The race to acquire long-term clients: Netwealth
According to Netwealth and BlackRock, wealth managers and financial advisers are racing to manage the next generation of investors and more high net-worth individuals (HNWIs).
In a webinar produced by Netwealth and BlackRock, the two companies examined the trends facing global wealth management and financial advice for 2023.
Capturing long-term clients
Chantal Giles, managing director and head of wealth at BlackRock Australasia, identified the growing need for wealth managers to capture the client lifecycle and own more of the wealth value chain.
“We’re seeing larger corporations and how they can acquire clients at the beginning and hold them all through to retirement,” she explained, with many targeting younger generations of investors.
Additionally, Giles observed that the re-aggregation of advisers in mid-tier organisations was prevalent in the US and was beginning to occur in Australia.
Changing wealth paradigm
Fee-based advice was accelerating across the globe, enabling greater accessibility for clients. In the Asia-Pacific region, fee-based assets made up 17% of total assets during 2020. This figure was set to increase to 25% by 2026.
The firms also identified the growing popularity of managed accounts, whereby financial advisers or asset managers had discretionary control.
“We are seeing greater personalisation and customisation of managed accounts,” Giles noted, particularly in Australia.
Greater portfolio personalisation
Investors demonstrated a growing desire for portfolios to solve specific problems, such as their tax situation, and for more co-creation in adviser-client relationships.
“In Australia we are seeing more and more personalisation through technology, particularly in the high net-worth clientbase,” the managing director said.
Nearly one-quarter of ultra-high-net-worth (UHNW) individuals were seeking out tax planning services, demonstrating tax personalisation as an early-stage opportunity.
Sustainable portfolios becoming the norm
Investing into ESG-related assets was increasingly becoming the default, with Europe at a more mature stage.
Over 20% of Australians were already participating in responsible investing, according to Netwealth. Moreover, 33% of clients were looking to make an investment in sustainable products over the next five years.
“Having conversations with clients around sustainability builds a rapport where they feel like they have a relationship with an adviser.”
Digital and human advice
Netwealth and BlackRock found that those who balanced a technological and human approach to their advice would experience the best client outcomes.
“A blend of great technology along with a human overlay is still the preference of most Australians and globally,” Giles added.
Nearly 70% of investors believed that financial professionals could build a personalised portfolio better than digital options alone.
AUTHOR
Jasmine Siljic
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
