The report's findings suggest that there is zero room for complacency in the Asia-Pacific wealth industry, particularly as the demands for shrewd advice are likely to mount in challenging economic and market conditions.

A study based on hundreds of investors and advisors across Asia has found that fewer than half of clients are satisfied with their primary wealth manager and about the same number expect to consolidate assets with fewer or a single firm. The study, carried out by Accenture, suggests that Asian investors are becoming more demanding of advisors.

The Future of Asia Wealth Management report is based on two surveys – one of about 3,200 investors and another of more than 500 financial advisors at wealth management firms in Asia – as well as interviews with senior wealth executives. The countries covered in the report are China (mainland), China (Hong Kong SAR), India, Indonesia, Japan, Malaysia, Singapore and Thailand.

Investors are more interested in receiving advisory services from their wealth firm than a self-directed approach, where they make investment decisions themselves and use wealth firms just to execute their trades (40 per cent versus 33 per cent). 

“This desire for more financial advice could lead investors to move assets, with firms that have robust advice offerings more likely to become investors’ primary wealth manager and secure more assets under management,” authors of the report said. 

While most investors in Asia tend to work with multiple wealth firms, an individual’s primary manager holds, on average, twice the amount of assets under management as the next secondary manager (60 per cent versus 29 per cent). Four in 10 investors (41 per cent) who work with multiple wealth firms said they are likely to consolidate their assets with fewer or just a single firm in 2022.

Some 46 per cent of investors are satisfied with their primary wealth manager, even though nine in 10 (91 per cent) said that their investment expectations were met or exceeded last year.

“With market volatility increasing, the report suggests that delivering investment returns will be more challenging and that offering financial advice and meeting a broader range of investor goals will become important to improve client satisfaction. Investors who are satisfied with their advisory relationship hold, on average, six percentage points more of their assets under management with their primary wealth manager than those who are not satisfied,” the study said. 

“More advanced and accessible advisory services are key to unlocking wealth management growth opportunities in Asia,” David Wilson, who leads Accenture’s wealth management practice for growth markets, said. “Investors in the region can no longer be categorised primarily as self-directed; they want advice and to validate their decisions with their wealth manager. Delivering a true advisory proposition that is goals-led, holistic, and digital-first but integrated with financial advisors will be crucial for future competitiveness.”

The executive view
Wealth executives surveyed for the report have bold growth ambitions and expect their firms’ assets under management in Asia to nearly double and their revenues to grow 60 per cent by 2025. The potential to capture additional assets is significant, as investors in Asia hold, on average, nearly one-third (32 per cent) of their wealth in retail deposit accounts and physical cash.

Perhaps, inevitably, given the noise around environmental, social and governance (ESG)-themed investment, the survey found that this form of money management is “poised to take off." Some seven in 10 (70 per cent) of Asian investors have invested or plan to invest in products or assets related to ESG (environmental, social and governance) issues this year.

The top concerns that investors said wealth managers will need to address are the complexity of understanding ESG boundaries, insufficient data and information, and the limited selection of available ESG products – cited by 41 per cent, 40 per cent and 38 per cent of investor respondents, respectively.

The study also found that investors are interested in digital assets such as cryptocurrencies and bitcoin, but wealth managers are cautious about supporting them. Half (52 per cent) of investors in Asia already hold digital assets such as cryptocurrencies, tokenized assets, and crypto investment funds – and a further 21 per cent expect to invest in them by the end of 2022. Digital assets make up 7 per cent of surveyed investors’ portfolios – making it the fifth-largest asset class in Asia – more than they allocate to foreign currencies, commodities or collectibles. Yet two-thirds (67 per cent) of wealth management firms have no plans to offer digital assets. (The findings come at a time when digital assets’ prices have swung dramatically, causing some institutions to question the wisdom of investors making significant allocations to the area.

The report said that among the services that investors want but which most wealth managers aren’t currently focused on developing are: (1) giving clients more input in the financial advisor selection process; (2) leveraging open banking to enable wealth managers and third parties to share data; (3) developing wealth offerings that naturally evolve as clients enter different life stages; and (4) offering more personalised advice, including insight automation, which uses data and analytics to suggest the next-best investment ideas.

Digital technology is also vital for making advisors more productive. Advisors said they spend half of their time on non-revenue-generating activities, such as administration, checking trade status, and non-client meetings, using as many as four or five applications for each key activity. Nearly eight in 10 advisors (78 per cent) said that using a one-stop platform that brings all these different applications together into a single screen would help improve their efficiency. Research also suggests that this could boost advisor productivity three- to sevenfold over a three-year span.

The surveys were conducted in December 2021 and January 2022, with the interviews taking place in early 2022. Investor respondents worked with at least one wealth management firm and had investable assets ranging from at least $100,000 to more than $5 million.