The World Wealth Report 2022
Customer-first strategy - Putting the client at the heart of wealth management.
Europe moves past Asia Pacific to second place in growth rate, fueled by a recovering economy in Europe and slowing growth in Asia Pacific; 70% of HNWIs globally have invested in digital assets and currencies
In 2021, the top-four positions in HNWI population by market were retained by the United States, Japan, Germany, and China respectively, comprising 63.6% of the global HNWI population, an increase of 0.7% from 2020. Ultra-HNWIs ($30m>) led global wealth and population growth, at the rates of 9.6% and 8.1%. While the Millionaires Next Door ($1-5m) population (7.7%) and wealth (7.8%) grew the slowest, witnessing an acceleration in population and wealth growth rates. Conversely, the Mid-Tier Millionaire ($5-30m) population and wealth increased to 8.5% and 8.4%. The report also indicates that the growth gap across wealth bands is shrinking, indicating a more level playing field, due to improved information access for investors and democratization of asset classes.
To capture emerging client segments, firms must rethink their engagement strategies
The demographic of HNWIs has continued to evolve, with increasingly more women, LGBTQ+ individuals, millennials and Gen Z’s now seeking wealth management services. These emerging client segments each have their own values, preferences, and requirements which many wealth management firms are currently unequipped to provide for, resulting in many of these HNWIs pivoting to more adaptive competitors or smaller family offices.
Wealth management firms must embrace data-driven capabilities
The wealth management sector is undergoing a diversification of investment options, from Sustainable Investing (SI) to the growing prevalence of digital assets. As the ESG imperative continues to grow, wealth management firms must strive to make educational support and expansive product selection for HNWIs, key pillars of their strategies. The report found that globally, 55% of HNWIs have stated that investing in causes with a positive ESG impact is critical, with 64% of HNWIs asking for ESG scores to learn about a fund’s societal impact. However, 40% of wealth managers find it challenging to showcase an ESG impact.
Create Chief Customer Officer roles to deliver a superior experience
An increasing number of wealth management firms have been establishing a new Chief Customer Officer (CCO) role, aimed at nurturing client intimacy, and putting them at the heart of the wealth management process. The role focuses on orchestrating both data and digital benefits across the organization to meet evolving and complex client demands and drive loyalty.