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2019: Trends to Watch in Global Wealth Management

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2019: Trends to Watch in Global Wealth Management

Summary

Regulation, technological change, and the bull run potentially coming to an end have all been discussed by wealth managers for so long that the risks associated with these trends have blended in. Paradoxically this means the risks are now underestimated, if not outright ignored. Yet as providers keep chasing new money and record highs in net new money figures-partly thanks to opening up to new demographics-they will have no choice but to start thinking about countering threats related to financial markets downturns and cybersecurity.

Scope

- The value of non-resident deposits in the UAE surged in 2018, with the Common Reporting Standard (CRS) potentially contributing to this trend.

- The US, where 27% of HNW offshore wealth is already booked, will continue to benefit from not participating in CRS.

- Only 43% of wealth managers are concerned about the effect of data breaches on their company's brand, although nearly 60% agree their clients are increasingly worried about data breaches and cybercrime.

- The older demographics are more prudent and less likely to be a victim of financial fraud, but their losses are likely to be higher than among younger age groups.

- Female millionaires are younger than men. In the Middle East and Africa, 71.7% of female HNW individuals are 50 and under, while 70% of HNW men are 51 and over.

Reasons to buy

- Understand the key trends impacting the wealth management industry in 2019 and how to respond.

- Discover the effect of CRS on the offshore industry and how to benefit.

- Understand the recommended approach to client portfolio strategies in the context of current market conditions.

- Learn about risks resulting from the industry's growing dependence on technology and how to hedge against cyber threats.

- Stay ahead of your competitors by reaching out to new emerging client demographics that offer huge revenue growth potential.

READ MORE

Table Of Content

Scope

Table of Contents

1. EXECUTIVE SUMMARY

1.1. In 2019 the wealth management industry will reconsider its priorities

1.2. Key findings

1.3. Critical success factors

2. IN THE WAKE OF CRS, NON-PARTICIPATING COUNTRIES SUCH AS THE US WILL CONTINUE TO GROW AS OFFSHORE CENTERS

2.1. CRS implementation will channel more wealth to the US

2.1.1. The OECD's CRS is the most comprehensive international effort to tackle tax evasion

2.1.2. Shifts in investment structures will be slight due to anti-avoidance provisions

2.1.3. HNW offshoring money dipped ahead of CRS but has since rebounded

2.1.4. The low importance of client anonymity means CRS will not massively disrupt the offshore market

2.1.5. CRS will benefit non-participating countries and low tax jurisdictions

2.1.6. The US and its dependencies remain the clear winners under CRS

3. VOLATILITY WILL REQUIRE A RETHINK OF DIVERSIFICATION

3.1. Bias towards equities is leaving investors exposed to a rise in volatility

3.1.1. Volatility promises to pick up as the year progresses

3.1.2. The average HNW portfolio is heavily biased to equities and thus overly exposed to market shocks

3.1.3. Many wealth managers seem oblivious to a potential crash

3.2. Providers should push for further diversification in the onshore and offshore space to ready investors' portfolios for a potential downturn

