HNWIs In Asia Have More Complex Needs; More Trusting Of Wealth Managers - RBC/Capgemini

Tom Burroughes

25 September 2013

High net worth individuals in the Asia-Pacific region – a market that has been a major driver of global wealth – trust their private bankers more, have more complex needs and prefer to work with several experts at one firm, a survey by Capgemini and RBC Wealth Management shows.

The report, which follows the organisations’ survey of global developments issued earlier this year, said that almost half – 45.4 per cent – of the world’s high net worth wealth growth has come from Asia-Pacific over the past five years (2007-2012), a trend that is expected to continue.

Asia-Pacific is poised to become the largest wealth market as early as 2014; Asia Pacific HNW individuals' wealth reached $12 trillion and is on track to hit $16 Trillion by 2015.

“With consistent wealth growth across Asia-Pacific markets, the region is poised to have the largest high net worth population by as early as 2014,” said George Lewis, group head, RBC Wealth Management & RBC Insurance. “This growth provides both opportunities and challenges for firms, who will need to cater their offerings to meet the diverse needs of clients in the region to remain competitive in a rapidly-evolving and increasingly complex industry,” Lewis said.

Different needs, desires

The report said the unique traits of the Asia-Pacific population of HNW individuals (excluding those in Japan) include higher trust and confidence in firms and wealth managers; more complex wealth management needs and preference to work with several experts at one firm.

Over three-quarters have high levels of trust in wealth management firms (78.8 per cent) and wealth managers (77.9 per cent) compared to two-thirds (66.8 per cent and 65.9 per cent) of HNWIs in the rest of the world. Japanese HNWIs, by contrast, had low levels of trust, with only about 30 per cent having confidence in various segments of the industry.

Asia-Pacific HNW individuals perceive their wealth management needs to be complex, encompassing business, family or philanthropy, with 41.1 per cent holding this view, compared to 21.2 per cent in the rest of the world. With regards to advice on family wealth, 47.2 per cent of Asia-Pacific HNWIs have this need while 23.3 per cent require personal wealth advice.

Such individuals prefer to work with multiple experts (40.1 per cent) at one firm, in contrast with those in other regions who prefer one point of contact (40.4 per cent versus 21.7 per cent who prefer multiple experts).

Nearly 40 (38.2) per cent rated digital as more important than direct wealth manager contact compared to 21.5 per cent of HNW individuals in the rest of the world.

Asia-Pacific HNW individuals say they are willing to pay more for services that go beyond standard wealth offerings (42.3 per cent compared to 25.5 per cent in the rest of the world).

Country differences

While there were different perspectives and behaviours expressed by Asia-Pacific individuals compared to those in the rest of the world, the region cannot be viewed as uniform, with varying views held by people across individual Asian markets as well. These differences are most clear when comparing HNWIs in Japan with those in China and India, the report said.

While HNW individuals in Japan expressed no strong preferences in terms of their wealth management servicing needs, people in China and India expressed clear opinions, with both countries having the highest proportion of HNW individuals who view their needs as complex and desire input from a number of experts.

This year’s report also includes a section that provides an in-depth focus on perspectives and behaviour based on a global survey, of over 4,400 HNW individuals, including almost 1,400 respondents from Asia-Pacific. The Global HNW Insight Survey was a collaboration between Capgemini, RBC Wealth Management and Scorpio Partnership.

For the purpose of the report, “Asia-Pacific” refers to those markets compared in the APWR section on regional diversity: Australia, China, India, Japan, Hong Kong, and Singapore. The term “rest of the world” refers to the 15 countries covered in the Global HNW Insights Survey 2013 except those in Asia-Pacific: Belgium, Brazil, Canada, France, Germany, Italy, Mexico, Netherlands, Russia, South Africa, Spain, Switzerland, UAE, UK, and US.