High-net-worth individuals (HNWI) are the core of wealth management. There are over 7.9 million of them in just North America, with the Asia-Pacific region being the second largest, having 7.4 million HNWIs. How to meet their expectations with your services? We discuss it in this article, so read on to find out more!
Who Are High-Net-Worth Individuals (HNWIs)?
In general, high-net-worth individuals are people who own over $1 million in liquid assets after accounting for their liabilities. According to World Report Series 2024, Wealth Management, created by Capgemini, there are about:
- 7.9 million HNWIs in North America,
- 7.4 million HNWIs in the Asia-Pacific region,
- 5.8 million HNWIs in Europe,
- 900 thousand HNWIs in the Middle East,
- 600 thousand HNWIs in Latin America,
- 200 thousand HNWIs in Africa.
Interestingly, according to the same report, the number of HNWIs rose 5.1% worldwide from 2022 to 2023, which could indicate further growth in this sector and a larger demand for wealth management services.
The Changing Expectations of High-Net-Worth Individuals for Wealth Management
We are currently undergoing what was called the Great Wealth Transfer. Assets are handed over to Millenials and Gen Zs. However, this also poses an issue—the expectations of HNWIs evolve with each generation.
What high-net-worth individuals of the older generations wanted was exclusivity and physical interactions. Current, freshly new HNWIs demand something different: sustainability, personalization and digitization. Let’s look at the current trends in more detail.
ESG Investments
One of the key changes that occur among high-net-worth individuals is that they are currently looking for ESG-investment-oriented wealth management services. The younger HNWIs are much more environmentally aware and this is reflected in the way they want to multiply their money.
Digitization
Another crucial trend in wealth management is connected with the Internet. New HNWIs prefer to communicate with their wealth managers through digital channels rather than traditional ones, which, on the one hand, is a challenge but, on the other hand, a major opportunity.
Investment firms and wealth managers need to adjust to this trend and invest in relevant technologies to enable their clients to use the most convenient form of communication.
Personalization
Personalization is a buzzword and the goal of any business. Clients are already accustomed to brands trying to outdo each other in terms of customization and adjusting to their needs. Thus, it is not surprising that the same trend can be observed in the expectations high-net-worth individuals have regarding their wealth management services.
How to Meet the Expectations of HNWIs?
With all of the above happening rapidly, you might wonder: How do we adapt to these changes and attract high-net-worth individuals to our wealth management services? Several strategies may help you achieve this goal. Take a look below.
Use Advanced Digital Platforms for Wealth Management
There are multiple tools available for wealth managers that will help you meet the expectations of HNWIs, WealthArc being one of them. What should you look for?
- Digital client portal—This will enable you to streamline communication with your clients via digital channels. Additionally, it’s a great tool for collecting client data to personalize your services.
- Risk management modules—Platforms like WealthArc come with robust risk management modules that let you:some text
- calculate investment risks for different assets,
- research sustainable investments and detect indicators of ESG investing greenwashing,
- adjust risk criteria for each client to ensure that you offer them investments in line with your strategy.
- AI investing modules—Such modules are excellent for clients who want excellent care but are looking to try investing on their own. They can do that with the help of robo advisors.
- Elaborate reporting—This is key to presenting the results of your strategies to high-net-worth individuals and showing them why they should trust you with wealth management. Such reporting modules enable you to present reports in different file formats and to visualize data according to the client’s preferences.
Care for Customer Experience at All Times
High-net-worth individuals strive for positive customer experience. Sometimes, it is even more important than your portfolio management (as long as it is still effective). You need to build trust with HNWIs and ensure that their expectations are met.
This is why you need to utilize digital channels, adjust your reporting and risk management—conduct all the actions available with advanced digital platforms.
Be Efficient
Internal inefficiencies are the road to negative customer experience, missing excellent investment opportunities, and, consequently, client dissatisfaction. This is why you need to invest in tools and optimize your processes to provide your services efficiently.
This includes investing in automation (did you know that WealthArc can automatically consolidate your client’s portfolios) for internal and external processes, monitoring how your organization operates, finding bottlenecks, and fixing them.
The Takeaway
Meeting the expectations of high-net-worth individuals is not easy in wealth management, but it’s not impossible either. Modern technology is an invaluable tool for achieving this goal… yet it is not enough. You also need to optimize your business internally and adopt a client-centric mindset to truly succeed. While we can’t help you with the latter, we might provide you with the tech you need—contact us at WealthArc and discover the power of our platform!
You might also read: Personalizing Client Experiences in Wealth Management
References:
- https://www.capgemini.com/wp-content/uploads/2024/05/WWR_2024_web.pdf
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