How do you build value when clients want more than wealth? - 2019 Global Wealth Management
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How do you build value when clients want more than wealth? 2019 Global Wealth Management Research Report
Contents Introduction 3 Turning client switching into an opportunity 4 Delivering high-value solutions 13 The evolution of digital advice 21 Aligning pricing with value 27 Contacts 35 2 | 2019 Global Wealth Management Research Report
Wealth management is in high demand, yet clients are
not fully engaged or loyal. Now is the time to redefine the
value of wealth management.
Across industries, consumers around the world have changed where they shop, how they discover
products and what they ultimately buy, thanks to new technologies, innovative business models and
disruptive brands.
The wealth management industry is acutely experiencing these trends, presenting many challenges —
and opportunities — to a wide array of service providers: from firms with rich legacies to innovative new
entrants who are out to change the very definition of the industry.
An increasing number of clients are willing to pay for financial advice, but what they value is evolving
rapidly. To help providers understand how best to deliver value, we surveyed 2,000 wealth management
clients across 26 countries to understand what matters most to them. We believe the following are the
five most important areas for firms to address:
• Know what clients want and when. Clients are switching providers to capture better value. They see the
highest overall value for financial advice during major life events and as their wealth and level of investment
knowledge increases.
• The wealthiest and youngest are most apt to switch. Overall, one-third of clients plan to move over
the next three years. In their search for value, clients are forming relationships with multiple providers.
Independents and FinTechs benefit the most.
• Solutions are more important than products and services. Clients want more advice and planning, but
many are holding back. Most clients want simple, personalized and connected solutions over individual
products and services.
• The future is voice. Client preferences are rapidly evolving toward digital and voice-enabled assistants for
managing wealth and receiving financial advice.
• Pricing models need to change. Many clients do not trust that they are charged fairly by their provider, and
a majority want to pay differently.
Wealth management providers must make the necessary changes to retain their current clients and win
new ones. A clear opportunity exists to make financial advice more effective and impactful by better
aligning to what clients truly value.
We invite you to read our findings and visit ey.com/wealth2019 to learn more.
Nalika Nanayakkara Phil Hennessey
EY Wealth & Asset Management EY Wealth & Asset Management
Americas Advisory Leader Advisory Senior Manager
2019 EY Global Wealth Management Research Report | 3
Chapter 1 Turning client switching into an opportunity One-third of clients plan to switch wealth management providers over the next three years. Firms need to act now to retain and attract clients. 4 | 2019 Global Wealth Management Research
Shifting client demographics and They are switching for value — most Firms face increased pressure to
preferences, as well as a flood of new often at critical life moments and as the demonstrate value to younger
digital offerings, are driving clients around complexity of their financial lives evolves. generations, who represent the future
the world to reconsider their wealth Firms who can best create this value will of their businesses. Though wealth
management relationships. be best positioned to retain their current levels generally increase with age, the
clients and acquire competitors’ clients proportion of clients planning to switch
According to our recent global research
who are planning to move. decreases with age: boomers are 29% less
study of wealth management clients, one-
likely to switch than millennials.
third of clients have switched providers
or moved assets in the past three years
Who is switching? Wealth management providers have
and another third plan to do so in the Our research shows that the wealthier an opportunity to build trust and
next three years. These shifts are clients are the most likely to change their demonstrate the value of their services
happening across client wealth levels and financial relationships: 39% of ultra-high- by providing education through thought
demographic profiles. net-worth (UHNW) clients say they plan leadership and financial coaching. Our
to switch or move money from a wealth research found that clients who self-
Clients are identifying specific providers
management provider in the next three identify as having high investment
to fill certain needs, resulting in an
years, compared with just over one- knowledge are significantly less likely
increased number of financial provider
quarter of high-net-worth (HNW) and just to switch over the next three years
relationships. On average clients maintain
under a third of mass affluent clients. compared with those with low investment
relationships with five different types of
This is expected, as UHNW clients are knowledge (only 19% of clients with high
providers, leading to a greater number
most likely to diversify their assets investment knowledge plan to switch,
of individual firm relationships and
among a greater number of wealth compared with 36% of clients with low
increasing complexity for the client.
management providers. investment knowledge).
