HNWIs Experienced Another Year of Strong Returns, but Improving the Personal Connection with Wealth Managers is Key to Increasing Satisfaction

In addition to the strong HNWI growth in 2017 with global HNWI investment returns up 27.4% in 2017, asset allocation remained fairly stable though real estate increased in share by 2.8 percentage points to 16.8% to become the 3rd largest asset class―after equities and cash.

HNWIs continued to bank with multiple wealth management firms, but the trends towards asset consolidation around the primary wealth management provider continues to increase. On average, clients engaged the services of 2.2 firms compared to 2.6 firms in 2014.

While year-over-year global HNWI satisfaction levels ticked upward, a passing-grade 70% HNWI satisfaction levels were not achieved, suggesting that returns alone cannot sustain a wealth management business. Only 55.5% of HNWIs globally said they connected strongly with their wealth manager (Q1 2018), despite substantial investment returns over the past two years.

Because the quality of HNWIs’ connection with their wealth managers is not correlated to present modes of introduction, opportunity exists for more innovative approaches. Better personal connections between wealth managers and their HNW clients may lead to better HNWI satisfaction scores.

HNWI Investment Performance vs. Change in Satisfaction, Q1 2016–Q1 2018 (Select Markets)

HNWI Investment Performance vs. Change in Satisfaction, Q1 2016–Q1 2018 (Select Markets)

Note: Question asked: “Thinking about the financial assets that you have invested with wealth management firms, roughly how did they perform last calendar year?”; “How satisfied are you with your primary wealth manager (the individual who manages your wealth) and your primary wealth management firm?”; Germany and Indonesia do not feature in any cluster as they are outliers; Only wealth manager satisfaction values are represented in the above chart; Bubble sizes represent absolute satisfaction levels reported in 2018 by HNWIs with their primary wealth managers in the market
Source: Capgemini Financial Services Analysis, 2018; Capgemini Global HNW Insights Survey 2016, 2017, 2018