Asia-Pacific home to most unsatisfied HNWs

The Asia-Pacific region has extended its lead over other regions as having the largest high net-worth individual (HNWI) population, but investors’ satisfaction with their wealth management firms is significantly lower than that of their global counterparts, according to Capgemini’s 2018 Asia-Pacific Wealth Report.

The report found that the Asia-Pacific generated 41.4 per cent of all new global HNWI wealth, with emerging markets driving more than half of regional wealth growth.

India experienced the largest increase in HNWI wealth from 2016 to 2017, jumping 21.6 per cent, while Australian HNWI wealth had increased 10.2 per cent in the same time frame.

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Asia-Pacific HNWI wealth was also forecasted to surpass US$42 trillion by 2025, fuelled primarily by emerging Asian markets.

But, despite the surge in HNWIs, satisfaction levels remained below 70 per cent for Asia-Pacific ex Japan investors, largely due to a lack of holistic services offered by wealth management firms, and concern over value delivered for management fees charges.

Other low satisfaction triggers were too few tailored solutions and low or impersonal connections between HNWIs and wealth managers, and 95.7 per cent of HNWIs with a strong connection to their wealth managers said they were likely to consolidate wealth with them.

The report also found that equities remained the dominant asset class in Asia-Pacific HNWI portfolios, and cash now accounted for more than a quarter of holdings.

Although client satisfaction was low, Asia-Pacific wealth management firms had made significant progress in ramping up their hybrid advice programs as ‘BigTechs’ were entering the industry and seizing market opportunities.

The report suggested wealth management firms in Asia needed to determine how they invested for success in the coming disrupted market, and a shift to innovative budgeting approaches and strategic investments in emerging technologies could support business model transformations.

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