities to a five-year high, although cash allocations increased as well. HNWI allocations to equities and cash increased significantly year over year, up 4.4 percentage points and 4.3 percentage points, respectively, and similar to trends in the rest of the world.
- HNWI satisfaction, however, remains muted in Asia-Pacific (excl. Japan), partially driven by concerns regarding fee structures. Fee transparency and the value delivered were the two top concerns for HNWIs in the region, above the overall level of fees.
- These trends point to significant business model disruption on the horizon in Asia-Pacific, as HNWIs seek value beyond investment returns and Net Promoter Scores® lag in key wealth markets. A more personalized approach to wealth management will be critical to firms’ success.
Performance of HNWI Financial Assets Invested with Wealth Management Firms, Q2 2017
Note: Question asked: “Thinking about the financial assets that you have invested with wealth management firms, roughly how did they perform last calendar year?”
Source: Capgemini Financial Services Analysis, 2017; Capgemini Global HNW Insights Survey 2017