Growing numbers of ‘super rich’ will need generalist advice
Australia's growing number of ultra-high net worth individuals (UHNWIs) will require financial advisors with generalist - not just investment - knowledge, a new report reveals.
With the nation's UHNWI population set to exceed 3000 by 2017, according to WealthInsight analyst Dr Roselyn Lekdee, financial advice businesses will need to provide complex wealth management services to meet their needs.
"We all know that the majority of super-rich made their fortunes the hard way, thus it becomes necessary for them to require a more sophisticated wealth management services that the core millionaires," she said.
"It is therefore becoming increasingly important for wealth managers and private bankers to build ‘trust' and ‘brand loyalty' with UHNWI clients, and also to understand their complex needs.
"It might be surprising, but to target the UHNWIs successfully, wealth managers and private bankers might have to act like the best generalist not just an investment manager.
"This means that they must be able to assist the UHNWIs in the most possible ways required, ranging from concierge services to providing investment advice — to put it simply, investment knowledge alone is not enough."
Lekdee said that targeting the children of the super-rich has become a key strategy for wealth managers in recent years.
"It is important to build strong relationships with children of UHNWIs at an early stage, as this can help to create ‘brand loyalty'," she said.
"Once children of UHNWIs become confident and comfortable using wealth management services with certain private banks or wealth management firms, they are unlikely to switch — it is better to stay with someone you trust."
AUTHOR
Nicholas O'Donoghue
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
