World Wealth Report 2016 Key Findings. November 2016

Transcription

1 World Wealth Report 2016 Key Findings November 2016

2 Agenda Overview High Net Worth Market Sizing Key Findings from the Global HNW Insights Survey Looking Forward: Changing Ecosystem and Digital Adoption Drives Need to Invest in Transformation Spotlight: Digital Maturity an Elusive Goal for Wealth Management Firms Way Forward 2

3 Overview

4 WWR 2016: Survey covering over HNWIs and 800 wealth managers across 23 countries Four Components of 2016 World Wealth Report 1 High Net Worth Market Sizing and Impact of Key Drivers of Wealth HNWI Investment and Allocation Preferences 2 3 Anniversary Special! - 20 Years of the World Wealth Report and Looking Ahead Spotlight on Digital Maturity of the Wealth Management Industry 4 4 4

5 High Net Worth Market Sizing

6 HNWI Financial Wealth By 2025, HNWI Wealth to reach US$100 trillion by 2025, almost triple the amount of 2006 HNWI Wealth Projection, 2006, 2015, 2025P (by Region) HNWI Wealth Growth P Total ,3 4,4 11,7 Global Africa Middle East Latin America 57.5% 54.9% 61.7% 44.3% 80.7% 65.5% 92.0% 58.4% 80 Total ,9 Europe 34.3% 46.2% 60 Total ,4 7,4 2,3 25,7 North America 47.5% 54.4% ,9 13,6 1,4 5,1 10,1 16,6 42,1 11,2 8,4 17, P Asia-Pacific 106.4% 142.0% Source: Capgemini Financial Services Analysis,

7 # of HNWIs ( 000) # of HNWIs ( 000) # of HNWIs ( 000) Among the Nordics, Demark saw the highest growth in the number of HNWIs Denmark Sweden Norway Change ( ) 69,0 11.6% 77, Change ( ) 93,1 10.6% 103, Change ( ) 126,9 7.7% 136, Real GDP expanded marginally by 1.1% in Real estate prices increased by 5.3% in Market Capitalization increased by 6.0% in National savings as a percentage of GDP decreased marginally to reach 25.5% in Real GDP expanded by 3.8% in Housing prices increased by 12.4% in Market Capitalization increased 6.0% in National savings as a percentage of GDP increased to 30.4% in Real GDP grew by 1.6% in Housing prices recorded a growth of 2.0% in Market Capitalization declined by 11.6% in Drivers of Wealth - Inhibitors of Wealth 7

8 Key Findings from the Global HNW Insights Survey

9 HNWIs trust and confidence in wealth management firms increased HNWI Trust and Confidence in Key Stakeholders Disagree Agree Primary HNWI Relationships 24.6% 24.1% 23.9% 12.0% Wealth Manager Wealth Management Firm 57,5% 59,4% 56,9% 73,9% 43.6% Industry Infrastructure 18.8% Financial Markets 30,8% 60,8% 41.8% 33.2% Regulatory Bodies and Institutions 35,1% 46,4% Wealth Sentiment 25.5% 20.6% Personal Ability to Generate Wealth 53,5% 61,9% Source: Capgemini Financial Services Analysis, 2016; Global HNWI Insights Survey 2016, Capgemini 9

10 Consolidated wealth management and sophisticated view on investments to attract HNWIs Investable Wealth Across Entities and Accounts, Globally, Q Most Important Elements for HNWIs to Choose Wealth Management Provider, by Age, Q Importance Difference (PP) Other 24,4% Primary wealth manager 21,8% Advice on investments Access to investments 39,5% 56,6% 39,1% 36,8% Locked up in my business 10,1% Other wealth managers 10,3% Physical cash 14,9% Retail bank account 18,4% General financial planning expertise Custody/safekeeping of assets Access to investment research and knowledge 37,7% 49,3% 35,1% 40,6% 31,5% 28,7% Source: Capgemini Financial Services Analysis, 2016; Global HNWI Insights Survey 2016, Capgemini 0% 15% 30% 45% 60% Respondents Under

