The consultancy speculated that many affluent clients who graduate into the high-net worth (HNW) category, might also be more likely to enlist the services of professional wealth-management services after discovering the benefits of such a service early on.
To tap into and best service this emerging client segment, it’s important wealth managers understand their needs and wants.
Unlike their HNW counterparts, the BCG said the affluent client viewed having a wide variety of options as less important than low fees. A whopping 71% of respondents reported fee levels were a top three-criterion in choosing a wealth manager.
The BCG also found that this type of client tends to be highly engaged in the investment process and are technologically savvy. “One third of our client-needs survey respondents r,
Accelerating Digital Innovation
The third area that needs wealth managers’ attention is digital innovation. Though 97% of respondents said they “were committed to making digital transformation a top priority”, yet only 7% of them said they already had a targeted and individualised digital platform, although one third of clients cite digital sophistication as a top reason for choosing a wealth manager.
Enhancing their digital offering would not only make wealth managers mroe attractive to prospective clients. It would also help them engage clients – who are increasingly used to receiving advice and products via a digital channel – more effectively. “Ultimately, the combination of better digital engagement and smart analytics has the potential to lift revenues significantly,” the BCG asserted.
“Smart analytics allow for precise customer targeting through both descriptive and predictive analysis,” said the management consulting firm. “Wealth managers now have the opportunity to use behavioural, demographic and lifestyle data to think ahead of the client in determining the next logical investment.”
However, the BCG warned it is important for wealth managers to realise that “digital technology is not just another silo next to their traditional business model but rather a change in their DNA, requiring systematic process redesign and integration with legacy elements.”
Again, the BCG stressed that the success of this digital initiative hinges upon wealth managers’ adaptability and willingness to let go of some of the old methods of operation.
So really, by devising creative solutions to tightening regulation on the one hand and accelerating digital innovation on the other, wealth managers have the opportunity to kill two birds with one stone and simultaneously tap into the increasingly important affluent client segment.
