1、Intelligent strategies for winning with the ultra-wealthyBridge wealth management and family office strengths to fuel growthWorld Report Series 2024Wealth Management2Foreword 3 Executive Steering Committee 2024 4Executive summary 5Navigate HNWI wealth recovery during uncertain times 6 Leveraging beh

2、avioral finance to reconnect with HNWIs 18 Ultra-HNWIs:The most lucrative segment to attract and retain 30 Conclusion 40 Methodology 41 Partner with Capgemini 43ContentsWorld Wealth Report 2024ForewordWe are back in business!While researching,analyzing,and writing the World Wealth Report 2024,our 28

3、th edition of this report,we discovered a significant investment shift:globally,high-net-worth individuals(HNWIs)are reaching unprecedented numbers and wealth levels.And,as wealth grows,HNWIs are revisiting cautious 2022 and 2023 asset preservation tendencies.Risk aversion is subsiding,and HNWIs are

4、 slowly rebalancing between safety and growth.Despite this emerging positive trend,the global environment is not so bright,with issues ranging from geopolitics to inflation.Uncertainty is further compounded as many countries hold elections in 2024.As the market upswing unfolds,the time has come for

5、wealth management firms to dive deep into clients evolving behavior and expectations,and to prioritize meaningful and timely engagements.The road ahead isnt without hurdles:macroeconomic uncertainty,geopolitical tensions,regulatory agenda and a rise in operating costs are squeezing the bottom line.L

6、ike in all other sectors,artificial intelligence(AI)is fast emerging as a transformative force to enhance client intimacy in wealth management.From creating and then regularly updating 360-degree client profiles to leveraging behavioral finance techniques,AI is promising to help relationship manager

7、s recognize psychological biases that may influence investment decision-making.Moreover,generative AI can enable hyper-personalization,allowing firms to tailor service touchpoints to clients unique needs,preferences,and life events.The result?Moments-that-matter engagement and the foundations of sol

8、id,long-lasting relationships.More than ever,wealth management firms seek sustained profitability,and the highly concentrated ultra-HNWI segment individuals with more than USD 30 million in investable assets presents a highly lucrative opportunity.However,family offices may be better prepared to pla

9、y the orchestrator role and handle the multi-generational and multi-jurisdictional needs of this population,through a broad range of financial and non-financial value-added services.So the game is on:who can be the best provider of the one-stop-shop service suite needed to best serve the ultra-wealt

10、hy?While competing is one option,collaborating or servicing is another and wealth firms that strike a competitive and collaborative balance with family offices can forge revenue-generating business partnerships supporting the family firms.I hope our report offers a path to help you get started.Anirb

11、an Bose Financial Services Strategic Business Unit CEO&Group Executive Board Member,Capgemini3World Wealth Report 2024Executive Steering CommitteeArnaud PicutCEO AixigoChristine CirianiHead of International Digital Wealth InvestCloudToby BrownHead of Global Banking SolutionsGoogleNoah KraehenmannGlo

12、bal MD Wealth ManagementTemenosChristian StadtmllerManaging Director HQ TrustSbastien CaptCEO Prime PartnersPhilippe PerlesCommittee Member Association of Swiss Asset and Wealth Management BanksUrs BoltWealthTech Expert Bolt MoneyYann GaletMFO Founder and Family Officer G Consult FinancesMichelle Ow

13、enGlobal Head of Distribution,Global Private BankingHSBCPierre RamadierCEO,Wealth Management International Markets BNP ParibasRaymond AngGlobal Head,Private Bank and Affluent ClientsStandard CharteredBarry MetzgerManaging Director,Income and Wealth Solutions Charles SchwabKabir SethiWealth Managemen

14、t Leader Ex-LPL FinancialGreg GatesmanHead of International Client Development,Wealth Management Americas UBSNic DreckmannCEO a.i.Julius BaerMichel LonghiniGroup Head,Global Private Banking First Abu Dhabi BankRanjit S SamraHead of Product&ExperienceJ.P.Morgan Wealth ManagementWealth Management Firm

15、sWealthTechs and Tech Leaders Family Offices,Industry Bodies,and Experts4World Wealth Report 2024Executive summaryThe global economy continues to recover from 2022 challenges.Although interest rates remain elevated,central banks signaled an end to rate hikes in H2 2023,with prospects of rate cuts la