11 (% of respondents) HNWIs are moving away from fee as percentage of assets Payment for Wealth-Related Services Difference (Percentage Points) % 30% 30,1% 28,1% 20% 23,6% 21,9% 20,5% 18,0% 17,4% 16,1% 12,7% 11,6% 10% 0% Percentage of assets Modular fee for service modules Based on investment performance Fixed yearly fees A combination of the above Current Ideal EXAMPLE: Introduction of modular fee structures with standard asset-based fees on automated (3 rd party) advice, and add-on fees for individual wealth manager services Source: Capgemini Financial Services Analysis, 2016; Global HNWI Insights Survey 2016, Capgemini 11

12 Looking Forward: Changing Ecosystem and Digital Adoption Drives Need to Invest in Transformation

13 Global WM market is characterized by an increasingly dynamic ecosystem and rising digital adoption Wealth managers not only need to offer novel solutions Offerings Flexible investment strategies to counter low interest and low inflation macro environment but must also play as a part of a wider, dynamic, ecosystem Ecosystem Dynamics Banks collectively performing non-differentiating tasks to reduce costs while whole heartedly embracing Digital Digital Adoption Proliferation of digital channels among HNWIs posing cyber security risks Lending increasingly viewed as key to expanding business with HNWIs HNWIs want to make thoughtful investment with a positive social impact Holistic, goal-based advise, based on achieving clients goals from business to lifestyle Robo advisers providing automated advise through digital channels, focusing on convenience Rising regulatory burden as wealth managers are overwhelmed by cost and uncertainly of regulations Intensifying competition due to new entrants (Fintech) and redoubled commitment to WM by incumbents Outsourcing of non-core processes such as HR and CRM by leveraging cloud Use of big data capabilities to enhance efficiency of core processes Use of self-service capabilities such as access to research through an app Source: Top 10 Trends in Wealth Management in 2016, Capgemini; Capgemini Consulting Team Analysis; Annual Reports 13

14 In addition, traditional WM players are marred by a combination of business and IT challenges Accessibility High fees limit access to wealth management services for mass and mass affluent clients HNWI preference for performance-based fees Customer Expectations Customers expectations of personalization, efficiency and low costs continue to grow Agility Ability to meet customer needs is limited by organization structures and technology infrastructure Lack of Trust Business Customer trust has been slow to recover following the financial crisis Inconsistency IT Fragmented, local legacy processes and technologies impede connectivity across the organization High Cost of Maintenance Updating and maintaining processes and technologies are costly and time-consuming Limited Flexibility / Agility Timely update of the processes and technologies is limited due to costs and efforts required High security requirements Rising adoption of digital channels among HNWIs may, potentially, increase susceptibility to cyber attacks Customer Demographics Inheritors of wealth may not necessarily choose to keep their parents financial advisors Source: Future of Financial Services, 2015, World Economic Forum 14

15 Firms are anticipating the need to invest for a changing industry Wealth Management Firms Future Investment Allocation Proposition Development 14,8% Business Model 14,7% External Modernization 21,6% Internal Modernization 17,8% Keeping Up 15,3% People and Culture 15,8% However, transformation takes a backseat to day-to-day needs Source: Capgemini Financial Services Analysis, 2016; WWR Executive Interviews,

16 Spotlight: Digital Maturity an Elusive Goal for Firms

17 Gap Between Wealth Managers Importance and Satisfaction on Digital Capability Areas (PP) Wealth mangers join HNWI demand for digital tools but their satisfaction falls short (%) 10 5 (15) (20) Wealth Manager Importance for/satisfaction with Different Digital Capability Areas Ability to create interactive proposals and presentations Meeting and document management 0 40% 45% 50% 55% 60% 65% Ability to Risk assessment and leverage CRM management for clients (5) systems to identify business Access to client information from beyond opportunities and the wealth management business Advisor desktop cross-sell Engage with client through (10) with all applications Regulatory digital tools and social media on a single platform compliance Ability to generate tailored recommendations for clients Access to multiple experts and advisors Client segmentation Real-time access to client profile and portfolio information Mobile/Remote access to applications and information Wealth Manager Importance with Digital Capability Areas (%) Prospecting through social media and other channels Area in which wealth managers are more satisfied than the importance they have given to digital capability areas Areas in which wealth managers are less satisfied than the importance they have given to digital capability areas Key: Wealth Manager perception of biggest gap areas on wealth manager specific digital capability of firms Source: Capgemini Financial Services Analysis, 2016; Capgemini Wealth Manager Survey,