2019 Global Wealth Management Research | 5
Turning client switching into an opportunity
Shifting focus Banking and wealth relationships in The intensified competition among
Asia-Pacific are in a period of change, incumbents and new entrants presents
The desire to move assets is varied
particularly in China, where new, clients with a multitude of options
across regions. Encouraging results in the
emerging digital methods and habits are for wealth management providers,
Americas and Europe show fewer clients
being driven by fresh digital solutions. The heightening the pressure on firms to
planning to switch providers in the next
percentage of clients expecting to transfer continuously raise the bar for satisfying
three years than have done so over the
assets is expected to more than double in client demands.
last three.
this region, from 15% over the last three
years to 34% in the next three.
6 | 2019 EY Global Wealth Management Research Report
Why clients are switching The client-provider relationship consists Those with more “in-depth knowledge”
of an array of dimensions, ranging from and awareness are more than twice as
Moving money happens most often
activities with tangible value (measured likely to realize the high value wealth
during major personal transitions, with
by quantifiable returns or performance) to managers provide than those with low
approximately half of clients changing
the intangible (activities such as planning knowledge, with three out of five clients
providers over the past three years
and coaching, whose effects can be more self-identifying as having high investment
during such life events. The increasing
difficult to measure). We found that knowledge seeing such value. There is
digitalization of wealth management
clients broadly assign value across these much incentive to educating clients on
activities and the rise of self-service
dimensions evenly. Essentially, clients the value of financial advice to achieve
offerings have made clients more
want everything and prefer not to make greater retention — just 20% of clients
empowered and willing to switch providers
trade-offs. with “in-depth knowledge” would consider
or shift assets for value.
moving their assets elsewhere in the next
However, there are nuances based on
To better understand what value clients three years, compared with 40% of clients
different demographic and psychographic
are switching for, we asked them to with low levels of investment knowledge.
factors. Our research indicates that the
identify the most valuable components
clients who typically see the highest
of the wealth management relationship
value are the wealthiest individuals, as
across six key service attributes: quality,
well as those with more knowledge and
pricing, products, technology, personal
understanding of their finances.
attention and advice.
2019 EY Global Wealth Management Research Report | 7
Turning client switching into an opportunity 8 | 2019 EY Global Wealth Management Research Report
Where clients are going which was largely consistent across While traditional wealth institutions
regions. In looking out over the next three — including commercial banks, asset
Often client needs are not met by a
years, clients indicate maintaining this management firms, online trading
single provider: our research indicates
same number of relationships, suggesting platforms and private banks — will
that clients currently use on average five
that wealth managers are not yet remain a prevailing market force, our
different types of wealth management
providing the breadth of solutions needed findings show their use by clients may
providers (not including multiple
to drive asset consolidation. start to peak.
relationships with the same provider),
Accelerating growth of Historically, the wealthiest clients have based on what their clients value, as well
independents made greater use of the independent as how they charge their clients. Many
advisory channel; however, the expected major wealth management firms have
The use of independent financial advisors growth over the next three years will be introduced new independent channels
is expected to rise rapidly, with an 18% highest in the mass affluent (34% today to or are considering creating a new
increase in clients globally who expect 42% expecting to use) and HNW segments independent distribution channel to stem
to use independent advisors in the next (34% today to 40% expecting to use). the tide of their financial advisors going
three years, and a 14% increase for independent.
independent advisory firms — fueled by Unconstrained by the terms set by large
above average growth in Asia-Pacific. brokerages, independent advisors may
have more flexibility to adapt solutions
2019 EY Global Wealth Management Research Report | 9
Turning client switching into an opportunity
Growth in FinTechs expected among mass affluent clients While younger clients will remain the
(28% today to 38% expecting to use) and stronger users of digital solutions,
FinTechs (including robo advice and
41% growth among HNW clients (29% expected growth is highest among
personal financial management tools)
today to 41% expecting to use). boomers. Gen X clients are the most likely
will also see an inflow of clients, even
to use FinTechs, and even more expect to
though the asset flow may not be as large No single FinTech has been able to acquire
use the offerings in the future.
