The number of HNWIs (>$1M investable assets) grew by 2 million globally, with their collective wealth expanding at the fastest pace in five years. The US led this growth with a 10% increase, while the ultra-high-net-worth segment (>$30M), representing just 1% of the population, now controls 35% of the total wealth.
A major shift is underway as the percentage of HNWIs using a single wealth manager has plummeted from nearly 40% to just 19% since 2019. This indicates that clients are unbundling services, seeking best-in-class solutions from multiple providers, including traditional firms, robo-advisors, and family offices.
While performance remains crucial, HNWIs now demand a more proactive, personalized, and empathetic relationship with their advisors. They expect a seamless, real-time experience akin to modern tech platforms and are frustrated by inefficiencies, such as having to repeatedly state their financial objectives to their managers.
AI and automation are identified as key solutions to the industry's challenges. By automating the 40% of a relationship manager's activities that are considered operational, firms can free up advisors to focus on building client relationships, providing proactive advice, and delivering the personalization clients demand.
HNWIs are increasing their allocation to equities and fixed income while reducing cash holdings. There is also strong demand for access to a broader range of products, particularly alternative investments like private equity, even if immediate allocation doesn't follow.
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