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1、WEALTH MANAGEMENTTOP TRENDS 2023CONTENTSForeword 3Introduction 4Trend 1:ESG regulatory standards aim to curb corporate investment greenwashing 8Trend 2:Demand for OCIO services is on the rise 10Trend 3:Investor appetite for digital assets drives wealth industry capabilities beyond cryptocurrencies 1
2、2Trend 4:Amid volatility,investors seek new portfolio strategies,such as direct indexing 14Trend 5:Wealth management firms refocus on the mass-affluent segment 16Trend 6:As women increasingly control more wealth,firms must earn their trust and wallet share 18Trend 7:Evaluating cybersecurity for futu
3、re readiness 22Trend 8:A digitalized core can bridge the gap between relationship managers expectations and wealth management firms automation capabilities 24Trend 9:The wealth management industry is consolidating to achieve scale 28Trend 10:Family offices showcase bespoke services while facing regu
4、latory dynamics 30Conclusion 32Wealth Management Top Trends 20232Anirban Bose Financial Services Strategic Business Unit CEO&Group Executive Board Member,CapgeminiFOREWORDTodays business world operates within ambiguity,and so does the wealth management sector:neither stability nor solid growth can b
5、e guaranteed.Moreover,mounting inflation,rising interest rates,wavering geopolitics,and the specter of new global health crises may spark a 2023 recession or stagflation.Amid these vagaries,precisely identifying the most impactful near-term wealth industry trends depends on a combination of model-ba
6、sed analyses,industry experience,and a historical lens.The industry is undergoing a paradigm shift fueled by changing demographics,generational wealth transfer,the growing influence of millennial high-net-worth individuals,and burgeoning digitalization.Todays investors are more knowledgeable than ev
7、er,with access to expert information and research tools at their fingertips.Armed with that know-how,many clients want to take an active role in managing their wealth.Financial advisors are challenged to drive client portfolio performance within an investment climate marked by risk and uncertainty a
8、nd exacerbated by ever-expanding regulations,new business models,and dynamic competitive forces.And so the overriding question for relationship managers in 2023 may be the following:as more offerings are commoditized,and more clients expect greater convenience,self-directed digital platforms,and a l
9、a carte fees,how will wealth management firms distinguish themselves,continue to grow,and justify rates?Wealth Management Top Trends 2023 offers insights about critical topics that may reshape the industry in the near and long term.Wealth Management Top Trends 20233INTRODUCTIONWealth management firm
10、s that target and welcome next-gen investors can fortify their positions amid shifting client demographics,requirements for bespoke investment solutions,advancing technology,and industry consolidation.CHALLENGING MARKET CONDITIONS WILL SHAPE THE WEALTH MANAGEMENT INDUSTRYAs economies lurched out of
11、the pandemic throughout 2022,wealth firms taking note of robust equity markets and demand for omnichannel and personalized engagement began digitalizing the end-to-end client journey.So,what will shape 2023?Expect a combination of trend-influencing factors new client priorities and behaviors,challen
12、ging macroeconomics,product and services democratization,more regulatory oversight,tight margins,and ever-increasing competition.LOOKING BACK AT 2022Last year,our Wealth Management Top Trends 2022 report anticipated that wealth firms would focus on capturing immense intergenerational wealth transfer
13、 opportunities.And indeed,firms worldwide are beginning to build or advance capabilities to attract millennials and Gen X and Gen Z clients while recruiting specialized talent who understand next-gen wealth perspectives.As a follow-up to our 2022 sustainability trend forecast,high-net-worth individu
14、als(HNWIs)desire more accurate and detailed environmental,social,and governance(ESG)impact data.And they are more vigilant about potential greenwashing meaning companies conveying false or misleading information about their social/environmental commitment and behaviors.Family offices are raising the
15、ir profile among investment heavy hitters.Capgeminis World Wealth Report 2022 analytics foretold the trend that a third of ultra-HNWIs globally(those with greater than USD30-million in liquid assets)use family offices to manage their wealth.Moreover,to meet evolving client expectations and capture t
16、he expanding mass-affluent segment,we reported advisors transition by advisors to a personalized,hybrid advisory approach.Embedded wealth management offerings distributed via FinTech platforms and open APIs are disrupting industry dynamics and incumbents,as digital transformation and customer-centri
17、city enable frictionless client convenience.WHAT TO EXPECT THROUGHOUT THE MONTHS AHEADThe onus is on wealth management(WM)firms to expand digital offerings as investor interest in digital assets,and portfolio expansion heats up.Our World Wealth Report 2022 revealed that 70%of HNWIs have invested in
18、digital assets,which illustrates why firms must diversify products and services,including a range of digital offerings.And when it comes to inclusivity for segments such as the mass affluent or women,only 27%of firms say they actively pursue these prospects.Additionally,WM firms lack segment-specifi
19、c products and services,with only 37%providing offerings for women.Yet family offices and WealthTechs aggressively pursue underserved segments.The most successful traditional firms will strategically reimagine how to attract and retain increasingly diverse client communities.Firms that stay in the g
20、ame will empower advisors with updated and actionable data sources,flexibly scalable advanced technology,streamlined workflows,and multichannel and digital tools.Our World Wealth Report found that only 46%of wealth firms augment advisor capabilities with leading-edge digital tools for personalized e
21、ngagement.In addition,a robust cybersecurity system will be essential in 2023 as wealth services become increasingly digitalized and infrastructure migrates to the cloud.Wealth Management Top Trends 20234Amid global economic volatility,mergers and acquisitions will stoke competition,boost firms asse
22、ts under management,and expand strategic footprints into new markets through non-traditional and niche products and services.Furthermore,as interest in sustainable investment grows,wealth firms will hedge against greenwashing through transparent propositions that meet HNWI expectations and sustain r
23、eputational trust.Globally,55%of HNWIs say causes with positive ESG impact are critical investment objectives.As demand for specialized portfolios escalates,expect more investors to opt for a direct indexing strategy.In addition,the growing complexity of assets,the necessity to adjust to volatile ma
24、rkets and uncertainties,access to experts,and shrinking investment management costs will heighten the profile of outsourced Chief Investment Officers(OCIOs).So,who will adeptly meet the needs of tomorrows investors traditional wealth management firms,agile and customer-centric WealthTechs,or family
25、offices positioned to deliver a wide range of services with one-stop-shop convenience?TOP TRENDS FOR 2023We based our 2023 wealth management trends on analysis across five broad themes.Change in industry dynamics,where we examined public calls for more stringent regulations to curb corporate greenwa
26、shing and increased tendencies to outsource the chief investment officer position.Creating and enabling new values covers the demand for digital assets beyond cryptocurrencies and HNWI requests for a direct indexing investment strategy.Customer centricity covers strategies to expand market share thr
27、ough new segments such as the mass affluent and women.Business resilience explores why cybersecurity is essential as industry digitalization escalates and WM firms modernize their core IT infrastructure and empower advisors with automated productivity tools.New horizons includes how mergers and acqu
28、isitions(M&A)will reshape industry scale and the impact of family offices as HNWIs demand end-to-end personalized service.Wealth Management Top Trends 20235The matrix represents Capgeminis prioritization of 2023 trends in an operating environment including:Rising inflation and interest rates,coupled
29、 with stagflation trends Operational disruption due to geopolitical instability Intense competition and increased focus on customer centricity due to the entry of new-age players Operational cost overruns and high capital lock-in Dynamic regulatory activity.Adoption priority refers to the urgency of
30、 adopting a 2023 trend to maximize value creation because of its sector importance.Business impact represents the impact of a trend on wealth management firms 2023 business as it relates to customer experience(CX),operational excellence,regulatory compliance,or profitability.Circumstances will vary
31、for each firm depending on its business priorities,geographical location,and several other factors.For more information,dont hesitate to contact us at .Exhibit:Top trends in wealth management 2023 Priority matrixESG regulatory standards aim to curb corporate investment greenwashingInvestor appetite
32、for digital assets drives wealth industry capabilities beyond cryptocurrenciesAmid volatility,investors seek new portfolio strategies,such as direct indexingWealth management firms refocus on the mass-affluent segmentAs women increasingly control more wealth,firms must earn their trust and wallet sh
33、areEvaluating cybersecurity for future readinessA digitalized core can bridge the gap between relationship managers expectations and WM firms automation capabilitiesThe wealth management industry is consolidating to achieve scaleFamily offices showcase bespoke services while facing regulatory dynami
34、csDemand for OCIO services is on the riseSource:Capgemini Research Institute for Financial Services Analysis,2022Changes in industry dynamicsBusiness resilienceNew horizonsCustomer centricityCreating and enabling new values31058467129Business impact(2023)Adoption priority(2023)MediumHighS
35、ignificantMediumHighSignificantWealth Management Top Trends 20236Wealth Management Top Trends 20237ESG REGULATORY STANDARDS AIM TO CURB CORPORATE INVESTMENT GREENWASHINGAs sustainable investing becomes increasingly popular,the spotlight will shine on social and environmental disclosure gaps.Expect s
36、tandardization and transparency as regulators drive to safeguard investors.CONTEXTESG investment products have become mainstream across markets.Therefore,as HNWIs demand ESG-aligned products,wealth management firms must prepare to meet investors changing priorities by differentiating their advice.Bl
37、oomberg reports that ESG investments will exceed USD53 trillion by 2025,representing over a third of the projected total assets under management(AUM)of USD140.5 trillion1.As a result,the ESG debt market could rise to USD15 trillion by 2025.2 Still,some bond issuers became skittish in 2022 based on a