as for independents. Although these a large enough client base to threaten
new entrants still have relatively low the incumbent dominance yet — though These switching trends present both
amounts of assets under management, total clients are growing, they still do not threats and opportunities for incumbents
the percentage of clients using FinTechs typically commit significant assets. The and disruptors, with independents and
is on a par with usage of long-established FinTech playbook has typically been to FinTechs poised to gain the most. To
wealth institutions, such as universal acquire clients with a niche offering, then stem this tide and retain the most
banks, independent wealth advisors and expand to broader bundles and solutions profitable and highest potential clients,
mutual fund companies. once they own a critical mass of clients. traditional wealth institutions need to
However, this strategy will bring FinTechs not only deliver on the dimensions their
The percentage of clients expecting to
closer and closer to incumbents as their clients value (particularly at critical life
use FinTech solutions will increase from
offerings mature and they partner with events), but also clearly communicate the
38% today to 45% in the next three years.
traditional wealth management firms or value delivered.
Expected FinTech use over the next three
established technology players.
years is expected to increase with each
client wealth segment, with 35% growth
10 | 2019 EY Global Wealth Management Research Report2019 EY Global Wealth Management Research Report | 11
12 | 2019 EY Global Wealth Management Research Report
Chapter 2
Delivering high-value
solutions
A successful wealth
management offering is
more than a shop window for
products and services.
2019 EY Global Wealth Management Research Report | 13Delivering high-value solutions
As individuals have increasingly gained and react to their complex changing Capturing clients on the
more control over their financial lives in circumstances, the fragmented nature of sidelines
the last generation, they have turned to these relationships makes it difficult for
a diverse and complex mix of providers providers to address them. Further, most Wealth management clients
to help them manage this increased clients do not engage in the planning overwhelmingly want advice and
responsibility. or advisory activities necessary to build planning. Our research finds over 80%
robust client profiles to make these of clients express interest in financial
Wealth management clients are going advice and planning, yet half remain on
solutions effective.
to an average of five different types of the sidelines. These idle clients present
providers to address their needs, often What can firms do to better engage clients a huge untapped opportunity for the
turning to niche providers to solve specific in ways that solve problems, while still industry: the providers who can engage
problems. While clients tend to want meeting the needs of clients demanding them can lead the way in reshaping how
solutions that both anticipate individual products and services? wealth management is delivered to satisfy
complex personal needs.
14 | 2019 EY Global Wealth Management Research ReportClients are often hesitant to engage management of their finances, as well as expenses can be a significant step to
because of fragmented products and support in achieving the level of financial improving a client’s financial well-being —
services, and complicated fee structures. independence that enables their broader and can serve as a conversation starter to
But more fundamentally, these services life aspirations. other financial needs.
often simply do not address a client’s full
Budgeting and savings are critical Beyond the everyday and specific
set of financial needs.
opportunities to engage clients in objectives, clients aspire to reach a
Advice and planning services today more conversations about their everyday level of independence where their
frequently focus on specific goals and financial management, which is often money empowers them — whether it
objectives. Goals-based solutions have overlooked: just 28% of clients discuss helps to remove worry or achieve a
come a long way in helping to frame a saving to meet goals with their wealth greater purpose. Wealth management
client’s objectives in actionable terms, manager. While tools have emerged providers that can identify and enable
tied to metrics that can measure progress to nudge clients to save and increase these outcomes can create deeper bonds
and success. But working toward these automatic contributions, many clients with their clients through guidance and
goals — whether for college, retirement struggle to understand how much coaching.
or estate planning — represents only a and when to save. Providing clear and
part of someone’s financial life. Clients constructive savings advice based on
need greater help with the day-to-day a deeper understanding of income and
2019 EY Global Wealth Management Research Report | 15How to deliver high-value solutions
The best opportunities to engage clients changes, such as a new job or divorce. address life events more holistically.
