The wealth management industry needs to innovate

Jurgen Vanhoenacker

Jurgen Vanhoenacker

HNW millennials and women are renowned for their focus on sustainable investment and investing towards a purpose-led goal.

According to the Economist Intelligence Unit, 56 per cent of HNW women in the UK think the ability to create change through impact investing is becoming more important in defining wealth. This is compared to just 38 per cent of HNW men.

To keep pace with the changing demands of this growing demographic, wealth advisers will need to be able to offer the full array of options and opportunities that ESG (Environmental, Social and Governance) and impact investing represent.

Failing to meet their needs risks losing the next generation of wealthy individuals to competitors or other investment channels.

Another dramatic change in the mosaic of modern wealth is the rise of globally mobile citizens.

The much-venerated Knight Frank Wealth Report this year told us that 26 per cent of UHNWIs are planning on emigrating in the next year, while 36 per cent already hold a second passport.

It is now common for wealthy individuals to hold business interests in one region, while they live in another and their children go to school in a third country.

For advisers, managing their clients’ wealth across multiple jurisdictions is highly complicated from a tax and regulatory perspective, and this is just one element of the challenges facing globally mobile clients.

Ensuring that family members, no matter where they are in the world, are given the highest standards of assurance and protection is also an essential component of what wealthy individuals expect from their advisers.

Further, as the global political and financial framework continues to be rewired, advisers will also need the expertise to advise how the regulatory landscape might be shifting and how their globally mobile clients might be affected.

In order to maintain trust and to offer the most efficient solutions, wealth managers must invest in regional expertise on a global scale.

Innovation in this context is investing in the right types of expertise, language skills and cultural understanding; it is innovation in client services.

This investment is crucial to fully understanding the factors that are encouraging wealthy individuals to emigrate, and in order to advise clients on the most appropriate wealth solutions available to them.

Innovation must be a continuous process.

The clients we serve will continue to change, as will their needs and aspirations.

As Generation Z starts to build their entrepreneurial legacy, we will need to ask ourselves, what will their investment priorities be?

What services and advisory experience will the new wave of HNWI women expect?

How will the opportunities and challenges represented by globalisation and political uncertainty motivate our international clients in years to come?