38、n assessment that lower ESG investment financing costs may not be worth the risk of exposure to greenwashing accusations.3 Most assets managed by ESG funds worldwide were concentrated in Europe in 2021,accounting for 81%of total AUM;US fund managers handled 13%.4 While Europe has been the ESG debt-i
39、ssuance engine,we expect the next growth trend to be wide-ranging.The European Union finalized its master plan against greenhouse gas emissions in Q2 2022.The EUR1 trillion Fit for 55 package includes climate and energy legislation to support the regions political pledge to cut greenhouse-gas emissi
40、ons by at least 55%by 2030.5 ESG assets in the United States have expanded by 40%since 2020,and 2022 totals may exceed USD20 trillion.Expect Asia to host the next ESG growth wave,particularly in Japan,where the countrys Government Pension Investment Fund(GPIF)has been allocating funds to ESG investm
41、ents since 2017.6 Our World Wealth Report 2022 analysis revealed that 55%of global HNWIs invest in causes with positive ESG impacts they consider important.CATALYSTS As ESG-linked products become more widely available,cautious investors seek evidence of measurable impact.According to World Wealth Re
42、port 2022 analysis:64%of HNWIs ask for an ESG score to know more about a funds societal impact and performance.78%of ultra HNWIs and 81%of HNWIs younger than 40 are likely to request ESG scores from their WM firm.Within the same report,WM firms and advisors expressed societal impact(SI)strategy chal
43、lenges:40%of advisors said it was a complex task to obtain accurate ESG impact data.50%of firms lacked clarity regarding sustainable investing ROI.While ESG investing has strengthened its grip by becoming mainstream and even mandatory in certain jurisdictions,it comes with challenges.Regulatory scru
44、tiny will be essential as investors seek assurance against greenwashing.IN A NUTSHELLMeasuring,reducing,and disclosing investment portfolio carbon information at scale and in line with global pledges,such as the Paris Agreements 2050 net-zero target,will likely present challenges.Relationship manage
45、rs say ESG due diligence is complex because of challenges in measuring the actual impact of ESG-aligned investments.The introduction and enforcement of global ESG impact disclosure regulations are crucial to helping investors evaluate ESG impact accurately.BlackRock mentioned in its 2022 Sustainable
46、 Investment statement that a quarter of its assets invested in corporate and sovereign issuers were net-zero aligned and will grow to at least 75%by 2030.7 Vanguard expects about USD145 billion of its USD1.7 trillion in actively managed assets to be net zero by 2030.8TREND 1Wealth Management Top Tre
47、nds 20238Figure 1.Global HNWIs represent diverse ESG investment objectives and focus areas%HNWIs with environmental,social,and governance(ESG)impact as an important investment objective76%46%72%58%70%68%58%21%74%47%Key focus areas Environmental risks Effective and ethical corporate governance Robust
48、 risk and compliance frame-worksKey focus areas Environmental risks Effective and ethical corporate governance Socially conscious business policiesKey focus areas Effective and ethical corporate governance Robust risk and compliance frameworks Environmental risksKey focus areas Risk and compliance f
49、rameworks Environmental risks Effective and ethical corporate governanceKey focus areas Environmental risks Climate change Effective and ethical corporate governanceKey focus areas Socially conscious business policies Risk and compliance frameworks Climate change71%49%GLOBALNORTH AMERICAEUROPEAPAC(e
50、xcl.Japan)JAPANLATIN AMERICA55%55%66%69%25%65%Age 40 yearsSource:Capgemini Research Institute for Financial Services Analysis,2022IMPACTIn the months ahead,we expect wealth management firms will continue seeking internationally recognized metrics to ensure fair and accurate sustainable investment co
51、mparisons.Meanwhile,the trend so far has been for governments and regional authorities to share standards for use within their geographies.The Global Reporting Initiative(GRI),IFRS Foundation Framework,or the Task Force on Climate-related Financial Disclosures(TFCFD)offer baselines.However,in 2023 a
52、s major global markets introduce and enforce more ESG regulations,SI disclosure will become more consistent,comparable,and informative.Eventually,regulatory standards will bolster investors ability to evaluate ESG opportunities and risks.We anticipate regulators to expand metrics in 2023 and beyond,
53、following the example of Europe,which was an early mover.The Sustainable Finance Disclosure(SFDR)and Taxonomy Regulation(SFTR)offer EU investment managers new rules about disclosing ESG risks in their products and incorporating risk assessment within investment processes.In the UK,large asset manage
54、ment firms must produce climate disclosure reporting aligned with the TFCFD.9In the United States,the Securities and Exchange Commission assesses climate and material ESG issues along two dimensions how companies report on ESG issues and how they address potential greenwashing by investment firms pr
55、omoting ESG products.10 And Hong Kongs Securities and Futures Commission implemented new guidelines in 2022 on enhanced disclosures required for authorized funds citing ESG factors as their investment focus.11 Singapore,India,China,and Japan are also considering sustainability regulations and requir
56、ements.12Wealth Management Top Trends 20239DEMAND FOR OUTSOURCED CHIEF INVESTMENT OFFICER SERVICES IS ON THE RISEAs assets become increasingly complex and market uncertainty makes expert adjustments essential,specialist managers Outsourced Chief Investment Officers(OCIOs)offer cost-effective support
57、.CONTEXTOnce a niche subsector,outsourced chief investment officer(OCIO)services are now critical components within the wealth management ecosystem.The term refers to the full or partial outsourcing of an organizations investment function to a third party or investment consultant.From 2016 to 2021,t
58、he global OCIO industry grew from USD1.29 trillion in assets under administration(AUA)to USD2.46 trillion,according to a report from US-based Chestnut Advisory Group.The industry segment is on track to reach USD4.15 trillion in AUA by 2026,an 11%five-year CAGR.13 Non-US outsourced chief investment o
59、fficer assets reached USD834 billion in 2021,comprising just over a third of global OCIO assets under administration.International OCIO assets grew by more than 28%in 2021(an average 15%increase between 2017 and 2021).As a result,non-US OCIO assets under administration are likely to surpass USD1.2 t
60、rillion by 2026,according to the 2022 Chestnut Advisory report.14 Amid geopolitical and macroeconomic uncertainty,corporations and financial institutions,such as asset management firms,leverage the OCIO discretionary investment model to gain expertise and scale.CATALYSTSDemand is up for OCIO service
61、s because investment strategies are becoming more complex.OCIOs are conveniently available and attractive as the post-pandemic environment sparks an uptick.Firms that bring in external chief investment officer support receive custom decision-making advice without giving up authority.As high-impact i
62、nvestment personnel and board committee members left or retired as part of the“Great Resignation,”asset owners became burdened.Therefore,wealth management firms are shifting investment management to outsourced chief investment officers.As institutional portfolios continue to diversify and scale,allo
63、cators seek direction to navigate new risk barometers and nascent opportunities such as cryptocurrency,non-fungible tokens(NFTs),metaverse investments,and real assets.Increasingly,OCIOs are influencing those decisions.Investment complexity is driving decisions to use OCIO services.Mayback Securities
64、 Thailand partnered with BNY Mellon Investment Management to strengthen its investment advisory and wealth management capabilities.15 Major firms such as State Street,BlackRock,and Vanguard have established OCIO business lines.Meanwhile,several niche OCIO players also exist.For example,Boston-based
65、Cambridge Associates specializes in helping endowments,foundations,and pension plans manage custom investment portfolios.Moreover,as in-house investment teams face challenges in delivering high returns within todays ongoing low-interest environment,it makes sense to outsource investment professional
66、s with better connections and resources.IN A NUTSHELLA seasoned OCIO can make strategic asset allocation changes during market disruptions(e.g.,the beginning of the COVID-19 pandemic in 2020).They can swiftly alter portfolios to rebalance and benefit from investment opportunities available only for
67、a brief time.OCIOs may combine asset classes cash,real estate,bonds,digital assets,alternative investments,and stocks to accommodate clients appetite for risk.These multi-asset strategies are crucial during market dislocations such as those spurred by COVID-19 and other uncertainties.TREND 2Wealth M
68、anagement Top Trends 202310Figure 2.Whats driving the Outsourced Chief Investment Officers popularity?Key investment staff and board committee members have either left or retired Wealth management firms find it increasingly more viable to shift asset management to OCIOsGreat ResignationVolatile Inve
69、stment Environment Traditional firms are not properly structured to effectively navigate a volatile,complex,fast-moving investing environment OCIOs are well-equipped to tackle these situationsCost Structure and Resources OCIOs charge a fixed monthly rate/fee Firms can offset costs associated with fu
70、ll-time employees and focus on reducing downtime and driving productivityAgile Governance Advisory Holistic approach to advising clients on articulating risk and return targets Effective risk management ESG implementation and measurementIncreasing Demand from Corporates,Non-profits,and Pension Funds
71、 Traditional firms are well poised to take advantage because they have long-standing relationships with these entitiesComplex Asset Class Expertise Bespoke services to suit each investor type Expertise in complex products digital assets,PE,infrastructure,alternative assets,etc.Source:Capgemini Resea
72、rch Institute for Financial Services Analysis,2022 OCIOs eliminate the need to hire and retain internal investment management staff by providing up-to-date systems for policy design,risk management,back-office operations,and performance measurement.Through portfolio management efficiencies,OCIOs can
73、 reduce operational costs by bargaining for competitive manager fees,eliminating fund-of-fund fees,and negotiating third-party provider agreements.The trustees of Centrica outsourced the UK utilitys GBP10 billion(EUR11.98 billion)pension schemes to global investment manager Schroders for end-to-end