in conversations about these topics arise Wealth managers need to better harness Beyond providing specific products to
during major life events. Our research the power of social media to proactively respond to a new need, innovative firms
shows the highest use of advice and engage clients and become a trusted are better integrating these events into
planning during these moments (which, advisor during these life-changing events. client profiles that are recalibrated around
as chapter 1 discussed, are also the the changing circumstances. They then
A third of wealth management firms
moments when clients are most likely can anticipate additional needs earlier and
we interviewed are moving beyond
to switch or move money). Clients often proactively address them.
traditional profiling and are working
leave breadcrumbs on social media
to build more robust frameworks that
when they are anticipating major life
16 | 2019 EY Global Wealth Management Research ReportProviding solutions while investment knowledge and risk attitudes, knowledge, with three out of five clients
meeting product desires despite, as chapter 1 revealed, these self-identifying as having high investment
clients are less likely to switch overall. knowledge seeing such value. There is
While many clients seek solutions agnostic much incentive to educating clients on
of specific products, there are some client Our research indicates that the clients
the value of financial advice to achieve
segments who value access to a breadth who typically see the highest value are
greater retention — just 20% of clients
of products — and are willing to move the wealthiest individuals, as well as those
with “in-depth knowledge” would consider
money for them. with more knowledge and understanding
moving their assets elsewhere in the next
of their finances.
One in five clients is willing to switch three years, compared with 40% of clients
for greater availability and access to Those with more “in-depth knowledge” with low levels of investment knowledge.
products. This likelihood of switching and awareness are more than twice as
specifically for products increases likely to realize the high value wealth
significantly with wealth, level of managers provide than those with low
2019 EY Global Wealth Management Research Report | 17Delivering high-value solutions
Perception of value for investment Experimenting with different products clients is more challenging because of
products varied most based on a client’s is one driver for clients engaging with potential conflicts of interest, regulatory
level of investment knowledge: four out an average of five different types of hurdles and minimum investment
of five clients who self-identify as having providers. For example, millennials may requirements.
very high investment knowledge see have a checking account with one firm
Educating and empowering the clients
high value in products. Similarly, client that offers no fees, a savings account at
who are demonstrating interest in
perception of value for products increases another firm with high yields, a brokerage
specific products is a key factor in building
based on the level of investable assets, as with an online provider, a retirement
greater trust, as well as to introducing
clients with greater wealth tend to seek account at a full-service institution and a
broader discussions about their goals and
access to more exclusive products that micro-investing service with a FinTech.
desired outcomes.
meet complex needs.
The key challenge for wealth management
Clients with the highest tolerance for risk providers is determining how to balance
see greater value over more conservative this interest in a diverse set of products
and moderate clients, which may result with their clients’ best interests and risk
from an openness to try a breadth of appetite, as well as the costs of providing
products — including less traditional ones access. On the investing side, offering
— to achieve greater results. more sophisticated options to mainstream
18 | 2019 EY Global Wealth Management Research ReportAchieving clear outcomes for adequately tied to financial planning; and focus on turning their individual products
clients advisor platform functionality is largely and services into the right solutions to
lagging client demand for holistic advice. meet these needs.
While there is clear demand from specific
segments for product breadth and choice, Significant advancements in managing Wealth management providers are
most clients in our research want advice personal data and the improved quality working with product manufacturers
and planning that is timely and built on an of technology-driven interactions are and technology companies to create the
aggregate understanding of their personal helping but can only go so far with limited platforms to enable this. Newer platforms
financial lives. The future of wealth information. are shifting from products to solution
management will be focused on such delivery by integrating activities focused
Platforms that connect data and
solutions that are proactive, personalized on outcomes for clients.
