Asset manager consolidation top of mind for HNWIs

More than 95% of high net worth individuals in Asia Pacific (excluding Japan) are prepared to consolidate assets with their primary wealth manager, provided there's a strong connection. But it's less likely in Australia.

The number dips to 73% for HNWIs who report mediocre or low personal connection with their asset managers, Capgemini's latest study said.

Releasing its annual Asia Pacific Wealth Report, Capgemini Australia said the region's wealth management firms have potential to increase assets under management if they target consolidation of HNWI assets.

However, one of the consequences of consolidation could be that an increased amount of wealth sits outside professional investment management, the research notes.

Asia Pacific remains the global  HNWI powerhouse, generating 41.4% of all new HNWI wealth globally in 2017. The research said 12.1% growth in HNWI population, and a 14.8% rise in wealth means the region is now forecast to surpass US$42 trillion by 2025.

Though showing improvement, Asia Pacific (excluding Japan) HNWIs' satisfaction with their wealth managers remains below 70% and is considerably lower than levels in the rest of the world. Ultra-HNWIs were the least satisfied investor class despite the high returns being delivered.

Concerns over the lack of holistic services from wealth management firms; perceived low value-add management fees; and a low personal connection with wealth managers were top reasons for this discontent.

Capgemini head of financial services for Australia and New Zealand, Phil Gomm, said: "Vertically integrated financial services business models are also demonstrating complex conflict of interest challenges for advisers."

"Senior leaders acknowledged recently in the Royal Commission that robo-advice services, with hardened process orchestration, may be necessary to ensure increasingly strict regulatory compliance can be maintained and alignment can be assured with ethically sound business processes that avoid potential conflicts of interest and remain in line with community expectations."

Read more: HNWIAsia PacificCapgemini Australiainvestment
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