An EY report shows that 64% of respondents in Asia Pacific plan to use more digital and virtual tools, while 61% said they plan to engage more with their advisor virtually. As a result of the pandemic, however, 49% of respondents expect the relationship with their wealth manager or advisor to become less personal from a human interaction perspective.
“Customers are increasingly relying on [digital] tools to analyse their investments and manage their wealth more efficiently, but financial services firms have to find a way to also leverage technology to bring more value and curated options,” said Elliott Shadforth, EY Asia Pacific wealth & asset management leader.
Based on a survey of 2,500 wealth management clients in 21 geographies, the 2021 EY Global Wealth Research Report examined what investors value most in their wealth management relationships.
On a country basis, 69% of respondents in Singapore plan to use more digital and virtual tools, with 56% in Hong Kong saying the same. In addition, 73% of Hong Kong respondents and 57% of those in Singapore are willing to share more personal data to improve services with their main wealth manager.
Personal service
Yet, wealth managers’ rich clients want to be treated as special, and they’re happy to pay up.
Over three-quarters (76%) of survey respondents in Asia Pacific are willing to pay more for personalised service; the majority (70%) would also share personal data with their primary wealth manager in order to receive it.
On the other hand, wealth management clients want to change the way they pay for specific wealth and investment services. For discretionary investment management, there is growing preference for performance-based fees, which creates a stronger perception of alignment between charges and value creation. However, for basic wealth offerings, such as portfolio reports and life goals coaching, 16% and 8% of respondents respectively expect to receive them at no cost by 2024.
“The notion of what value really means in wealth management is rapidly changing and technology has a big role to play in elevating experiential factors so that they’ll become key drivers of pricing going forward,” Shadforth said.
ESG enthusiasm
Unsurprisingly considering the media and marketing prominence during the past year, ESG and impact investing have become a growing area of focus for Asia Pacific clients and a differentiating factor for wealth managers.
The vast majority of respondents in the region (89%) have “personal sustainability goals”, higher than the 78% global average who said the same, yet 59% feel their wealth manager falls short in understanding their values. At the same time, interest in specific ESG themes has increased over the past year, with 92% of respondents in Singapore and 89% of those in Hong Kong saying that it’s important to consider ESG parameters in their portfolios.
In light of this, a major reallocation of investments could be on the cards – with 88% of survey respondents believing it is important to consider ESG parameters in their portfolios, while impact investing is expected to grow through 2024, reaching an average adoption level of 52% from 45% in 2021, according to EY.
However, a recent HSBC Aset Management survey of Hong Kong and Singapore invetors found a disconnet between their intentions and actions.
Although 80% of investors think environmental and ethical issues are “central” to managing their investment, only a quarter explicitly include ESG in their decisions, the survey found.
A lack of suitable sustainable investment products and limited choices are major barriers to sustainable investing, HSBC AM found.