aggregate accounts across providers are
and intuitive to use. a critical first step. Firms are investing By better combining such capabilities,
The challenges for firms wanting to excel in an array of digital tools for advisors to leading providers can ultimately make
in this space are significant: fragmented turn data into richer conversations with it easier for their advisors and
service models and platforms often clients. But data alone cannot solve this technologies to deliver clear value
stand in the way; providers struggle to problem: providers must engage clients in to clients who are ready for the next
enable and incentivize planning activities, discussions that build complete pictures generation of financial advice.
as advisor compensation is often not of their life goals and aspirations, then
2019 EY Global Wealth Management Research Report | 1920 | 2019 EY Global Wealth Management Research Report
Chapter 3
The evolution of
digital advice
Voice-enabled tools and digital
assistants are the channels that
will take us into the future.
2019 EY Global Wealth Management Research Report | 21The evolution of digital advice
The velocity of digital innovation in wealth The pace of change should not be In 2016, clients vastly underestimated
management is causing unexpected underestimated, as the move to new how quickly their preference for mobile
shifts in client engagement, with client technologies is happening faster than applications would grow over other
preferences for smart mobile apps already most wealth management firms and their methods of engagement. On average,
eclipsing traditional channels. Meanwhile, clients had previously predicted. 18% of clients preferred mobile apps
an accelerating preference for digital across wealth management activities and
and voice-enabled assistants is quickly Keeping pace with digital 24% projected to prefer apps in two to
taking hold. change three years. The actual preference today
is over double that: mobile apps are now
Clients are beginning to demand Digital technology is evolving faster than the preferred channel for 41% of clients
technologies that can listen, learn, process wealth management companies — and for engaging with wealth management
complex language and anticipate needs — even their clients — can anticipate. firms, followed by websites, face-to-face
not just for basic, transactional activities, A comparison of results from our most interactions and phone calls.
but also to manage wealth and receive recent global research study of wealth
financial advice. The ongoing challenge management clients and our 2016
for wealth management firms is how to survey highlights how challenging it is for
balance such evolving high-tech solutions wealth managers to accurately predict
with “high-touch” advisory services future changes.
that offer clients the seamless and
personalized experience they demand.
22 | 2019 EY Global Wealth Management Research ReportFurthermore, clients are now preferring websites as a primary channel have link clients to human advisors. They can
apps for a wider variety of wealth declined dramatically — by about a third. also support advisors in becoming
management activities. Nearly two-thirds more efficient in their daily activities,
prefer apps for executing transactions, Chatbots are emerging as a enabling them to spend more time with
while just over half prefer them for other preferred channel for financial their clients.
basic tasks, such as monitoring and
advice While only 1.4% of clients prefer to use
analyzing results and opening accounts.
digital and voice-enabled assistants as
They are also starting to prefer apps With many mobile technologies now
a primary channel today, 9% of clients
for more advanced activities, such as commonplace, wealth management
say they would prefer this channel in the
portfolio rebalancing and receiving providers looking to differentiate must
near future. This trajectory indicates a
financial advice. move quickly to capitalize on the next
considerable swing in momentum — but
wave of client engagement: digital and
With clients gravitating toward mobile, these numbers may be significantly
voice-enabled assistants.
the preference for first-generation digital underestimating growth potential, just
channels such as websites has steadily These assistants, commonly known as as mobile app growth potential was
declined since 2016, contrary to what chatbots, can offer a more personalized underestimated in 2016.
clients had predicted. At the time, 38% of and user-friendly experience than mobile
clients preferred websites as a primary apps. With their use of natural language
channel across wealth management processing and ever-advancing machine
activities, with the same percentage learning capabilities, chatbots can answer
believing they would prefer them in questions, monitor transactions, place
the future. Less than three years later, orders, perform screening functions and
2019 EY Global Wealth Management Research Report | 23The evolution of digital advice
Most interestingly, the future demand for for the mass market and mass affluent voice, they need to pay close attention to
these technologies is not restricted to segments only. Our research showed no where clients will be in the next few years.
basic, repeatable activities. Our research discernable difference by age, indicating This may mean reallocating budgets from
shows that the preference for chatbots an openness across generations to these websites to voice-enabled tools sooner
is greatest when seeking financial advice new technologies. rather than later.