16、te this year or in early 2025.Navigate HNWI wealth recovery during uncertain timesBuoyed by a resurging equity market and improving macroeconomics,global high-net-worth individual(HNWI)wealth and population rose by 4.7%and 5.1%in 2023.North America posted the most robust recovery,expanding by 7.2%in

17、 HNWI wealth and 7.1%in HNWI population.Asia-Pacific experienced 4.2%HNWI wealth growth and a 4.8%rise in HNWI population.European HNWI wealth and population grew more modestly,at 3.9%and 4.0%,respectively.Despite ongoing market unpredictability,HNWIs are rebalancing their portfolios to meet growth

18、goals.In January 2024,cash holdings normalized to 25%,down from multi-decade highs.Allocations to alternative assets rose to 15%from 13%in 2023,reflecting investor desire to diversify into high-return asset classes.However,wealth management firms continue to struggle with profit uncertainty because

19、of escalating geopolitical conflicts,elections in major economies,recession worries,evolving interest rates,and choppy stock market trading.Further,net interest income,which has been high in recent years,is expected to decline,and asset prices are unlikely to grow as rapidly as in the past decade.As

20、 a result,wealth management firms seeking to sustain business growth are focusing strategically on winning ultra-wealthy investors mind share and share of wallet.Leveraging behavioral finance to reconnect with HNWIsBehavioral finance techniques come into play during market volatility as relationship

21、 managers work to balance clients emotions and cognitive biases while at the same time offering personalized advice.More than 65%of the HNWIs we polled said biases impact their decision-making.Wealth firms are often data rich,but they struggle to fully leverage client information because of their re

22、liance on primary sources and outdated investor profiles.More and more,wealth management firms are integrating behavioral finance concepts with artificial intelligence to enable a data-centric approach that generates superior client experiences.Among the wealth management firms we surveyed,49%curren

23、tly use AI in some areas,and 73%of them plan to increase adoption at the enterprise level within the next one to two years.Generative AI further elevates these capabilities,paving the way for hyper-personalized engagement.Behavioral finance/AI integration has the potential to revolutionize the wealt

24、h management value chain,enhancing customer intimacy and improving advisor efficiency with intelligent capabilities.Ultra-HNWIs:The most lucrative segment to attract and retainWith a growing population of younger,self-made ultra-high-net-worth individuals(UHNWIs),investment styles are shifting in fo

25、cus to long-term wealth growth despite continued market uncertainty.As wealth grows,complexity increases,and value-added services become a crucial differentiator for UHNWI investors.78%of surveyed ultra-HNWIs consider value-added services essential to wealth management firm relationships.Wealth mana

26、gement firms typically focus on financial value-added services,while family offices enjoy an edge in non-financial value-added services.Increasingly,family offices earn client family loyalty through close interactions and generational relationships.And for incumbent wealth management firms,that mean

27、s growing competition for UHNWI wallets.According to our survey,the number of UHNWI wealth management relationships increased from three in 2020 to seven in 2023.Based on our reports research findings and analyses,we recommend that wealth management firms become one-stop shops providing a full suite

28、 of products and services.This transformation will require integrating internal teams with third-party partners to orchestrate a broad and efficient ecosystem that conveniently delivers services through clients preferred channels.While in-person interactions continue to be crucial,the importance of

29、digital channels is growing,and client-centric wealth management firms need to provide omnichannel and hyper-personalized experiences.Strategic collaboration with family offices offers wealth firms a path to tailored services that can unlock new revenue streams.5World Wealth Report 2024 Navigate HNW

30、I wealth recovery during uncertain times6World Wealth Report 2024 Macroeconomic uncertainty and geopolitical tensions led to significant declines in high-net-worth individual(HNWI)wealth(3.6%)and population(3.3%)in 2022.However,2023 brought economic growth and improved fortunes for major investment

31、sectors to reverse the falloff.Despite ongoing interest rate uncertainty and rising bond yields,equities surged along with the tech market,fueled by enthusiasm for generative AI and its potential impact on the economy.Though interest rates remain elevated,central banks signaled an end to rate hikes

32、in H2 2023,with prospects for rate cuts in 2024.Switzerland became the first major economy to hit the rate-cut button in March 2024,announcing a 25 basis point reduction.1 A poll by Reuters in April 2024 showed that the majority of surveyed economists expect a maximum of two rate cuts in 2024.2 Simi