3.2.1. Alternatives could add further diversification, but trust and client education are needed to drive uptake

3.2.2. Wealth managers should pay greater attention to geographic and industry diversification

3.2.3. Reaching out to clients will help avoid rushed decision-making

4. AS USE OF TECHNOLOGY INCREASES, WEALTH MANAGERS WILL HAVE TO START THINKING ABOUT CYBERSECURITY

4.1. Adoption of technology in wealth management has been growing

4.1.1. 43% of HNW-focused wealth managers now offer robo-advice

4.1.2. New operational risks emerge as a consequence of tech development

4.2. The industry is underestimating the importance of cybersecurity

4.2.1. Customers might be worried about fraud, but it does not prompt them to switch

4.2.2. Client-advisor relationships mitigate the consequences of failures on a company level

4.2.3. Concern about cybercrime is the highest in digitally advanced regions

4.3. The risk of incurring costs and regulatory scrutiny will compel competitors to act

4.3.1. The cost of brand damage is difficult to measure

4.3.2. Cybercrime prevention should creep up the list of priorities

5. NEW CLIENT DEMOGRAPHICS WILL BECOME MORE PREVALENT

5.1. Wealth managers need to think about the younger generations

5.1.1. Involving heirs in decision-making will be the most effective retention method

5.1.2. Advisor choice differs between the next generation and their parents

5.2. Hybrid services remain in demand among the next generation

5.2.1. Catering to the next generation via digital services is key

5.2.2. The human touch is also in demand by millennials

5.2.3. Investing in socially responsible companies is important to the next generation

5.3. Gender equality will become more prevalent in the industry

5.3.1. More women will enter previously male-dominated industries

5.3.2. The demographic characteristics of HNW women differ from HNW men

5.4. Faith-based investing will open investing to new demographics

5.4.1. Faith-based digital platforms are expanding in the wealth management industry

5.4.2. Religion-compliant investments often align with socially responsible investing

5.5. Targeting the masses will aid AUM growth

5.5.1. Digital services are the gateway to the mass affluent

5.5.2. The mass affluent should be viewed as potential HNW clients

6. APPENDIX

6.1. Abbreviations and acronyms

6.2. Definitions

6.2.1. Affluent

6.2.2. HNW

6.2.3. Liquid assets

6.2.4. Mass affluent

6.2.5. Residency

6.3. Methodology

6.3.1. GlobalData's 2018 Global Wealth Managers Survey

6.3.2. GlobalData's 2017 Global Wealth Managers Survey

6.3.3. GlobalData's 2018 Mass Affluent Investors Survey

6.3.4. GlobalData's 2018 Consumer Payments Insight Survey

6.3.5. Weighted level of agreement

6.3.6. Exchange rates

6.4. Secondary sources

6.5. Further reading


List Of Figure

List of Figures

Figure 1: The decline in offshore wealth has been arrested

Figure 2: Total non-resident assets slowly increased over the CRS implementation period

Figure 3: While tax is a major driver of offshoring, CRS does not interfere with tax-minimization strategies

Figure 4: The UAE may benefit as an offshore booking center provided it retains permissive tax residency requirements

Figure 5: Already the world's leading offshore center, the US will benefit significantly from being outside CRS

Figure 6: Volatility increased in 2018

Figure 7: The average HNW portfolio is increasingly exposed to equity risk

Figure 8: Concerns regarding a financial market downturn are relatively low among wealth managers

Figure 9: The proportion HNW investors allocate to alternatives varies significantly across the world

Figure 10: Driving trust is paramount to encourage uptake of alternatives

Figure 11: An increasing number of wealth management firms offer technology-based solutions

Figure 12: Involving the next generation in the estate planning process is key to retaining clients

Figure 13: Digital channels are more important to the next generation than current clients

Figure 14: Females source more of their wealth through inheritance than men

Figure 15: Access to a human advisor is very important according to 30% of mass affluent investors


List Of Table

List of Tables

Table 1: US dollar exchange rates

Licence Rights

Single User License:
Report can be used by individual purchaser only

Site License:
Report can be shared by unlimited users within one corporate location, e.g. a regional office

Corporate User License: 
Report can be shared globally by unlimited users within the purchasing corporation e.g. all employees of a single company

Section Purchase

To know more information on Purchase by Section, please send a mail to support@kenresearch.com

Products and Companies

Products

MiFID, GDPR, CRS, common reporting standard, offshore investments, FATCA, regulation, millennials, women investors, asset allocation, HNW, mass affluent, robo-advice, cyber security, cybersecurity, data breaches, market volatility, cyber threats, robo-advice, faith-based investing, fintech, wealthttech, panama papers, paradise papers


Companies

TSB

UBS

Credit Suisse

Feedzai

DBS Bank

SheCapital

WorthFM

Ellevest

Legal & General

Wahed Invest

Crescent Wealth

Yolt

Wealthify

2019: Trends to Watch in Global Wealth Management

Summary

Regulation, technological change, and the bull run potentially coming to an end have all been discussed by wealth managers for so long that the risks associated with these trends have blended in. Paradoxically this means the risks are now underestimated, if not outright ignored. Yet as providers keep chasing new money and record highs in net new money figures-partly thanks to opening up to new demographics-they will have no choice but to start thinking about countering threats related to financial markets downturns and cybersecurity.