(18%) and learning about products and
Given these trends, incumbent wealth
services (11%), as opposed to making
managers must take a fresh look at
transactions (2.5%).
how they will interact with clients in the
These preferences increase with the coming years — from conference rooms
level of investable assets, countering a to living rooms. As firms prioritize their
common perception that automated, digital investments among multiple
low-cost services should be reserved channels such as mobile, website and
24 | 2019 EY Global Wealth Management Research ReportBlending high-tech with The demand for human interaction allowing organizations to serve clients in
“high-touch” is steeper for some types of clients — innovative ways. It also allows providers
particularly those with more complex to reimagine the client relationship,
Despite rapid demand for digital financial situations or conservative risk with possibilities to leverage newer
engagement, wealth managers must attitudes. Risk-averse clients show a technologies, such as natural language
continue to balance building scalable, much stronger preference for face-to-face processing and artificial intelligence
automated solutions with human communication than those who are more at the heart of an evolving set of
interactions for those clients that desire risk-tolerant (23% vs. 7%). interactions. When digital engagement
the human touch. becomes commonplace, integrating high
To enable high-touch service, firms
One-quarter of clients currently prefer tech with high touch will become a true
must harness technology to improve the
face-to-face interactions or phone calls differentiator in wealth management.
productivity and quality of engagement
as their primary method of engagement; from their own employees. Those who can
even more clients do so for receiving eliminate mundane, repetitive tasks can
financial advice (42%). High-touch free up time for their financial advisors
engagement is especially desired to focus on providing highly personalized
during periods of personal change or client service.
significant market turmoil, when clients
are looking for a trustworthy advisor to These trends point to exciting
soothe nerves. opportunities for wealth managers,
2019 EY Global Wealth Management Research Report | 2526 | 2019 EY Global Wealth Management Research Report
Chapter 4
Aligning pricing
with value
Firms must recalibrate their
pricing models and do a better
job of communicating their
value to clients.
2019 EY Global Wealth Management Research Report | 27Aligning pricing with value
Nearly half of discretionary wealth but rather a combination of increasing that can rise with wealth levels without a
management clients are dissatisfied transparency and predictability, as well as proportionate change in service.
with the fees they pay and do not trust improving how the value of their offerings
Despite this dissatisfaction, discretionary
that they are being charged fairly. This and services is communicated to clients.
management clients overwhelmingly
dissatisfaction stems from a combination
seem resigned to an expectation that their
of uncertainty about what they are paying Many clients do not think they fees will remain the same or increase — for
for and discontent with how they are are charged fairly now. Only a small share (7%) expect them
paying. There is growing concern among
Forty-five percent of clients do not trust to decrease, and many of those anticipate
clients that fees based on assets under
their wealth manager or advisor to charge paying less because of a reduction in
management are not fair.
them fairly. The client segments that are service levels or a shift in assets to lower-
Wealth management providers cannot most profitable today and most promising cost wealth management providers.
ignore this sentiment, as our research for tomorrow are unfortunately the ones The emergence of less expensive
shows that pricing transparency and that are most dissatisfied. Satisfaction alternatives, such as FinTech and passive
competitive fees are two of the top is lowest among the youngest clients investment options, is causing clients to
five most important factors for clients (who regularly comparison shop online) question fees at a growing rate. This trend
when evaluating and selecting wealth and among more knowledgeable clients is most pronounced among younger and
managers. (who have a better understanding of the more knowledgeable individuals: 6 out
Firms have work to do to prove that their nuances of pricing). Wealthier clients of 10 millennials and 8 out of 10 clients
services are worth the fees they charge. are also more troubled about pricing, with very high investment knowledge
The answer is not simply lowering fees, particularly regarding asset-based fees expressed this sentiment.
