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June 22, 2021updated 12 Jan 2022 1:27pm

Competition for tech-savvy advisers is heating up as wealth management digitises amid COVID-19

By Patrick Brusnahan

More so than in other segments of the financial services sector, retention and training of frontline staff is becoming an increasingly big challenge for wealth management as the effects of COVID-19 lead to permanent changes in the behaviour of firms and investors.

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Analyze opportunies within the wealth management market in APAC

GlobalData’s ‘Asia-Pacific Wealth Management: Market Sizing and Opportunities to 2026’ report provides a comprehensive overview of the Asia-Pacific (APAC) wealth management market.
  • The report analyzes the APAC wealth and retail savings and investments markets. This includes affluent market size, both by number of individuals and the value of their liquid assets.
  • The affluent population grew by 5.3% in 2021 and is expected to grow at an AAGR of 4.8% between 2022 and 2026.
  • The value of liquid assets held by the affluent segment surged by 8.4% in 2021, backed by economic recovery. HNW individuals’ financial wealth grew by 12%, while mass affluent individuals’ wealth grew by 6.0%.
  • The report provides an analysis of factors driving liquid asset growth. It is also split into asset classes - equities, mutual funds, deposits, and bonds.
  • The affluent population are more risk-tolerant and invest a significant proportion of their investments in risky assets such as equities, compared to emerging affluent and mass market individuals.
The report also provides data and insights on the size of offshore holding of HNW investors in the APAC region.
by GlobalData
Enter your details here to receive your free Report.

Throughout the pandemic, GlobalData has been polling financial services executives regarding the impact on their firms and lines of business. Questioned about the biggest wealth management operational challenge during the COVID-19 crisis, 46.7% of those engaged in the private banking space stated that retraining staff was their main concern. This compares to 22.9% in the cards and payments industry and 32.1% in the retail banking space according to our Q2 2021 Financial Services Industry Poll.

This challenge is not a new one, but it has been exacerbated by COVID-19. Matching the profile of the average HNW demographic, financial advisers in the private banking space tend to be in the later years of their career, with many falling into the above 50 age bracket. As a result, uptake of digital technologies remains lower than in other sectors. Indeed, our previous surveying of the market shows that almost half of wealth managers globally are concerned about the lack of digital skills among advisers.

With remote working and investment practices on the rise as a direct result of the pandemic, this has further contributed to this challenge, and we are seeing heightened competition for advisers who not only are suited for the private banking market but also digitally savvy. This makes the retention of staff with strong digital skills a key concern for wealth managers.

Data from our 2020 Global Wealth Managers Survey shows that 40.6% of wealth managers regarded the retention of their current adviser base as a threat to business growth in 2019. By 2020 – at the onset of COVID-19 – this proportion had risen to 53.6%, meaning competition for digital-savvy advisers will have increased even further.

With adviser churn rates on the rise, in addition to training, retention management must become more of a focus – not only to prevent knowledge loss but also customer churn. Given the importance of personal relationships between advisers and investors in private banking, HNW clients are likely to move on with their adviser should the latter decide to leave. This poses a significant challenge in an already competitive market. Loyalty strategies cannot solely be focused on the client. It is time to think about perks that both attract quality staff and increase employee retention. Complimentary employee Hootsuite webinars and yoga classes anyone?

wealth management covid-19

Free Report
img

Analyze opportunies within the wealth management market in APAC

GlobalData’s ‘Asia-Pacific Wealth Management: Market Sizing and Opportunities to 2026’ report provides a comprehensive overview of the Asia-Pacific (APAC) wealth management market.
  • The report analyzes the APAC wealth and retail savings and investments markets. This includes affluent market size, both by number of individuals and the value of their liquid assets.
  • The affluent population grew by 5.3% in 2021 and is expected to grow at an AAGR of 4.8% between 2022 and 2026.
  • The value of liquid assets held by the affluent segment surged by 8.4% in 2021, backed by economic recovery. HNW individuals’ financial wealth grew by 12%, while mass affluent individuals’ wealth grew by 6.0%.
  • The report provides an analysis of factors driving liquid asset growth. It is also split into asset classes - equities, mutual funds, deposits, and bonds.
  • The affluent population are more risk-tolerant and invest a significant proportion of their investments in risky assets such as equities, compared to emerging affluent and mass market individuals.
The report also provides data and insights on the size of offshore holding of HNW investors in the APAC region.
by GlobalData
Enter your details here to receive your free Report.

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