33、larly,the European Central Bank(ECB)announced rate cuts to begin in June 2024.3 Equity markets improved in 2023,and global indices exhibited resilience driven by better-than-expected corporate earnings,economic recovery in some key markets,and signals of more accommodating monetary policies.The macr

34、oeconomic climate in 2023 sparked the equity market upswing,with global indices indicating a bull market.The MSCI All Country World Index was up nearly 23%in 2023,powered by outsized contributions from the so-called US“Magnificent Seven”tech stocks(Alphabet(GOOGL),Amazon,Apple,Meta,Microsoft,Nvidia,

35、and Tesla).These stocks contributed nearly 40%of the total return of the MSCI All Country World index.4 Since the beginning of 2024,some of the magnificent seven stocks have fallen,with returns in 2024 led by the so-called Fab Four stocks:Nvidia,Meta,Amazon,and Microsoft.5 In the United States,the S

36、&P 500 ended the year with a 24%gain,while the Nasdaq Composite was up nearly 43%,driven by revitalized tech stocks.6 Interest in AI catalyzed the tech rally,bolstering US equities.In Europe,the CAC 40 in France ended the year with a nearly 17%gain,driven by strong growth in the countrys luxury good

37、s market.The luxury goods conglomerate LVMH,owner of the Louis Vuitton brand,reported over a 9%gain in revenues in 2023,and the French luxury brand Hermes saw its share price increase by 38%in 2023.7 8 9 The UK domestic-focused FTSE 250 saw relatively modest returns,gaining only 4.5%through the year

38、,against headwinds including a lack of tech companies,a sluggish economy,and political uncertainty.10 11 The Asia-Pacific market generated mixed returns,with the Japanese Nikkei witnessing a 28%return driven by impressive returns by automotive stocks.12 Meanwhile,in China,the Shanghai Composite decl

39、ined by nearly 4%:13 a disappointing economic recovery and a troubled property sector led to Chinas poor performance.We have observed continued market volatility in 2024,emphasizing the need for sophisticated investment strategies to navigate uncertainties.While risks persist,opportunities remain am

40、idst evolving market dynamics.”Greg Gatesman Head of International Client Development,Wealth Management Americas,UBS,USA7World Wealth Report 2024Figure 2.2023 Global HNWI population surpasses 2021 highsSource:Capgemini Research Institute for Financial Services Analysis,2024.Note:Chart numbers and qu

41、oted percentages may not total 100%due to rounding.Annual growth 20222023:5.1%HNWI population in millionsCAGR 20162023:4.7%change 20222023-0.1%Africa2.7%Latin America 2.1%Middle East4.0%Europe 4.8%Asia-Pacific7.1%North America200022202325201510050.60.616.50.24.55.55.20.60.718.1

42、0.24.86.25.70.60.718.00.24.86.15.70.60.819.60.25.26.56.30.60.820.80.25.46.97.00.60.922.50.25.77.27.90.60.921.70.25.67.17.40.60.922.80.25.87.47.9Figure 1.HNWI wealth recovers from 2022 lossesSource:Capgemini Research Institute for Financial Services Analysis,2024.Note:Chart numbers and quoted percent

43、ages may not total 100%due to rounding.1.563.588705335002.02.414.718.818.070.21.78.72.515.921.619.879.61.73.217.524.024.374.01.78.88.886.01.83.418.825.327.79.083.01.93.418.224.725.69.286.81.83.518.925.727.59.42.916.722.221.768.11.68.42.615.420.619.6Annual growth 2022

44、2023:4.7%HNWI financial wealth in USD trillionsCAGR 20162023:4.6%change 20222023-1.0%Africa2.3%Latin America 2.9%Middle East3.9%Europe 4.2%Asia-Pacific7.2%North AmericaLifted by rebounding stock markets and a brighter economic outlook,global HNWI wealth expanded by 4.7%in 2023(Figure 1).Mirroring th

45、e wealth recovery,the HNWI population rose by 5.1%(Figure 2),erasing 2022 declines of 3.6%and 3.3%,respectively,and putting HNWI trends back on a growth path.8World Wealth Report 2024North America retained its top spot in HNWI wealth and populationNorth American HNWI statistics vigorously recovered

46、in 2023,with year-over-year growth of 7.2%for wealth and 7.1%for population.Solid economic resilience,cooling inflationary pressures,and a formidable US equity market rally all drove upward momentum.The US HNWI segment experienced 7.4%wealth expansion and 7.3%population growth.US equity markets regi