28 | 2019 EY Global Wealth Management Research Report2019 EY Global Wealth Management Research Report | 29
30 | 2019 EY Global Wealth Management Research Report
Clients want more clarity and goal, advisors can show clearly how they But improving transparency cannot
simplicity are assisting with tangible outcomes in come at the cost of simplicity. Complex
the future. Going beyond just investment performance fee structures for funds have
The lack of perceived value and fairness selection and assisting clients with struggled to take hold. Recently, multiple
in the wealth management relationship budgeting or estate planning also exhibits large asset managers released funds that
is compounded by low awareness and value that is more difficult to obtain from link fees to performance in response to
understanding of wealth management automated or self-service platforms. investor demand for value-based pricing,
fees. Our research shows that only 56% but the asset flows into the funds have
of clients say they fully understand the As chapter 2 discussed, fragmented
been disappointing. Although the funds
fees they pay. Fee awareness is lowest for products and services and complicated
sought to provide more transparency
older clients and for clients with low levels fee structures can deter clients from
and fairness to clients, the operational
of wealth or investment knowledge. engaging with planning and advisory
challenges with distributing products with
services they might otherwise want.
Wealth management executives realize more complex and unpredictable fees
This is why clearly communicating
that clients expect more than just strong caused uncertainty.
services and associated fees is crucial to
investment performance. In conversations demonstrating the benefits provided, as
with executives from top global wealth well as addressing expanded regulatory
management firms, we found they are rules for greater disclosure. In addition to
focused on demonstrating value by making disclosures as understandable and
providing exceptional client experience, coherent as possible, firms can educate
goals-based solutions and financial clients about fee structures, advisor
coaching. By tracking and displaying a compensation and incentives through
client’s investment progress toward a videos or app notifications.
2019 EY Global Wealth Management Research Report | 31Aligning pricing with value
Demanding alternative pricing Dissatisfaction with payment methods Percentage of assets under management
models increases with wealth levels, where is currently the most common payment
percent-of-asset pricing models can method, but fixed fee and per hour of
Although greater disclosure and amplify the size of fees. Younger clients support methods are most desired.
simplification are important, for many also have a greater desire for change as Wealthier and more knowledgeable
clients it may not be enough. Most they are accustomed to clear, simple and clients show a higher preference for fixed
wealth management clients want to pay predictable purchase terms for everything fees, which help clients lock in costs and
their wealth managers using a different from taxi rides to lending products: 6 out establish greater objectivity.
payment method — often one that of 10 millennials indicate a desire for a
offers more transparency, objectivity different type of payment method than
and certainty. they are currently using.
32 | 2019 EY Global Wealth Management Research ReportForward-looking firms are already working Independent advisors, who are not tied Balancing the economics and increasing
to develop fee structures that offer clients to fee structures mandated by large efficiencies through technology will be
more options and certainty. In addition firms, are generally best equipped to critical to preventing margin erosion.
to fixed and hourly fees, alternative offer personalization. They can select the By implementing new automation
models include pay-as-you-go and fee-for- payment method that works best for their technologies and pooled resource
service, where clients only pay for what clients and themselves, without having models, firms can provide increased
they receive. to apply discounts or explain certain value to specific client segments without
service fees. raising costs.
Some firms see opportunities to offer
subscription-based models to clients A key consideration when implementing
for access to certain services — a trend alternative fee structures are the
seen in other industries such as video operational impacts. For some firms —
streaming and food delivery. Another especially smaller, independent providers
theme we heard from executives was — offering variety comes with greater
a trend toward unbundling fees for back-office processing challenges.
investment products and advice. By Enabling fee variety for different services
splitting fees more discretely, firms are requires a cohesive billing platform that
experimenting with creating clearer clearly prices and charges for distinct
delineations between receiving value services in a coordinated way, and that
from investment returns vs. personalized does not create confusion for clients.
financial planning and advice.
2019 EY Global Wealth Management Research Report | 33Methodology
2019 Global Wealth Management Research methodology
In the third quarter of 2018, we worked with ESI ThoughtLab to conduct a
comprehensive survey of 2,000 clients in 26 countries to understand their changing
investment needs, behaviors and value perceptions.