74、fiduciary management services focused on robust portfolio construction,sustainability,and bespoke service and reporting.16 In New Brunswick,Canada,WorkSafeNB selected Toronto-based SEI Investments Company for OCIO services handling more than USD1 billion(CAD1.4 billion)of the organizations assets.Wo
75、rkSafeNB administers no-fault workplace accident and disability insurance and comprehensive accident prevention health and safety initiatives for employers and their workers.SEI will provide investment and operations management services,asset allocation strategy,client servicing,and reporting.17IMPA
76、CTAn OCIO offers investment portfolio direction for corporations and asset management firms during complex,challenging fiduciary times.Services include managing assets,navigating through market instability,and optimizing portfolio performance to help reach investment goals.We anticipate the OCIO tre
77、nd to gain even more momentum in 2023,enabling wealth management firms to delegate investment responsibility to seasoned specialists,putting the firm in a position of oversight and gaining the bandwidth to focus on organizational objectives.Outsourced portfolio management is poised to become a signi
78、ficant trend particularly among endowments,foundations,and family offices.Wealth Management Top Trends 202311INVESTOR APPETITE FOR DIGITAL ASSETS DRIVES WEALTH INDUSTRY CAPABILITIES BEYOND CRYPTOCURRENCIESWealth management frontrunners are meeting investor demand for portfolio expansion and diversif
79、ication by becoming digital asset experts.CONTEXTThe sweeping shift from traditional investments is encouraging wealth management(WM)firms to offer digitally structured products in addition to digital tokens or“coins”that exist on a distributed and decentralized ledger(blockchain).HNWIs seeking to d
80、iversify their portfolios are turning to digital assets.And they want information on everything from cryptocurrencies to indirect crypto investment through exchange-traded funds(ETFs),NFTs,metaverse-related products,and digital currency.WM firms must educate their relationship managers and clients a
81、bout the nuances of digital offerings.Many firms remain relevant by offering investment strategies and client experiences that include detailed and transparent views of digital products.CATALYSTSAs interest in digital assets booms,WM firms are giving their product capabilities and offerings a faceli
82、ft.Accordingly,digital asset management solutions are on track to 13.6%compound annual growth(20222027),nearly doubling from USD4.2 billion to USD8 billion.18 With digital asset choices proliferating,more HNWIs are expressing interest because a wide range of digital assets allows investors to divers
83、ify their portfolios to suit unique financial goals.Increased digitization and blockchain advancements further facilitate digital asset transactions.IN A NUTSHELLOur World Wealth Report 2022 revealed that 70%of HNWIs globally invested in digital assets(including more than nine out of 10 HNWIs younge
84、r than 40),with cryptocurrencies being the favored digital asset.Todays growing range of digital assets and metaverse influences have become catalysts inspiring WM firms to explore investment options beyond cryptocurrency.HSBC launched a discretionary metaverse portfolio for high-net-worth investors
85、 and ultra-HNWIs in Asia.19 AXA Investment Managers(AXA IM)unveiled the multi-cap AXA WF Metaverse Fund to provide long-term metaverse investment growth opportunities.20 Relationship managers must understand digital asset strategies,underlying infrastructure,tax implications,risks,and details about
86、returns to balance client enthusiasm for digital assets while explaining associated risks.21 Nasdaq and Hashdex,a So Paulo WealthTech specializing in digital assets and blockchain,launched the Nasdaq Advisor Academy and a curriculum that offers financial advisors tailored educational resources.Topic
87、s include the digital asset ecosystem evolution,investment considerations,regulations,taxes,and more.The program features live presentations,core learning materials,Q&As,and practice modules.22 Bank of America launched a virtual reality training program for 50,000 employees to build and retain new s
88、kills,such as strengthening and deepening client relationships,navigating difficult conversations,and responding with empathy.23 Influential US financial services author and podcaster Ric Edelman founded the Digital Assets Council of Financial Professionals(DACFP)in 2018 to train and educate wealth
89、advisors about digital assets.24TREND 3Wealth Management Top Trends 202312Figure 3.Success in the expanding digital assets universe requires knowledgeable relationship managers They approach digital asset portfolio combinations strategicallyThey are well-versed in regulations and associated risksThe
90、y are familiar with a range of digital assets and ecosystemsThey are supported by advanced technology infrastructureThey consider investments with an eye on returnsRelationship Manager rockstars educate clients about the growing universe of digital assetsSource:Capgemini Research Institute for Finan
91、cial Services Analysis,2022IMPACTWM firms will continue to educate relationship managers and clients about digital assets and ecosystems in 2023 and for the foreseeable future to meet the needs of HNWIs curious about alternative investments.In addition,training initiatives will help firms upskill st
92、aff and broaden organizational capabilities as more relationship managers want to learn about digital assets.Firms will overcome digital delivery obstacles by providing their advisors with productivity-enhancing resources and equipping them to handle queries about digital assets.The trend is empower
93、ment for relationship managers,so they can guide clients to develop successful investment strategies as WM firms weave new digital solutions into infrastructure upgrades.Wealth Management Top Trends 202313AMID VOLATILITY,INVESTORS SEEK NEW PORTFOLIO STRATEGIES,SUCH AS DIRECT INDEXINGA rebalanced por
94、tfolio can be a safety hedge within a dynamic investment environment.CONTEXTFinancial markets worldwide are uncertain due to lackluster corporate earnings,rising interest rates,inflation,and incendiary geopolitics.Volatility is unsettling,but it serves as a reminder of the value of portfolio diversi
95、fication in distributing risk across geographies,industries,and asset classes.Democratization of assets and sophisticated portfolio management techniques have leveled the playing field.In the past,only the wealthiest investors and their advisory firms sought direct indexing due to high costs.But rec
96、ent tech advancements make customizable indices available to a broader customer base.As a result,mass-affluent investors are turning to direct indexing(DI)because it supports tax efficiency,diversification,personalization,and values-based investing.Increased demand for DI products and strategies is
97、inevitable as wealth firms scale portfolio personalization to meet investor requests to align holdings with their social and environmental values.HNWIs and ultra-HNWIs seek to rebalance their portfolios.As a result,many are actively shifting to alternative investments,especially private equity.Inves
98、tors are pursuing private markets to offset short-term volatility and boost longer-term returns.By 2024,46%of HNWIs will invest in private markets,up from 29%in 2022.25CATALYSTSOne of the most significant advantages of direct indexing is tax-loss harvesting,which enables investors to offset profits
99、with losses when the stock market drops.Direct indexing may also appeal to those looking for portfolio customization,such as values-driven investors(particularly millennials)who want to divest from specific sectors.In Q2 2021,DI was a USD399 billion market,and Boston FS researcher Cerulli Associates
100、 expects it to grow to USD730.5 billion by 2026.The DI leaderboard includes Morgan Stanley,BlackRock,Fidelity,Columbia Threadneedle,Natixis,and Envestnet.26 Alternate investments are a top choice for HNWIs and ultra-HNWIs seeking to rebalance their asset allocations.The World Wealth Report 2022 foun
101、d that HNWIs preference for alternative investments had increased by five percentage points between 2018 and 2022.The 2022 Preqin Global Alternatives Report predicts that alternative investment AUM will rise from more than USD13.3 trillion in 2022 to upwards of USD23 trillion in 2026.27 Goldman Sach
102、s is reportedly set to invest USD30 billion in alternative investments in Asia.In Asia,Goldman Sachs is doubling investments to about USD60 billion,focused on technology startups,real estate,consumers,and renewable energy.28IN A NUTSHELLIn the United States,separately managed accounts(SMAs)are attra
103、cting the interest of WM firms as big players acquire firms specializing in direct indexing and bespoke strategies delivered via SMAs.29 WM firms increasingly target SMAs toward mass-affluent retail clients with at least USD100,000 to invest.In addition,SMAs offer direct ownership of securities and
104、tax advantages over mutual funds.Vanguard acquired Just Invest,a California provider of tax-managed,tailored wealth management technology,in late 2021.Vanguard said Just Invests personalized indexing platform would enable its advisors to unlock ways to tailor client experiences and provide value wit
105、hin its USD3 trillion financial intermediary business.30 BNY Mellon subsidiary Pershing purchased DI solutions provider Optimal Asset Management,a DI solutions provider,in Q4 2021.Optimal Asset Managements patented software allows investors to select individual equities in an index solution,includin
106、g options to tailor portfolios for sustainable investments.31TREND 4Wealth Management Top Trends 202314 BlackRock acquired Aperio,a pioneer in customizing tax-optimized index equity SMAs.The combination expands BlackRocks personalization capabilities via tax-managed strategies across factors,compreh
107、ensive market indexing,and investors ESG preferences.32 Family offices and ultra HNWIs currently hold around 90%of the more than USD7 trillion in private-market AUM.An Oliver Wyman/Morgan Stanley report anticipates private-market AUM to grow to roughly USD13 trillion by 2025,aided by HNWI investment
108、.33 Blackstone plans a private equity fund targeting individuals with between USD1 million and USD5 million in investable assets,with periodic opportunities to withdraw to mitigate liquidity challenges.34IMPACTExpect more WM firms to prioritize private markets to give HNWIs higher returns and altern
109、ative asset diversification advantages.Moreover,technology and education will play a critical role in helping relationship managers respond to investor demands to incorporate alternative investments in diversified portfolios.As investor preference for alternative investments increases and the privat
110、e markets open up,firms will need educational and informational capabilities and funds suited to a broader clientele.Demand for DI products and services is surging because DI enables customizable client portfolios based on investor values and preferences.Moreover,the desire for higher portfolio retu