47、stered strong returns in 2023,driven mainly by final-quarter gains:the S&P 500 posted a return of over 24%in 2023,gaining 11.2%in Q4 alone.A tech stock rally drove S&P index returns,including Nvidia(239%growth)and Meta(up 194%).14 A slew of US government-led spending initiatives to boost onshore man

48、ufacturing contributed to capital growth.The CHIPS Act and the Inflation Reduction Act,announced in August 2022,led to over USD 230 billion in private-sector spending for the semiconductor manufacturing industry and USD 201 billion in construction spending.15 16 US government spending in 2023 also s

49、purred manufacturing investment activity in the private sector and helped augment GDP.The US GDP grew at an annualized rate of 3.3%in the last quarter of 2023,well above the 2%growth that economists had expected.Inflation also fell from 9%in June 2022 to 3.4%in December 2023.17 The accommodative sta

50、nce taken by the US Federal Reserve System could potentially steer the US economy to a soft landing.In Canada,HNWI wealth grew by 3.8%and the HNWI population climbed by 3.6%.The Canadian S&P/TSX index recovered from its 2022 tumble and posted an 8%2023 return.The tech sector led TSX gains,soaring ne

51、arly 57%.18 Yet the S&P/TSX index performance was modest as compared with the US S&P because of the lackluster performance in cyclical industries including the materials sector,which dropped nearly 3%during the year.19 Moderate APAC wealth and population growth widened the gap with North AmericaThe

52、Asia-Pacific(APAC)HNWI segment experienced a 4.2%wealth growth and a 4.8%population growth in 2023.APAC equity market returns were mixed,with some markets reporting recoveries while others declined.The MSCI Asia Pacific index,which tracks Asian firms across developed and emerging countries,posted 20

53、23 growth of about 12%,even as disappointing Chinese stocks dragged down returns.20 Chinas blue-chip CSI 300 index fell more than 11%in 2023,while Hong Kongs Hang Seng(a barometer of the Hong Kong equity market)fell almost 14%.With many companies in the Hong Kong equity market leveraged to economic

54、growth in China,the index returns mirrored Chinese market shortfalls.The Hong Kong Central Banks interest rate hike exacerbated the situation.Among the best performers in the APAC region were India and Australia,which recorded HNWI wealth growth of 12.4%In 2024,we anticipate a slight global economic

55、 slowdown,led by weakness in the US in the second half.Despite this,sentiment towards investing has been positive so far this year,with clients showing significant interest in increasing their investments,aware that interest rates have likely peaked.However,as we move into the latter half of the yea

56、r,especially with various elections taking place globally,there may be increased uncertainty for clients.While the first half appears promising,the second half could bring about more unpredictability.”Raymond Ang Global Head,Private Bank and Affluent Clients,Standard Chartered,Singapore9World Wealth

57、 Report 2024and 7.9%,and HNWI population growth of 12.2%and 7.8%,respectively.Wealth growth in both of these countries was driven by a resilient economy and robust performance of the equity markets:the Indian benchmark index,the Sensex,climbed by over 18%in 2023,21 and the Australian S&P/ASX200 inde

58、x gained 7.8%during the year.22 Japans HNWI wealth and population both increased in 2023,by 6.5%and 6.4%,respectively,driven by a cautious stance by the Bank of Japan,a steady flow of foreign investment into the market,and robust earnings by Japans automotive sector.The Japanese Nikkei 225 emerged a

59、s the top Asian performer in 2023,surging over 28%to hit a 33-year high in January 2023.23 European growth curtailed by persistent macroeconomic challengesEuropean HNWI wealth and population grew modestly compared with North America and APAC in 2023.European HNWI wealth rose 3.9%,while the populatio

60、n grew 4.0%.High but cooling inflation,a low GDP growth rate,and declining domestic demand were limiting factors in the regions HNWI wealth and population growth.Against several headwinds,some respite was provided by equity market outperformance,steadily declining energy prices,and a pause in rate h

61、ikes by the European Central Bank(ECB).Despite a strong showing in the equity market,with the STOXX Europe 600 index gaining nearly 13%in 2023,the eurozone economy faces continued challenges.24 The composite Purchasing Managers Index(PMI),a key indicator of business activity,fell to 47.0 in December