Scope

- The value of non-resident deposits in the UAE surged in 2018, with the Common Reporting Standard (CRS) potentially contributing to this trend.

- The US, where 27% of HNW offshore wealth is already booked, will continue to benefit from not participating in CRS.

- Only 43% of wealth managers are concerned about the effect of data breaches on their company's brand, although nearly 60% agree their clients are increasingly worried about data breaches and cybercrime.

- The older demographics are more prudent and less likely to be a victim of financial fraud, but their losses are likely to be higher than among younger age groups.

- Female millionaires are younger than men. In the Middle East and Africa, 71.7% of female HNW individuals are 50 and under, while 70% of HNW men are 51 and over.

Reasons to buy

- Understand the key trends impacting the wealth management industry in 2019 and how to respond.

- Discover the effect of CRS on the offshore industry and how to benefit.

- Understand the recommended approach to client portfolio strategies in the context of current market conditions.

- Learn about risks resulting from the industry's growing dependence on technology and how to hedge against cyber threats.

- Stay ahead of your competitors by reaching out to new emerging client demographics that offer huge revenue growth potential.

READ MORE

Scope

Table of Contents

1. EXECUTIVE SUMMARY

1.1. In 2019 the wealth management industry will reconsider its priorities

1.2. Key findings

1.3. Critical success factors

2. IN THE WAKE OF CRS, NON-PARTICIPATING COUNTRIES SUCH AS THE US WILL CONTINUE TO GROW AS OFFSHORE CENTERS

2.1. CRS implementation will channel more wealth to the US

2.1.1. The OECD's CRS is the most comprehensive international effort to tackle tax evasion

2.1.2. Shifts in investment structures will be slight due to anti-avoidance provisions

2.1.3. HNW offshoring money dipped ahead of CRS but has since rebounded

2.1.4. The low importance of client anonymity means CRS will not massively disrupt the offshore market

2.1.5. CRS will benefit non-participating countries and low tax jurisdictions

2.1.6. The US and its dependencies remain the clear winners under CRS

3. VOLATILITY WILL REQUIRE A RETHINK OF DIVERSIFICATION

3.1. Bias towards equities is leaving investors exposed to a rise in volatility

3.1.1. Volatility promises to pick up as the year progresses

3.1.2. The average HNW portfolio is heavily biased to equities and thus overly exposed to market shocks

3.1.3. Many wealth managers seem oblivious to a potential crash

3.2. Providers should push for further diversification in the onshore and offshore space to ready investors' portfolios for a potential downturn

