Lack of online services a deal breaker for HNWIs

[SINGAPORE] An analysis of the world's wealthy had this message for wealth managers here: If the services you provide are not integrated across all communication channels, including digital ones, your client is very likely to leave you for another firm.

This is especially true among the wealthy in the emerging markets of Latin America and the Asia-Pacific ex Japan region. They are looking for an "integrated channel experience". This means a client should be able to start an activity on one channel, like on the phone or in a face-to-face meeting, and finish it on another channel, like email, website, mobile apps, social media or videos.

In addition, there is a growing importance of digital services that cuts across all wealth levels. Those aged below 40 are especially likely to view digital services as important.

"The younger high net worth individuals (HNWIs) made their own fortune through digital means themselves, so they would expect from wealth management firms the same 24/7 access they are giving to their own clients," said Claire Sauvanaud, vice-president and senior account executive for Capgemini Asia Pacific.

Stefan Mueller, managing director and head of investments and products at the Royal Bank of Canada's (RBC) wealth management business in Asia, said that the industry faces a "make or break" situation.

"The winners make it convenient to share knowledge and interact with clients," he said.

RBC Wealth Management and Capgemini Financial Services released World Wealth Report 2014 yesterday, a comprehensive look at the world's HNWIs - those with investable assets of more than US$1 million, excluding their primary residence. More than 4,500 HNWIs across 23 major markets were interviewed for the report.

The report found that nearly two-thirds of HNWIs expect to manage most or all of their wealth relationships digitally in five years' time. The same proportion would consider leaving their current firm if they cannot get an integrated wealth management experience across different channels.

In Latin America and the Asia-Pacific excluding Japan, over 80 per cent of HNWIs said that they will consider moving to another firm if this kind of integrated experience is not provided. This compares to around 60 per cent in Europe and North America.

"Social media and video tools are important notably in Asia. In Asia you have two very concentrated financial centres, Hong Kong and Singapore, yet HNWIs are spread across the whole region," said Mrs Sauvanaud.

HNWIs want digital capabilities to keep them informed and to enable transactions, the report said. Where engaging the firm for advice is concerned, however, they prefer being there in person and through the phone.

Wealth managers have been investing heavily in the digital space from last year. Early this year, DBS Bank said that it will invest $15 million over three years in Watson, a cloud-based service of tech giant IBM that can process large amounts of information. The bank plans to use Watson to help its relationship managers recommend products to clients.