62、 2023,marking a seven-month decline and signaling a euro area contraction.25 Notable outliers to the modest HNWI wealth and population growth in Europe were Italy,where wealth grew by 8.5%and population by 8.4%,driven by equity market returns and a tourism uptick,26 and France,where wealth and popul

63、ation grew 6.5%and 6.4%,respectively,benefited from a record year for tourism,strong growth in the luxury goods industry,and an uptick in exports.27 28 HNWI wealth also expanded in Switzerland(5.6%),Denmark(4.5%),the United Kingdom(2.9%),and Germany(2.2%).Suboptimal 2023 outcomes in Africa,Latin Ame

64、rica,and the Middle EastLatin America and the Middle East recorded limited HNWI 2023 growth,with wealth up 2.3%and 2.9%,and population up 2.7%and 2.1%,respectively.In the Middle East,falling crude futures prices,geopolitical tensions leading to supply disruptions,and weakening demand for OPEC crude

65、in global markets drove the muted growth.29 Year-over-year oil futures dipped 10%+as compared with 2022.30 A 2023 anomaly,Africa was the only region where HNWI wealth(-1.0%)and population(-0.1%)fell driven by falling commodity prices and declining foreign investments and exports.In South Africa,an e

66、nergy crisis sparked by persistent power outages led to a falloff in manufacturing output,resulting in a meager 0.6%GDP growth.31 With African investment and business activity closely linked with China,the Chinese slowdown rippled across African markets,too.32 HNWI wealth and population grew across

67、all wealth bandsIn 2022,HNWI wealth and population fell across wealth bands,with the ultra-high-net-worth individual(UHNWI)segment taking the brunt of the hit its population was down 4.6%and its total wealth down 3.7%.However,the 2023 recovery led to a revival of wealth and population totals across

68、all of the HNWI wealth band pyramid(Figure 3).Growth was highest for the“millionaires next door”wealth band(individuals holding wealth of USD 1 million to 5 million),while UHNWIs(those with USD 30 million+in assets)experienced the highest recovery in dollar terms,with 3.9%growth.UHNWIs are also the

69、most concentrated 1%of the total HNWI population holds 34%of global wealth10World Wealth Report 2024among the wealth bands,holding over 34%of total HNWI wealth and just over 1%of the total HNWI population.Therefore,UHNWIs represent potentially the most lucrative segment for wealth management firms.H

70、NWIs are shifting from wealth preservation to growth objectivesOur January 2024 survey of over 3,000 HNWIs across 25 markets found that their primary asset allocations had changed from preservation to growth.Two factors drove the shift:Governmental efforts to control inflation and rising interest ra

71、tes,despite hints of potential rate cuts in the future Changing economic conditions along with a turn in how HNWIs view assets with high growth potential,notwithstanding ongoing market volatilityEarly 2024 data reveal a normalization of cash holdings to 25%of portfolio totals,a stark contrast to the

72、 multi-decade highs of 34%seen in January 2023,when investors sought safety amid market uncertainty.HNWIs have begun to channel their cash into higher-return assets to leverage possible future growth opportunities.Global HNWI fixed-income portfolio allocations increased to 20%in 2023,a five percenta

73、ge point jump,year over year.Fixed-income assets were complicated in 2023,as high inflation diluted inflation-adjusted(real)returns from fixed-income assets even as interest rates were high,making them less lucrative for HNWI investors.However,the tide began to turn by Q4,and cooling inflation boost

74、ed fixed-income real returns.HNWI investors expect inflation to tone down further in 2024,even as elevated interest rates continue,making fixed income an attractive asset class.Figure 3.All HNWI wealth bands experienced growth in wealth and populationSource:Capgemini Research Institute for Financial

75、 Services Analysis,2024.Note:Chart numbers and quoted percentages may not total 100%due to rounding.HNWIpopulation growth2022-2023Share of totalHNWI wealthHNWI wealth growth2022-20235.0%5.0%5.2%34%220k(1.0%of total)2,075k(9.1%of total)20,533k(89.9%of total)23%43%3.9%4.9%5.2%Number of individuals(as

76、of Dec 2023)Ultra-HNWIUSD 30 million+Mid-tier millionairesUSD 530 millionMillionaires next doorUSD 15 millionBarry Metzger Managing Director,Income and Wealth Solutions,Charles Schwab,USAHNWIs,especially those with USD 10 million and above,prioritize utilizing fixed income instruments and tax optimi