111、rns using tax-efficient investment strategies is rising,along with demand for low-fee trading environments and technological advancements that automate manual advisory functions.35The DI trend will continue to gain momentum in 2023 as wealth management firms add DI offerings for a competitive edge.M
112、oreover,DI technology providers will evolve as large asset management firms seek to ramp up their index advisory tools through acquisition and partnerships.Wealth Management Top Trends 202315WEALTH MANAGEMENT FIRMS REFOCUS ON THE MASS-AFFLUENT SEGMENTHistorically,wealth management firms catered to H
113、NWIs with personalized,fee-based approaches and retail clients with a broad product range and overlooked the mass affluent.CONTEXTThe mass-affluent wealth band includes investors with assets between USD250,000 and USD1 million.The segment is flourishing as more middle-class individuals seek to expan
114、d their wealth through investment.Mass affluents account for around 11%of the global population,with a high proportion of digitally-engaged young professionals seeking personalized offerings,according to Credit Suisse.As mass-affluent wealth grows organically and through inheritance,it will require
115、more sophisticated financial advice.36 A Global Data Wealth Markets Analytics report says mass affluents in the United States are on track to control over USD47 trillion by 2025.37 The global high-net-worth population continues to swell,albeit affected by regional market fluctuations and the bullish
116、ness of major stock indices.However,months of low-interest rates and economic uncertainty have squeezed financial sector profits.The result?Financial institutions and relationship managers are looking at mass affluents with more focus.Dynamic post-COVID-19 market conditions and increasing competitio
117、n from new-age players and robo-advisory solutions are pushing WM firms to boost performance,business scale,and efficiency.CATALYSTSSome future-focused WM firms have adopted a new outlook and are capturing the mass affluent in their early life stages and growing them within their ecosystems.However,
118、most firms continue to neglect this wealth band.Our World Wealth Report 2022 revealed that only 27%of firms serve the mass affluent wealth band,and only 36%are exploring offering services in the near to mid-term.Some WM firms and banks are making significant efforts to capture this segment.For examp
119、le:New York-based alternative investment management firm Blackstone plans to double its global private wealth team to expand its mass-affluent business in the next few years.38 HSBCs Global Private Banking unit plans to hire about 100 new employees in China in 2022 as the bank expands mass-affluent
120、services and offerings.39 In the spring of 2020,DBS launched NAV Planner,Singapores first digital advisor,to help retail customers improve their financial well-being.Through NAV Planner,DBS aims to democratize access to WM services to enable more people to invest in stock markets while mitigating ri
121、sk through better information.40 Lloyds Banking Group plans to launch a digital service combining banking,insurance,advice,and investment products targeting mass-affluent individuals.41 Lloyds aims for more than GBP5 billion(greater than USD6 billion)in total banking balances for its mass-affluent c
122、ustomers by 2024 and is targeting GBP 25billion(greater than USD30.36 billion)of incremental net flows into its 2026 investment proposition.IN A NUTSHELLThe rising pool of mass-affluent investors demands and expects more from WM firms.And if firms dont deliver,plenty of enthusiastic FinTechs and rob
123、o-advisory services will cost-effectively fill the void.The demand for complex financial products is up,especially among mass-affluent investors expected to branch out from exchange-traded and mutual funds.In 2023 and beyond,we believe they will explore and opt for alternatives such as structured pr
124、oducts,digital assets,art,non-bankable assets,and other traditional HNWI assets.42 Relationship managers are turning to FinTech solutions and artificial intelligence to tap into the mass-affluent demographic,which includes youthful investors comfortable with online investing.Todays mass-affluent cli
125、ents are looking for solutions that consider the rising cost of living,their growing interest in sustainability,and their retirement requirements.In addition,they expect assistance in accumulating and safeguarding their wealth,together with cost-effective financial counseling and advice.Firms realiz
126、e they need new capabilities to capture leads through alternate data sources such as online channels.TREND 5Wealth Management Top Trends 202316Figure 4.Implement a winning strategy to attract and retain mass-affluent prospectsAdopt a client-centric strategy to develop cost-effective and bespoke offe
127、ringsFind the right balance between digital and personal interaction while ensuring both are insights driven.Make strategic investments in advanced tech solutionsMass-affluent clients expect tailored digital solutions that are relevant to their lifestyle,and only by adopting digital and analytical t
128、ools can WM firms deliver seamless services to them.By investing in digital channels,self-learning AI,process automation,and big data analytics,firms can claim a bigger piece of the business.Implement an agile operating modelSetting up the organization in a modular way to identify,analyze,and act qu
129、ickly on the changes in the ecosystem and client expectations will enable WM firms to remain relevant in the disrupted environment.Source:Capgemini Research Institute for Financial Services Analysis,2022IMPACTWe anticipate more aggressive targeting of the mass-affluent segment in 2023.COVID-19,macro
130、economic influencers,political uncertainty,rising debt,and low growth are prompting relationship managers to rethink their business and operating models to include the mass affluent.Due to shifting demographics,changing customer behaviors,and technological advances,firms can democratize WM products
131、and services to include the mass affluent and gain market share.With an eye on the future,then,more WM firms will prioritize digital tools to help capture this segment cost-effectively and with a rapid time to market.To provide the right experience to mass-affluent investors,firms must balance advis
132、or-driven engagements and self-service touchpoints based on each customers needs and preferences.And to ensure success,relationship managers will need a comprehensive and modular suite of self-directed digital tools and data-enabled advisory capabilities for seamless client service.Wealth management
133、 firms with efficient customer engagement models and hybrid capabilities can cost-effectively cater to the mass-affluent segment.So,who has the most to gain from capturing the mass-affluent market?Incumbent wealth management firms,financial institutions,and affordably-priced retail brokers with a br
134、oad spectrum of solutions and hyper-personalized digital engagement are well-positioned for success.Wealth Management Top Trends 202317AS WOMEN INCREASINGLY CONTROL MORE WEALTH,FIRMS MUST EARN THEIR TRUST AND WALLET SHAREWomen are moving up economically,owning a third of todays global wealth.Yet man
135、y wealth management firms misjudge their requirements,leaving women underserved.CONTEXTThe growing number of wealthy women is sparked by shifting global wealth distribution,cultural attitudes,and intergenerational wealth transfers.Another factor is the rise of women-led businesses.Today,women create
136、 wealth faster than at any time in history.The trend will likely gain momentum as more women join and grow in the corporate world,start and grow successful companies,advance their careers,or inherit more wealth.Forbes 2022 billionaires list revealed that among 2,668 billionaires,327 were women,worth
137、 a collective USD1.56 trillion,up from USD1.53 trillion in 2021.43 Women may own much of baby boomers USD30trillion financial asset pool because they are the leading beneficiaries of current wealth transfers,living an average of five years longer than men.44 By 2025,more than 60%of total UK assets w
138、ill be managed by women,according to a forecast by the Centre for Business and Economic Research.45 In Asia(excluding Japan),womens investible wealth is expected to grow at an 8.88%CAGR(20202025)from USD4.8trillion to USD7.3trillion.46CATALYSTSRelationship managers tend to focus on broad assumptions
139、 about what female customers of WM firms want.As a result,they are mistargeting the category while offering financial advice,developing products and services,designing portfolios,and developing marketing messaging.According to our World Wealth Report 2022 survey of WM firm CXOs,most firms lack segme
140、nt-specific products and services,with only 37%providing unique offerings for women.Womens growing economic power makes them attractive prospects for incumbent relationship managers as well as new-age players.Swiss digital investment platform Marmot offers financial management for women,focusing on
141、gender equality and sustainability.Marmot aims to empower women financially through financial education and investments that fit their situations and life goals.47 It offers a robo-advisor with online client support for new investors;seasoned investors who make a minimal USD100,000 commitment receiv
142、e expert wealth advisory with a management fee beginning at 1.0%.48 Founded in 2014,Ellevest,a by-women-for-women financial company,claimed USD1.4 billion in 2022 assets under management.Its unique investment algorithm successfully considers gender differences.Ellevest had 123,000 clients with an av
143、erage account size of USD8,000 in Q1 2021.49 New and incumbent WM firms are beginning to prioritize female investors.However,given the size of the opportunity,there is room to do more.IN A NUTSHELLLike other investors,women seek healthy returns and purpose-driven investments.But,rather than focusing
144、 exclusively on profit,their goals include connection,meaning,a legacy for the next generation,and making a social and environmental difference.Many incumbent WM firms are not connecting with the next wave of clients because they dont have a segment-specific marketing strategy or offerings suited to
145、 women-specific needs.TREND 6Wealth Management Top Trends 202318 Our World Wealth Report 2022 survey revealed that women seek quality service,fees,product transparency,and data privacy and security when selecting a primary WM firm.The high-net-worth women we surveyed demand value-added services arou
146、nd retirement(75%),inheritance planning(75%),legal support(71%),and tax consultation(76%).Our survey also revealed that compared with male investors,women are less confident in their primary WM firm and their ability to generate or grow wealth over the next 12 months due to a lack of tools or educat