We profiled clients not just by traditional segments, such as age, gender, wealth and
location, but also by level of education, profession, investment knowledge, risk appetite
and psychographic profile.
We also asked respondents to rate their knowledge in managing their finances and
divided them into low, average, high and very high categories depending on their
knowledge of common and complex financial products.
To understand client movement in the wealth management industry for this article,
we asked respondents whether they had switched or moved money from a wealth
management firm over the past three years or plan to do so over the next three years.
We also conducted interviews with executives at leading wealth management firms
around the world to understand how they are rethinking their value propositions and
business strategies.
Levels of investible assets
Mass affluent: US$250,000 to US$999,999
High net worth (HNW): US$1m to US$4.9m
Very high net worth (VHNW): US$5m to US$29.9m
Ultra-high net worth (UHNW): US$30m to US$100m
Age categories
Millennial: born 1981–97 (age 21–37)
Gen X: born 1965–80 (age 38–53)
Boomer: born 1946–64 (age 54–72)
34 | 2019 EY Global Wealth Management Research ReportContacts
Global EMEIA
Alex Birkin Keith MacDonald
EY Wealth & Asset Management Global EY Wealth Management
Advisory Leader UK Leader
abirkin@uk.ey.com kmacdonald@uk.ey.com
+44 20 7951 1751 +44 20 795 14114
Nalika Nanayakkara Olivier Maréchal
EY Wealth & Asset Management EY Wealth & Asset Management
Americas Advisory Leader Luxembourg Advisory Leader
nalika.nanayakkara@ey.com olivier.marechal@lu.ey.com
212 773 1097 +352 42 124 8948
Bruno Patusi
Americas EY Wealth & Asset Management
Switzerland Leader
Sinisa Babcic
bruno.patusi@ch.ey.com
EY Wealth & Asset Management
+41 58 286 4690
Advisory Senior Manager
sinisa.babcic@ey.com
212 773 3412
Asia-Pacific
Phil Hennessey Boudewijn Chalmers Hoynck van
EY Wealth & Asset Management Papendrecht
Advisory Senior Manager EY Wealth & Asset Management
phil.hennessey@ey.com Advisory Director
212 773 5307 boudewijn.chalmers@au.ey.com
+61 499 400 440
Rohit Kumar
EY Wealth & Asset Management Elliott Shadforth
Advisory Principal EY Wealth & Asset Management
rohit.kumar@in.ey.com Asia-Pacific Leader
212 773 8070 elliott.shadforth@hk.ey.com
+852 28469083
Charles Smith
EY Wealth & Asset Management Mark Wightman
Acknowledgments Advisory Executive Director EY Wealth & Asset Management
Special thanks go to the following charles.smith@ey.com Asia-Pacific Advisory Leader
colleagues for their contributions to 201 551 5072 mark.wightman@sg.ey.com
this report: Hubert Brown, Julianne +65 6309 8245
Grillo, Erin Kane, Elizabeth Kiefer,
Katherine Kurelja.
2019 EY Global Wealth Management Research Report | 35EY | Assurance | Tax | Transactions | Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data and a description of the rights individuals have under data protection legislation are available via ey.com/privacy. For more information about our organization, please visit ey.com About EY Wealth & Asset Management In our wealth and asset management work today, not everything is innovation; a lot of it is evolution. And it’s important to know the difference. FinTech disruptors continue to shift the rules, newer investors aren’t flocking to older channels and cost pressure is relentless. From data and AI, to tech platforms and partners, the questions have never been bigger, and the stakes have never been higher. We help clients re-think everything from pricing and operating models to coopetition and convergence. We bring critical questions into focus, which lead to bolder strategies, simplified operations and sustainable growth. Our sharp understanding of the state of play allows us to shift discussion from reacting to change, to helping shape it. Ultimately, we work with clients not just to stay competitive, but to change investing for the better. To learn more, visit ey.com/wealtham. © 2019 EYGM Limited. All Rights Reserved. EYG no. 002025-19Gbl 1904-3117000 ED None This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice.
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