77、zation in their wealth management strategies.They engage in bond ladders and seek specialized advice to leverage tax rules effectively.”11World Wealth Report 2024Figure 4.2024 HNWI asset mix is rebalancing between preservation and growthAlternative investments include commodities,currencies,private

78、equity,hedge funds,structured products,and digital assetsFixed income includes bonds,fixed annuitiesCash and cash equivalents include savings deposits,money market fundsSources:Capgemini Research Institute for Financial Services Analysis,2024;World Wealth Report 2024 Global High Net Worth Insights S

79、urvey,N=3,119.Note:Chart numbers and quoted percentages may not total 100%due to rounding.Change in asset allocation(Jan 2002-Jan 2024)25%14%21%27%28%25%24%24%34%25%30%21%29%16%18%17%18%18%15%20%15%24%18%17%16%15%15%15%15%19%20%31%25%31%26%30%30%29%23%21%10%10%7%9%13%13%14%14%13%15%Jan 2002Jan 2006J

80、an 2008Jan 2018Jan 2019Jan 2020Jan 2021Jan 2022Jan 2023Jan 2024Cash and cash equivalentsFixed incomeReal estateEquitiesAlternative investmentsRepresents a crisis yearChange in investments(%)#+2+4+5-9-2The 2023 real estate market presented a picture in contrasts.While commercial property valuations d

81、ipped,the luxury home segment thrived.Global HNWIs increased their real estate holdings by four percentage points,bringing their portfolio allocation up to 19%.Attractive valuations in commercial real estate and a renewed interest in acquiring secondary homes as a long-term investment fueled this sh

82、ift.Despite rising mortgage rates,global luxury real estate markets surged.Prime locations like London,New York,and Dubai witnessed luxury property sales averaging over USD 20 million.New York saw a solid showing with a 9%increase in high-end deals in the final quarter of 2023,compared to the same p

83、eriod in 2022.London experienced a 25%year-on-year increase,while Dubai doubled its sales of ultra-luxury homes.33 34 HNWI investors reduced equity holdings,dropping their allocation to 21%a two percentage point decline from the previous year doing so despite overall solid stock market performance.T

84、he reason?High borrowing costs,geopolitical tensions,and continued market volatility dampened investor enthusiasm for equities.Even as the Magnificent Seven outperformed the broader market,the S&P Index not including these stocks yielded a return of only 11.6%in 2023.35 Rising interest rates made tr

85、aditionally safe assets like bonds more attractive.Therefore,the“hurdle rate”shifted:the minimum return needed to justify equities risk changed.As a result,fewer stocks offered returns that outweighed potential volatility.Finally,a desire to diversify into high-return asset classes is driving increa

86、sed HNWI interest in alternative investments including commodities,currencies,private equity,hedge funds,structured products,and digital assets with overall allocations rising to 15%,from 13%in 2022(Figure 4).12World Wealth Report 202412HNWIs renew interest in alternative asset classesNearly half of

87、 the 700+relationship managers(RMs)we surveyed across 10 markets said their clients want to reallocate to growth assets in 2024,compared with what less than a third of RMs told us in 2023.Historically,alternatives have been the asset class of choice for higher risk-return profiles,and in 2023,HNWIs

88、showed renewed interest in private equity and digital assets.Private equity Although high interest rates and worries about a recession loomed in Western economies,wealthy investors grew more interested in private equity throughout 2023.Our survey of HNWIs revealed their optimism,with two out of thre

89、e planning to invest more in private equity during 2024:the potential for long-term higher returns and portfolio diversification objectives drove their enthusiasm.There are also early signs of a surge in 2024 dealmaking.The amount of uninvested capital waiting for private-market use,known as dry pow

90、der,reached a staggering USD 4 trillion by October 2023,according to BlackRocks 2024 Private Markets Outlook.36 This large pool of capital suggests that private equity activity will increase further if economic conditions continue to improve throughout 2024.Digital assets HNWIs are becoming more int

91、erested in digital assets,especially cryptocurrencies.Half of the relationship managers we polled reported a surge in client interest and investment in crypto.Wealth management firms are taking notice,too:our global survey of wealth management executives found that over 77%either maintained or incre