147、ion.Therefore,female HNWIs can benefit from investment education to improve their conviction,which will boost trust and confidence in their WM firm.The needs of women are not vastly different from men.And as WM firms build trust and address womens informational requirements,firms will have to adopt
148、the right communication approach to build long-term relationships.Figure 5.Improved capabilities and engagement strategy can help WM firms serve women more effectively Personalize offerings to capture women HNWIs Capture the fast-growing tech HWNI segment Human-centric design that prioritizes women
149、needs to add an emotional touch Leverage intelligent automation Build a data-and insights-driven culture Offer wealth-as-a-service Enhance digital capabilities for young women HNWIs Offer ESG-focused advisory capabilities Add intelligent advisory to meet unique demands proactively Hybrid advisory an
150、d next-gen client reporting Recruit a diverse advisor workforce,especially women advisors Engage across client life stages Offer value-added services Support FS and non-FS needs Include sustainable wealth offerings,which women now consider when investingENGAGE WOMENCLIENTSEmbrace new businessmodelsA
151、dopt a one-stop-shopapproachBuild an inclusive clientecosystemEnhance advisorcapabilitiesSource:Capgemini Research Institute for Financial Services Analysis,2022Wealth Management Top Trends 202319Capturing the mindshare of women and next-gen customers is about developing a new communication approach
152、,advanced engagement channels,and emotional connections.”Harsh KumarHead of US Citi Alliance,Citi Global Wealth Management,Citi Private Banking,New York,USIMPACTAs womens spending power and the wealth they control grows,we expect relationship managers to transform offerings and the customer journey
153、of female investors in 2023 and the years ahead.Firms will improve their understanding of womens life-stage needs at the micro-segment level entrepreneur,professional,single,married,with children,divorced,widowed,and retired.Firms that build women-centric digital platforms with relevant content and
154、personalized CX will earn a competitive advantage in successfully attracting,engaging,and retaining this critical segment.The most successful relationship managers will understand womens needs and work to strengthen client relationships.Relationship managers should design products and services suita
155、ble for each micro-segment by understanding the target client base and applying advanced analytics.Wealth Management Top Trends 202320Wealth Management Top Trends 202321EVALUATING CYBERSECURITY FOR FUTURE READINESSA robust cybersecurity system is more critical than ever in 2023 as wealth services be
156、come increasingly digitalized and cloud infrastructure migration expands.CONTEXTIn the recent past,WM firms accelerated the deployment of new and advanced applications,adopting emerging technologies such as cloud computing,artificial intelligence,and big data analytics through digital platforms.HSBC
157、 Global Private Banking is investing more than USD100 million in private banking digital capabilities.Its wealth and personal banking set-up enables HSBC to combine its private and retail banking businesses.50 BNP Paribas Wealth Management expanded its digital services offering and launched a new so
158、lution dedicated to investing in private assets private equity,real estate,and infrastructure.51 Most wealth management players use cloud-based software to boost information processing and financial analytics capabilities.In partnership with Amazon Web Services(AWS),Goldman Sachs launched Financial
159、Cloud for Data,a suite of cloud-based data and analytics solutions to help financial institutions securely integrate their data with its financial markets data.52 COVID-19 accelerated the industrys IT infrastructure shift particularly the digital transformation of traditional WM firms and the prolif
160、eration of WealthTechs.However,the adoption of cutting-edge technologies and efforts to digitalize the entire customer journey has contributed to cybersecurity risks for WM firms and investors.CATALYSTSDigital transformation and a remote workforce made WM firms more vulnerable to cybercrime.In addit
161、ion,most firms depend on third parties to perform digital transactions,which can cause a weak cybersecurity link.Globally,the financial sector reported more than 700 weekly cyberattack attempts in Q4 2021,up more than 50%over the same period in the previous year.Studies estimate that on a global sca
162、le the rate of cyberattacks is one every 10 seconds.53 A VMware report indicates that 63%of financial institutions experienced an increase in destructive attacks in 2021,up 17%from 2020.54 Morgan Stanley Wealth Management reported compromised customer accounts via social engineering attacks.55 Bank
163、of America spends over USD1 billion yearly on cybersecurity an indication of the criticality of cyber safety.56 California-based trading app Robinhood suffered a security breach in November 2021 when hackers accessed the names,birthdates,and ZIP codes of roughly 7 million users,and then demanded a r
164、ansom payment.With the firms security lapse in the news,account holders sued Robinhood for alleged cybersecurity failures that unlocked the door for hackers.As a result,the firm agreed to pay USD19.5 million in damages and USD500,000 in fees to US-based customers hacked between January 1,2020,and Ap
165、ril 27,2022.57IN A NUTSHELLFinancially motivated cybercriminals often target WM firms for obvious reasons.Much like banks,WM firms handle lucrative financial data;however,they generally have limited security,smaller budgets,and fewer employees to protect their infrastructure.Cybercriminals have take
166、n note,and now WM firms are increasingly vulnerable to attacks.The commercial impact on a business following a cyberattack is financially and operationally crippling.Until recently,many financial institutions underestimated the potential for reputational damage from cyberattacks.Unfortunately,the ha
167、rsh reality is that it can take up to two years to fully recover following a data breach,which can be debilitating for fund managers.Wealth management firms are custodians of millions of clients personal and financial data,making them attractive to hackers.A security breach can result in fines of mi
168、llions or even billions of dollars,not to mention reputational damage because of public distrust.For example,regulators fined JPMorgan Chase USD200 million in December 2021 for failing to track work-related communication on employees personal cell phones and email.58TREND 7Wealth Management Top Tren
169、ds 202322Figure 6.Cybersecurity is imperative in wealth managementPreventfinanciallossesSecureclient dataSecure WMfirmsbrand andreputationAvoid fines andpenalties fromGovt.authoritiesImportance ofcyber security inwealth managementSource:Capgemini Research Institute for Financial Services Analysis,20
170、22IMPACTThe growth of artificial intelligence,machine learning,and the internet of things(IoT),together with 5G deployment,complicates firms IT infrastructure.Therefore,2023 will bring the need for continuing cybersecurity capital expenditure.In a digital investment world,ransomware attacks target p
171、rivate equity,venture capital,and retail fund managers.Clearly,firms cannot ignore potential risks.However,a combination of preventive technologies,policies,and procedures can help shield assets and client data.Analyzing weaknesses and vulnerabilities is the first step to constructing and maintainin
172、g a secure and resilient cybersecurity position.Across the globe,the volume and sophistication of cyberattacks continue to increase and could spark business interruption,service disruption,theft of intellectual property and confidential information,litigation,and reputational damage.As a result,we e
173、xpect WM firms to enhance security capabilities and educate clients and staff in 2023 to optimize cyber defense mechanisms and stave off digital infrastructure attacks.Wealth Management Top Trends 202323A DIGITALIZED CORE CAN BRIDGE THE GAP BETWEEN RELATIONSHIP MANAGERS EXPECTATIONS AND WM FIRMS AUT
174、OMATION CAPABILITIESWealth advisors will gain an efficiency edge as firms modernize their core infrastructure.CONTEXTRelationship managers(wealth advisors)wear multiple hats.Besides offering financial guidance,they conduct client meetings,acquire and retain clients,and perform administrative tasks a
175、ll while keeping up with professional development.Not surprisingly,then,managers can dedicate little time to strategic initiatives.Many client-related tasks are back-office in nature,and significant efficiency improvements may be possible by implementing updated technology and process automation.In
176、the post-COVID-19 environment,advanced technologies and digitization have accelerated and expanded.Today,automation and digitalization give many relationship managers a 360-degree view of client profiles,enabling more insightful product suggestions and meaningful client interaction.CATALYSTSThe weal
177、th management ecosystem faces disruption on numerous fronts.Regulations and governance complexities,volatile markets,rising cost pressures,and evolving investor demographics,preferences,and behaviors have made profitability concerns top of mind for many WM executives.Automating and digitalizing high
178、-volume manual processes that reduce costs and errors while freeing relationship managers to work on higher-value tasks is a timely and attractive proposition.Our World Wealth Report 2022 found that many investors leaned on digital channels and niche offerings during and after the pandemic,making th
179、em less dependent on relationship managers and more personally active in investing.As a result,51%of HNWIs seek self-directed tools and digital capabilities for advice and portfolio management.77%of US and Canadian financial relationship managers reported losing business because they didnt have the
180、appropriate digital tools to interact with clients as the pandemic reduced in-person meetings.59%of relationship managers believe competition for customer mindshare is high,and 55%say demand is shooting upward for personalized services and engagement.Consequently,relationship managers want their fir
181、ms to help them engage more substantially with investors through initiatives including upskilling and training,smart tools for analytics and a consolidated client view,and digital interaction and planning tools.Relationship managers say there is a gap between what they need and what their firm prior
182、itizes.Although data-enabled workstations are narrowing the consolidated customer view gap,relationship managers say they want their firms to help them boost customer engagement.IN A NUTSHELLClient engagement and satisfaction improve when relationship managers efficiently manage their time.Those who
183、 recognize and eliminate time-consuming tasks,leverage advanced technology,and automate when possible can dedicate more attention to client-facing activities.Top wealth management firms are investing in automation and digitalization and embarking on an intelligent,tech-based advisory journey.Bank of