3.2.1. Alternatives could add further diversification, but trust and client education are needed to drive uptake

3.2.2. Wealth managers should pay greater attention to geographic and industry diversification

3.2.3. Reaching out to clients will help avoid rushed decision-making

4. AS USE OF TECHNOLOGY INCREASES, WEALTH MANAGERS WILL HAVE TO START THINKING ABOUT CYBERSECURITY

4.1. Adoption of technology in wealth management has been growing

4.1.1. 43% of HNW-focused wealth managers now offer robo-advice

4.1.2. New operational risks emerge as a consequence of tech development

4.2. The industry is underestimating the importance of cybersecurity

4.2.1. Customers might be worried about fraud, but it does not prompt them to switch

4.2.2. Client-advisor relationships mitigate the consequences of failures on a company level

4.2.3. Concern about cybercrime is the highest in digitally advanced regions

4.3. The risk of incurring costs and regulatory scrutiny will compel competitors to act

4.3.1. The cost of brand damage is difficult to measure

4.3.2. Cybercrime prevention should creep up the list of priorities

5. NEW CLIENT DEMOGRAPHICS WILL BECOME MORE PREVALENT

5.1. Wealth managers need to think about the younger generations

5.1.1. Involving heirs in decision-making will be the most effective retention method

5.1.2. Advisor choice differs between the next generation and their parents

5.2. Hybrid services remain in demand among the next generation

5.2.1. Catering to the next generation via digital services is key

5.2.2. The human touch is also in demand by millennials

5.2.3. Investing in socially responsible companies is important to the next generation

5.3. Gender equality will become more prevalent in the industry

5.3.1. More women will enter previously male-dominated industries

5.3.2. The demographic characteristics of HNW women differ from HNW men

5.4. Faith-based investing will open investing to new demographics

5.4.1. Faith-based digital platforms are expanding in the wealth management industry

5.4.2. Religion-compliant investments often align with socially responsible investing

5.5. Targeting the masses will aid AUM growth

5.5.1. Digital services are the gateway to the mass affluent

5.5.2. The mass affluent should be viewed as potential HNW clients

6. APPENDIX

6.1. Abbreviations and acronyms

6.2. Definitions

6.2.1. Affluent

6.2.2. HNW

6.2.3. Liquid assets

6.2.4. Mass affluent

6.2.5. Residency

6.3. Methodology

6.3.1. GlobalData's 2018 Global Wealth Managers Survey

6.3.2. GlobalData's 2017 Global Wealth Managers Survey

6.3.3. GlobalData's 2018 Mass Affluent Investors Survey

6.3.4. GlobalData's 2018 Consumer Payments Insight Survey

6.3.5. Weighted level of agreement

6.3.6. Exchange rates

6.4. Secondary sources

6.5. Further reading


List Of Figure

List of Figures

Figure 1: The decline in offshore wealth has been arrested

Figure 2: Total non-resident assets slowly increased over the CRS implementation period

Figure 3: While tax is a major driver of offshoring, CRS does not interfere with tax-minimization strategies

Figure 4: The UAE may benefit as an offshore booking center provided it retains permissive tax residency requirements

Figure 5: Already the world's leading offshore center, the US will benefit significantly from being outside CRS

Figure 6: Volatility increased in 2018

Figure 7: The average HNW portfolio is increasingly exposed to equity risk

Figure 8: Concerns regarding a financial market downturn are relatively low among wealth managers

Figure 9: The proportion HNW investors allocate to alternatives varies significantly across the world

Figure 10: Driving trust is paramount to encourage uptake of alternatives

Figure 11: An increasing number of wealth management firms offer technology-based solutions

Figure 12: Involving the next generation in the estate planning process is key to retaining clients

Figure 13: Digital channels are more important to the next generation than current clients

Figure 14: Females source more of their wealth through inheritance than men

Figure 15: Access to a human advisor is very important according to 30% of mass affluent investors


List Of Table

List of Tables

Table 1: US dollar exchange rates

Single User License:
Report can be used by individual purchaser only

Site License:
Report can be shared by unlimited users within one corporate location, e.g. a regional office

Corporate User License: 
Report can be shared globally by unlimited users within the purchasing corporation e.g. all employees of a single company

To know more information on Purchase by Section, please send a mail to support@kenresearch.com

Products

MiFID, GDPR, CRS, common reporting standard, offshore investments, FATCA, regulation, millennials, women investors, asset allocation, HNW, mass affluent, robo-advice, cyber security, cybersecurity, data breaches, market volatility, cyber threats, robo-advice, faith-based investing, fintech, wealthttech, panama papers, paradise papers


Companies

TSB

UBS

Credit Suisse

Feedzai

DBS Bank

SheCapital

WorthFM

Ellevest

Legal & General

Wahed Invest

Crescent Wealth

Yolt

Wealthify