18 Wealth management industry has medium digital maturity, which will not be sufficient to tackle digital disruption Average Digital Maturity Score of Wealth Management Firms Across Enterprise, Advisory, and Client Parameters Enterprise Vision Client Capability 2,9 3,6 3,5 3,4 Enterprise Culture 2,5 2,0 Client Experience 3,0 3,0 2,0 3,2 Enterprise Capability 2,9 2,8 3,0 3,1 3,5 3,3 Advisory Capability Advisory Engagement Advisory Productivity Source: Wealth Firm Score Capgemini Financial Services Analysis, 2016; Global HNWI Insights Survey 2016, Capgemini Third-Party Analyst Score 18

19 Digital maturity s importance is going to increase as HNWIs increasingly embrace new FinTech offerings HNWI Propensity to Use Automated Advisory Services and Current Frequency of Usage of Peer-to-Peer Advice Forums (%) Automated Advisory Services Use of P2P Advice Forums 100% 75% 50% 25% 49% 67% 76% 80% 70% 77% 52% 64% 48% 59% 61% 46% 33% 68% 100% 75% 50% 25% 6,7% 4,7% 14,5% 12,0% 20,2% 16,1% 6,4% 9,5% 8,5% 12,4% 8,9% 12,9% 20,1% 13,3% 11,3% 12,3% 11,0% 13,3% 11,4% 47,5% 48,4% 11,9% 59,1% 15,8% 17,4% 34,8% 11,2% 13,0% 46,4% 69,1% 9,8% 17,0% 15,9% 18,1% 39,3% Never Once or Twice an Year Quarterly Monthly At Least Weekly 0% Global Asia- Pacific (excl. Japan) Latin America Japan Middle East and Africa Europe North America 0% Global North America Asia- Pacific (excl. Japan) Japan Europe Latin America Middle East & Africa Source: Capgemini Financial Services Analysis, 2016; Global HNWI Insights Survey 2016, Capgemini; Capgemini and RBC Wealth Management Global HNW Insights Survey

20 Fintech players are making a dent in the Wealth Management universe International institutions have integrated digital solutions, but Fintechs are catching up Global Global Global Global Nordic Nordic Nordic Connect Inform Advise Invest investors with peers, and advisors decisions by analyzing massive amount of data on how to optimize investments in online self-service portfolios 20

21 Make or Buy Market Maneuvers by Global WM players Buy Make / Incubate Schroders, a large European asset manager, has backed Nutmeg, a British start-up Rolled out own automated wealth service, targeting people with as little as $5,000 in savings Goldman Sachs has created, incubated and spun-off several startups including Symphony (communication), Kensho (information analytics) and Marquee (risk management portal) JPMorgan Chase and Goldman Sachs have backed Motif, a startup that builds baskets of stocks based on investment themes Vanguard is launching its own lowcost advisory service 21

22 Way Forward

23 Change of business model to Fintech ecosystem, new advisory models, and digital should drive transformation High-Level Digital Prioritization Roadmap in Wealth Management Core/Strategic Focus Transformation Focus Shift the business mindset Develop ROI model / cross-enterprise support Develop big data opportunities Build vs. buy decisions Partner/ collaborate with FinTechs Engage wealth managers to test, improve, and launch programs Introduce new advisory models: Holistic, collaborative, personalized, hybrid Embrace digital, drive omni-channel as key strategic focus Additional Recommendation for 2016 Strategic Recommendation from WWR 2014 Transformation Recommendation from WWR 2014 Note: Steps do not necessarily need to be taken sequentially Source: Capgemini Financial Services Analysis, 2016; WWR Executive Interviews,

24 Questions

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