184、 America approved a USD3.6 billion tech initiative budget in 2022 beyond the USD35 billion spent over the preceding 12 years to focus on secure and scalable technology platforms.As a result,the banks global wealth and investment arm boosted clients digital activity and maintained a leadership positi
185、on in patents for secure and scalable technology platforms.59TREND 8Wealth Management Top Trends 202324Figure 7.An automated customer journey will enable advisors to win and retain investor mindshareLeverage technology Augment capabilitiesDeliver personalizationDataCloudDigitalAI/MLDigitalproductsHy
186、bridadvisoryOperationaldigitizationOmnichannelengagementData-drivensolutionsReal-timeassistanceIntelligent customer profilesReal-time productrecommendationTechnologycorePersonalizedportfolioconstructionPortfolio aggregationTailoredcommunicationPersonalizedadvisorySource:Capgemini Research Institute
187、for Financial Services Analysis,2022 HSBC is enhancing its digital investment capabilities in Hong Kong to capture the markets fast-growing 18-to-25 age group.New solutions include Trade25,which offers zero-commission,zero-platform-fee stock trading,the educational service Wealth Coach,and Flex Inve
188、st,a low-cost portfolio builder.As a result,HSBC Hong Kong boosted its millennial customer base by 30%in the first six months of 2021,compared with the same period in 2020,accounting for nearly half of all new customers.61 US investment bank BNY Mellon built its scalable cloud-based Data Vault platf
189、orm by integrating vast information from multiple client touchpoints.The bank mines data-driven insights to create solutions that quickly address evolving investor needs.62 Credit Suisse actively boosted its data extraction capability with a time-saving and scalable approach by investing in Daloopa,
190、an Indian data-crunching firm powered by artificial intelligence.63 A strong technology core leveraging data,AI/machine learning,cloud,and digitalization is the foundation of a scalable customer-centric engagement model.Wealth Management Top Trends 202325 Wealth management firms need to enhance thei
191、r AI capabilities for digitizing clients onboarding experience and help wealth managers serve existing customers and target new client segments with intelligent solutions.”Alexandre DuretProduct Director,Wealth Management,Temenos,Paris,FranceIMPACTA robust core and augmented ecosystem capabilities(s
192、uch as data-driven and digital products,real-time omnichannel engagement,and hybrid advisory services)are now critical.A powerful technology stack is also essential to support digitization across the WM value chain to reduce costs and achieve scale.In 2023,firms will likely continue the trend of per
193、sonalized CX through relationship manager matchups and self-service touchpoints based on a clients unique needs and preferences.However,ongoing success is predicated upon a comprehensive and modular suite of self-directed digital tools and data-enabled advisory capabilities that foster seamless clie
194、nt service.We expect more WM firms to enhance relationship manager capabilities through actionable data analysis,flexible technology,streamlined workflow activities,and digital tools.The most successful will boost personal relationships and customer advocacy by leveraging a data-driven,single-lens c
195、ustomer view.Moreover,future-focused WM firms will maintain investments in advanced digital tools for personalization and hybrid advisory offerings.Wealth Management Top Trends 202326Wealth Management Top Trends 202327THE WEALTH MANAGEMENT INDUSTRY IS CONSOLIDATING TO ACHIEVE SCALEWealth management
196、firms,big and small,are reevaluating their long-term strategic direction and strongly considering consolidation to penetrate the HNWI market more deeply.CONTEXTWealth management industry consolidations were ablaze throughout 2022 despite volatile market conditions.Through mergers and acquisitions(M&
197、A),firms can cater to new markets and client segments with a broad range of products and services to suit diverse HNWI investment appetites.In the second quarter,firms put together 61 M&A deals involving registered investment advisory firms(RIAs),and a record 119 deals closed during the first half o
198、f 2022,up 47%over the first six months of 2021.64 And activity continues in the second half of the year.Wealth Enhancement Group acquired Titus Wealth(an RIA with more than USD776 million in client assets)in July 2022.The deal marked Wealth Enhancements seventh closed acquisition in 2022.65 A desire
199、 to remain competitive,keep up with advanced technology and digitalization,improve top and bottom lines,and reduce costs through economies of scale and scope drives most M&A activity.CATALYSTSWealth management firms emerged from the pandemic relatively intact and aggressively returned to serving exi
200、sting clients and strategizing to broaden their client base.Assets under management went up thanks to client cash flows accumulated during COVID-19 downtime.As fee pressures mount,more firms are reorganizing their business lines.Digital capabilities,such as robo-advisory,are in high demand.So,too,ar
201、e superior client experiences and diversified portfolios that include ESG products,direct indexing,digital assets,and alternative investments.Attracting millennials,female investors,and the mass affluent is another priority.Consolidation can deliver scale,investment capital,and operational and marke
202、ting benefits for sweeping technology improvements.IN A NUTSHELLMergers and acquisitions keep firms competitive through expanded AUM and a strategic footprint into new markets through non-traditional and niche products and services.Throughout 2022,wealth management firms joined forces to pool resour
203、ces and future-proof their businesses.Goldman Sachs acquired Netherlands-based NN Investment Partners for EUR1.7 billion in Q2 2022.The acquisition brought Goldman Sachss assets under supervision to approximately USD2.8 trillion.NN Investment Partners had a track record for successfully incorporatin
204、g ESG factors across its product range,with ESG criteria integrated into about 90%of its assets under supervision.66 French asset management company Amundi completed its acquisition of Lyxor from Socit Gnrale in June 2022 for EUR825 million to enrich its asset management capabilities with alternativ
205、e investment expertise.As a result,Amundi gained combined ETF business control of more than EUR170 billion in AUM across more than 300 products a 14%share of the European market.67 Swedish investment house EQT AB agreed in Q1 2022 to buy Baring Private Equity Asia,which had EUR17.7 billion in AUM.EQ
206、T AB said Asian expansion is a strategic priority because the region accounts for more than a third of global GDP today and may contribute more than 40%of global GDP growth by 2030.68 Morgan Stanley acquired Cook Street Consulting,an SEC-registered investment advisor that provides consulting service
207、s to retirement plan sponsors,corporate accounts,foundations,and endowments.Cook Street advises on about USD72 billion of client assets.69 Citi created a single wealth management organization,Citi Global Wealth,by unifying its Global Consumer Banking and Institutional Clients Group teams.70 TREND 9W
208、ealth Management Top Trends 202328Figure 8.Exciting times for beyond-scale M&A strategies in the wealth spaceWealth Management M&A Strategic ShiftAdvantage ScaleAdvantage ScopeRevenue-based synergiesEconomies of scaleImproved cost efficienciesIncreased market shareGeography and capabilities expansio
209、n(Products/Services/Technology/Talent)New markets penetrationNew products and services deliveryBeneficial cultural shiftSource:Capgemini Research Institute for Financial Services Analysis,2022 Similarly,HSBC merged its Private Banking,Wealth Management,and Retail Banking business into a single Wealt
210、h and Personal Banking unit.71 The consolidation trend is likely to continue,driven by firms interest in achieving scale,operational efficiencies,and diversification through new capabilities.IMPACTThe trend to build competitive advantages through scaling products and services,distribution,systems,or
211、 operating models has become,and will continue to be,a strategic imperative in 2023 and beyond.In their quest to expand scale and scope to remain competitive,we expect to see a reorganization of business lines across WM firms.As firms grow through M&A,they may find that scale alone cannot ensure suc
212、cess.Scope partnerships will become more critical,with the emergence of WealthTech players that serve new and end-to-end wealth management markets.For firms seeking organic growth,enhancing the advisor workforce and building a better customer experience through a revamped front office will be essent
213、ial.Wealth Management Top Trends 202329FAMILY OFFICES SHOWCASE BESPOKE SERVICES WHILE FACING REGULATORY DYNAMICSHistorically,family offices have demonstrated a long-term vision for multigenerational wealth through all-in-one-place convenience and hyper-personalized services.CONTEXTFamily offices are
214、 becoming popular within some high-net-worth investment circles.These offices have existed for centuries but are now emerging as sophisticated players in the wealth ecosystem.Over the years,family offices have earned a reputation as a reliable option by offering clients customized investment strateg
215、ies.However,emotional connection and personal understanding now drive their success.A small,Texas-based family office initiated Elon Musks tumultuous USD44 billion Twitter buy-out effort in April 2022.72 CATALYSTSWhats fueling the growth of family offices?Key factors are emotional understanding,seam
216、less communication,sound execution,and significantly lower service costs than traditional firms.73 About 10,000 family offices worldwide manage nearly USD7 trillion(8%)of global HNWI wealth;and in terms of revenue,the family office market is on track to achieve a 6.01%CAGR(20212026).74 The World Wea
217、lth Report 2022 revealed that 23%of HNWIs and 33%of ultra HNWIs use family offices to manage their wealth.60%of tech-wealth HNWIs prefer family offices over WM firms.Family offices are proliferating as next-gen clients eye investment diversification,bespoke service,and a personal touch.IN A NUTSHELL
218、Family offices win customer trust and confidence through services that do not include product sales but instead feature the coordination,advice,monitoring,analysis,and assessment of clients investment choices.They attract new business with a long-term wealth creation approach and customized solution
219、s built through a deep understanding of each clients vision.52%of HNWIs interviewed as part of the World Wealth Report 2022 said they prefer family offices because of their one-stop-shop convenience and personalized services,while 49%said they appreciated family offices service costs compared with t
220、raditional WM firms.Typically unregulated,family offices will likely face strategic reevaluation as compliance mandates change.For example,challenging new regulations are going into effect,such as the US Corporate Transparency Act,which requires all entities formed in or registered to do business in
221、 the US to report beneficial ownership information to the Financial Crimes Enforcement Network.75 Family offices may benefit from new regulations that can open business avenues that enable co-investments with other families in the network.In Europe,the Markets in Financial Instruments(MiFID II)requi
222、rement obliges banks to provide access to their dynamic data previously protected in standardized reports.And that means family offices could make better-informed investment decisions by retrieving and utilizing the data and other information sources.76 Tax exemption measures for new family offices
223、in Singapore may attract high-net-worth families with significant AUM.77TREND 10Wealth Management Top Trends 202330Figure 9.Family offices are evolving with a more holistic approachFamily offices:mutigenerational engagementValue-addedservices/one-stopshopEmotion-basedinvestmentstrategyRegulatorysupp
224、ort/pushSource:Capgemini Research Institute for Financial Services Analysis,2022The three-party relationship between the client,the asset manager,and the family office is not about competing for the client but about ensuring maximum value for the client.”Franois SimonPresident and Co-founder,Agami F
225、amily Office,Paris,FranceThe role of the family office surpasses strategic asset allocation.It brings discipline,pedagogy,and intimacy to clients,whereas WM firms main objective is to deliver transactions to clients.”douard HerboCo-founder Keepers,Family Office,Lille,m FranceIMPACTWe expect a trend
226、in which family offices become central hubs that provide a wide range of services,from managing wealth,to preparing the next generation for succession,to counseling,legal advice,tax planning,insurance,healthcare,and event planning.As family offices become increasingly popular,they can enhance the mi
227、ssion-driven image of the wealth management industry by co-creating innovative products and services featuring verifiable and measurable impact.Furthermore,family offices can lead the industry by educating and expanding the WM ecosystem to generate positive,measurable social and environmental impact
228、,and financial return.Wealth Management Top Trends 202331CONCLUSIONThe year ahead presents a challenging investment environment.Risk costs will rise for investors,global equity markets are uncertain,and unsteady real estate prices may make it difficult for wealth management firms to generate superio
229、r investment returns for their clients.Competition is more open than ever,and unpredictable market volatility pushes wealth management firms to find new ways to grow.As a result,they are urgently reevaluating business models to differentiate their offerings amid sustained margin pressure and shiftin
230、g client demands.Influential new segments,including women and the mass affluent,have unique expectations and preferences.Meanwhile,most all clients increasingly are asking for digital-first engagement and seamless customer experiences.New technologies,global economic and geopolitical scenarios,and p
231、andemic-induced behavioral changes are driving demand for hybrid advisory(digital and physical)capabilities with real-time personalization of products and services.The advent and widespread proliferation of cutting-edge technologies,fluctuating investor asset allocation preferences,and demographic s
232、hifts will reshape the landscape in which incumbent wealth management firms and WealthTechs operate.Further,we anticipate more regulatory clarity around sustainable investment frameworks and accountability.To succeed in this challenging environment,wealth management firms must prioritize growth stra
233、tegies,adopt innovative business models and mindsets,and be able to alter resources swiftly in response to dynamic market conditions.Finally,increasing regulatory burdens,new business models,and overwhelming competition from non-traditional players BigTechs,WealthTechs,and others will further escala
234、te the magnitude of industry disruption.Wealth Management Top Trends 202332Wealth Management Top Trends 202333ASK THE EXPERTSCarina SchaurteHead of Financial Services,Capgemini Invent,SCarina has 20 years of wealth management experience,working for leading global and Swiss private banks and as a str
235、ategy advisor for wealth and asset managers.She has supported front-office transformations,developing new investment and advisory offerings and pricing,and private banks ESG investing approaches.At Capgemini,she works with clients to transform business models into more sustainable and innovative bus
236、inesses.Tatiana CollinsHead of Financial Services,Invent ATatiana is a leading wealth management APAC expert specializing in digital transformation and new business models.She has dedicated most of her career to helping leading retail banking and wealth management players transform their operating m
237、odels,advising on emerging needs related to growth,innovation,and digital change across Europe and Asia.Nilesh VaidyaGlobal Head of Banking and Capital Markets Practice Nilesh has been with Capgemini for 20+years and is an expert in managing clients digital journeys in core banking transformation,pa
238、yments,and wealth management.In addition,he works with clients to help them launch new banking products and underlying technology.Marie Wattez Global Head of Private Banking&Wealth Management Marie leads Capgeminis Private Banking&Wealth Management capabilities globally.She has helped major banks de
239、fine their strategy and transform and turn around their business,operating models,and technology platforms across HNWIs,mass affluent,and family offices.Sandeep KurneDigital Strategy&Transformation lead Sandeep is a Digital sStrategy&Business transformation executive with 22 years of global experien
240、ce building,reengineering,and positioning firms for profitable growth and shareholder value creation in the digital age.He collaborates with traditional and FinTech firms across banking,wealth management,and capital markets to drive strategic,complex digital core initiatives leveraging global allian
241、ces.Roy CrocianiBanking&WM Leader,APAC Roy has extensive experience working in and across retail and commercial banking,wealth and asset management,digital transformation,and FinTech startups and scale-ups.He is passionate about leveraging technology to transform and create new businesses and delive
242、r great products and services to clients.Wealth Management Top Trends 202334Ashutosh KukretiProgram Manager,Wealth Management,Capgemini Research Institute for Financial SAshutosh leads Wealth Management thought leadership in the Market Intelligence team.He has experience in consulting,product,and pr
243、ogram management across FinTech and wealth management domains.Abhishek SinghWM Practice Head,North AAbhishek offers clients wealth management leadership and Capgemini collaboration with industry-leading partners to deliver innovative wealth management solutions.He has over 20 years of financial serv
244、ices experience,working primarily in wealth management and corporate banking.Tej Vakta Global WM Leader&Head of ESG STej is a global wealth management industry leader and head of Capgeminis ESG solutions,with 25+years of diverse FS experience as a transformation expert and business-driven tech execu
245、tive.He partners with CxOs worldwide to develop innovative growth strategies and execute enterprisewide transformation while integrating sustainability measures.Elias GhanemGlobal Head of Capgemini Research Institute for Financial Services Elias directs Capgeminis global portfolio of financial servi
246、ces thought leadership.He has more than 20 years of experience in FS,focusing on effective collaboration between banks and the startup ecosystem.Chirag ThakralHead of Banking&Capital Markets,Capgemini Research Institute for Financial SChirag leads Market Intelligences Banking,Payments,and Capital Ma
247、rkets domains.He has over 15 years of experience as a strategy and thought leadership professional with in-depth financial services expertise with a decade-long wealth management focus.Wealth Management Top Trends 202335KEY CONTACTSGlobalIan Campos Nilesh Vaidya Marie Wattez Stanislas de Roys de Led
248、ignan Asia(China,Hong Kong,Singapore)Ravi Makhija Tatiana Collins Australia Roy Crociani Susan Beeston Belgium and the Netherlands Stefan van Alen Alexander Eerdmans Ben Weekers FranceNicolas Croquet Maxime Gaudin Austria,Germany,SwitzerlandSvend Erik Kundby-Nielsen svenderik.kundby-nielsen Carina S
249、chaurte IndiaDevendra Tripathi Kamal Misra Italy Monia Ferrari Lorenzo Busca JapanKoichi Shirasaki Makiko Takahashi Latin AmericaDavid Cortada Gras Middle East Bilel Guedhami Vincent Sahagian Nordics(Finland,Norway,Sweden)Saumitra Srivastava Johan Bergstrom SpainAndres Alvarez Blanco andres.alvarez-
250、M Carmen Castellvi Cervello United KingdomGeetha Ramakrishnan Basak Alhan-Aydin basak.alhan-United StatesTej Vakta Sandeep Kurne Wealth Management Top Trends 2023 36ACKNOWLEDGMENTSWe want to thank the following teams and individuals for helping to create,produce and promote Wealth Management Top Tre
251、nds 2023:Elias Ghanem,Chirag Thakral,and Luca Russignan for their overall leadership for this years report.Tamara McKinney Berry for editorial support and content guidance.Dinesh Dhandapani Dhesigan for graphical interpretation and design.Surabhi Chopra for her research support.Marion Lecorbeiller,D
252、avid Merrill,Swathi Raghavarapu,Meghala Nair,Sai Bobba for their overall marketing leadership for the report,and the Creative Services Team for producing the report:Sushmitha Kunaparaju,Balaswamy Lingeshwar,and Anupriya Andhorikar.MARKET INTELLIGENCE LEAD ANALYSTSunil Burkul Industry Analyst,Wealth
253、Management Capgemini Research Institute for Financial ServicesWealth Management Top Trends 202337ENDNOTES1.Bloomberg,“ESG assets may hit$53 trillion by 2025,a third of global AUM;”February 23,2021.2.Banking Exchange,“Global ESG Assets to Hit$50 Trillion by 2025;”January 25,2022.3.Bloomberg,“Debt Iss
254、uers Wonder If ESG Label Is Worth It as Skepticism Spreads;”August 22,2022.4.Statista,“Distribution of ESG fund assets worldwide as of December 2021,by region;”May 23,2022.5.European Climate Org,“The Fit For 55 package at a glance;”April 5,2022.6.Banking Exchange,“Global ESG Assets To Hit$50 Trillio
255、n by 2025;”January 25,2022.7.Blackrock,“BlackRocks 2030 net zero statement;”2022.8.Reuters,“Vanguard commits$290 billion of assets to be net-zero by 2050;”May 26,2022.9.Northern Trust,“Is Regulation a Tailwind for Greater ESG Adoption?;”May 31,2022.10.Ibid.11.Seyfarth,“Further Guidance on Enhanced E
256、SG Disclosures in Hong Kong Financial Markets;”April 11,2022.12.Northern Trust,“Is Regulation a Tailwind for Greater ESG Adoption?;”May 31,2022.13.Institutional Investor,“Growing Outsourced Chief Investment Officer industry intensifies market competition for managers,consultants;”January 25,2022.14.
257、Chestnut Advisory Group,“The Widespread Impact of OUTSOURCED CHIEF INVESTMENT OFFICERS Growth;”January 2022.15.Private Banker International,“BNY Mellon,Maybank to collaborate on model portfolio services;”accessed October 14,202216.City Wire Selector,“Schroders takes on Outsourced Chief Investment Of
258、ficers mandate for 12bn pension schemes;”April 5,2022.17.News Wire,“WorkSafeNB Selects SEI as Outsourced Chief Investment Officer;”June 13,2022.18.Globe Newswire,“Global Digital Asset Management Market Report 2022:Market to Reach 8 Billion by 2027 from$4.2 Billion in 2022-Infusion of Advanced Encryp
259、tion Technologies to Streamline Digital Trading;”May 3,2022.19.Indian Express,“HSBC launches metaverse portfolio for wealthy Asian clients;April 6,2022.20.Funds-Europe,“AXA IM launches metaverse fund;”April 12,2022.21.Financial Times,“Crypto demand from wealthy clients puts pressure on managers;”Nov
260、ember 29,2021.22.Nasdaq,“Nasdaq and Hashdex Launch Digital Assets Curriculum for Financial Advisors;”March 3,2022.23.Bank of America,“Bank of America is First in Industry to Launch Virtual Reality Training Program in Nearly 4,300 Financial Centers;”October 7,2021.24.Forbes,“Ric Edelmans New Project
261、Teaches Advisors About Digital Assets;”April 27,2022.25.Financial Advisor Magazine,“High-Net-Worth Assets Shifting Into Private Equity Funds;”August 25,202526.WealthM,“Direct Indexing to Grow Faster Than ETFs,SMAs and Mutual Funds;”October 15,2021.27.Preqin,“Alternatives in 2022;”January 12,2022.28.
262、The Straits Times,“Goldman readies$40.6 billion for alternative investments in Asia;”November 11,2021.29.City Wire USA,“BlackRock takes stake in$2.5bn boutique,boosts SMA firepower;”July 13,2021.30.Vanguard news release,“Vanguard completes acquisition of Just Invest;”October 1,2021.31.S&P Global,“BN
263、Y Mellon completes purchase of Optimal Asset Management;”February 28,2022.32.Blackrock,“BlackRock Completes Acquisition of Aperio;”February 1,2021.33.Oliver Wyman,“Competing for Growth Four factors enabling HNW growth in private markets;”June 2021.34.Fortune,“Blackstone plans fund for people with mi
264、llions,not billions;”March 20,2022.35.Finextra,“Direct indexing Bolstering clients demand for affordable hyper-personalized investments;”August 29,2022.36.Credit Suisse,“Global Wealth Report,2021;”June 2021.37.Private Banker International,“UBS snaps up digital disruptor Wealthfront;”February 24,2022
265、.38.Private Banker International,“Blackstone looking to almost double private wealth team;”October 27,2021.39.Private Banker International,“HSBC plans hiring spree in China wealth management unit;”May 27,2022.40.DBS,“DBS fortifies NAV Planner with AI-powered investment advisory feature;”April 14,202
266、1.41.Citywire,“Lloyds targets mass affluent with new digital wealth service;”February 25,2022.42.Insurance NewsNet,“Mass Affluent Investors Demanding More Complex Financial Products;”May 16,2022.43.Forbes,“The Top Richest Women In The World 2022;”April 5,2022.44.Morgan Stanley,“Women,Wealth and Inve
267、sting A story of evolution;”June 28,2022.45.Bloomberg,“Womens Wealth Is Growing.When Will Finance Catch Up?;”July 31,2022.46.Business Standard,“Womens investible wealth grows more than that of men,shows data;”March 4,2022.47.Marmot,“What We Do;”Accessed September 2022.48.Marmot,“Finance,Company Pric
268、ing;”Accessed September 2022.49.Forbes,“Sallie Krawcheck Leads Ellevest To A Landmark$1 Billion In Assets Under Management;”March 23,2021.50.Asian Private Banker,“Digital makeover at HSBC GPB will be scaled for the wider wealth continuum;”December 13,2021.51.BNPP,“BNP Paribas Wealth Management furth
269、er expands its digital services offering and launches a new solution dedicated to investing in private assets;”June 29,2022.52.Goldman Sachs,“Goldman Sachs and AWS Collaborate to Create New Data Management and Analytics Solutions for Financial Services Organizations;”November 30,2021.53.Banking Jour
270、nal,“The case for one-click compliance to fight cyber-attacks;”April 14,2022.54.Vmware,“Modern Bank Heists 5.0:The Escalation from Dwell to Destruction;”April 20,2022.55.Bleeping Computer,“Morgan Stanley client accounts breached in social engineering attacks;”March 24,2022.56.CNBC,“Bank of America s
271、pends over$1 billion per year on cybersecurity,CEO Brian Moynihan says;”June 14,2021.57.CNET“Robinhoods$20 Million Data Breach Settlement:How Much Money Could You Be Owed?;”September 8,2022.58.NYTimes,“J.P.Morgan is fined$200 million after staff used personal chats for company business;”December 17,
272、2021.59.Diginomica,“Bank of America now selling more digitally than in person-tech budget increases to$3.6 billion;”April 19,2022.60.FiNews Asia,“HSBC adds digital investment tools to woo millennials;”October 6,2021.61.Hubbis,“HSBC enhances digital investment solutions empower millennials in wealth
273、management;”October 6,2021.62.Technology Record,“BNY Mellon uses Microsoft Azure for data and analytics solution;”February 21,2022.63.MarketsMediaGroup,“Credit Suisse Invests in AI-Driven Data Extraction Firm;”July 19,2021.64.Barrons,“Despite Market Downturn,Wealth Management M&A Still Red Hot;”July
274、 19,2022.65.Ibid.66.Goldman Sachs,“Goldman Sachs Completes Acquisition of NN Investment Partners;”April 11,2022.67.Amundi,“Finalisation of Lyxor acquisition;”January 4,2022.68.Wealth Briefing,“Deals of The Day:The Latest In Wealth Management M&A EQT Buys Baring Private Equity Asia;”March 18,2022.69.
275、Pionline,“Morgan Stanley acquires Cook Street Consulting;”February 11,2022.70.Citi,“Citi Unifies Global Wealth Management Business;”January 13,2021.71.International Finance,“HSBC combines wealth and retail banking to create new global business;”March 3,2020.72.CNA,“Funding obscured:The family office
276、 behind Musks US$44 billion Twitter buyout;”April 26,2022.73.Globe Newswire,“Global Digital Asset Management Market Report 2022:Market to Reach$8 Billion by 2027 from$4.2 Billion in 2022-Infusion of Advanced Encryption Technologies to Streamline Digital Trading;”May 3,2022.74.GlobalNewsWire,“The fam
277、ily office market by revenue is expected to grow at a CAGR of 6.01%during the period 2021 2026;”January 25,2022.75.Family Capital,“Family offices face regulatory hurdle with new transparency act;”February 8,2022.76.Nasdaq,“Nasdaq and Hashdex Launch Digital Assets Curriculum for Financial Advisors;”M
278、arch 3,2022.77.Asian Investor,“Singapores tougher family office rules likely to attract more wealth;”April 26,2022.Wealth Management Top Trends 202338About CapgeminiCapgemini is a global leader in partnering with companies to transform and manage their business by harnessing the power of technology.
279、The Group is guided everyday by its purpose of unleashing human energy through technology for an inclusive and sustainable future.It is a responsible and diverse organization of over 350,000 team members in more than 50 countries.With its strong 55-year heritage and deep industry expertise,Capgemini
280、 is trusted by its clients to address the entire breadth of their business needs,from strategy and design to operations,fueled by the fast evolving and innovative world of cloud,data,AI,connectivity,software,digital engineering and platforms.The Group reported in 2021 global revenues of 18 billion.G
281、et the Future You Want|DisclaimerThe information contained herein is general in nature and is not intended,and should not be construed,as legal,tax,investment,financial,or professional advice or opinion.This document does not purport to be a complete statement of the approaches or steps,which may va
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