92、ased digital asset investments.A significant rise in business activity within the digital asset space backs the trend.There was a 2.7x increase in inflows related to digital asset investment products in 2023 when compared with 2022 levels.372024 is not expected as a year of huge growth,although inte

93、rest rates are expected to start going down with inflation being under control.Bonds and private credit shall be attractive for preserving wealth.For growing wealth,private equity investments are bound to be more attractive than equity markets owing to their volatility.”Pierre Ramadier CEO,Wealth Ma

94、nagement International Markets,BNP Paribas,FranceWorld Wealth Report 202468%of HNWIs plan to increase 2024 investments in private equity13The cryptocurrency market boomed in 2023,with Bitcoin leading the charge with a price increase exceeding 150%.38 In January 2024,the US Securities and Exchange Co

95、mmission(SEC)gave the green light to include cryptocurrencies in exchange-traded funds(ETFs),which allows more investors to add crypto to their portfolios.39 Firms including Bank of America,Wells Fargo,and Morgan Stanley now offer Bitcoin ETFs.News of BlackRock launching a Bitcoin ETF further fueled

96、 investor interest,particularly among HNWIs.40 Hedge funds After dismal 2022 performance,hedge funds rebounded in 2023.The worlds 20 best hedge funds generated USD 67 billion,roughly tripling 2022 returns.41 Hedge funds recovered from the volatility of 2022,as interest rates remained high but stabil

97、ized,and market turbulence subsided.Commodities Elevated interest rates,recession fears,and Chinas disappointing post-pandemic performance led to 2023 challenges.Excess oil and natural gas supplies contributed to falling prices,and despite strong global demand the cost of natural gas plunged nearly

98、44%,its worst year in at least a decade.42 Base metals,including aluminum,nickel,and lead,suffered from rising interest rates in 2023,with nickel falling by over 40%on the London Metal Exchange.43HNWIs are watching ESG investments ROIAlthough 39%of surveyed HNWIs said their 2023 returns from ESG-lin

99、ked assets were not as robust as those from other assets,they continue to show interest in understanding ESG investment performance.97%of our 2024 HNWI survey respondents said they understood their returns from ESG assets,up from 89%in 2023.Moreover,the percentage of HNWIs likely to request an ESG s

100、core while investing in sustainable products increased to 68%in 2024,up from 63%in 2023.In September 2023,the European Parliament proposed regulations that will authorize and monitor ESG rating agencies in the European Union,underscoring the growing importance of ESG ratings for the broader ESG asse

101、t market.44 Wealth management firms are responding to HNWI interests.As part of our relationship manager survey,50%of participants said clients are again curious about ESG-linked assets and their impact on society.Further,64%of wealth management executives said their firms held ESG-linked assets.Eve

102、n as interest in ESG-linked assets surges,investments in these assets have yet to rebound.Our 2024 executive survey found that 36%said their firms do not currently hold ESG-linked assets.Investors worried about misleading sustainable labels(greenwashing)prompted Europe and the UK to regulate what fu

103、nds could be called sustainable.In the United States,an SEC rule from September 2023 requires 80%of an ESG funds investments to align with its stated focus(e.g.,a clean-energy fund must invest mainly in clean energy companies).This stricter rule has significantly slowed the creation of new US ESG fu

104、nds,with fewer than 10 launched since the ruling(as of January 2024).45 In the short term,ESG asset industry restructuring might hurt investments;however,over time,it will likely boost adoption.As HNWIs become more knowledgeable about ESG-linked investments,future-focused wealth management firms wil

105、l embed and adopt rigorous metrics to quantify ESG considerations across asset classes.68%of HNWIs are likely to request ESG scores for their sustainable-product investments14World Wealth Report 2024ESG Lens revolutionizes global banks ESG decision-making Business challenge Environmental,social,and

106、governance(ESG)considerations are global imperatives in todays financial landscape.Yet when a US-based tier 1 global bank had to generate insights from vast amounts of alternative data on ESG metrics to make well-informed investment decisions,traditional methods lacked the depth and context to navig

107、ate effectively.Business solution The tier 1 global bank turned to Capgeminis ESG Lens solution that leverages cutting-edge open-source artificial intelligence models and financial services natural language processing(NLP)techniques.Powered by generative AI,the solution analyzes ESG sentiments and n

108、ews and offers historical context that enables equity researchers and wealth managers to dive deep into trends and patterns.Multiple generative AI models allow analysts to audit and trace previous investments.ESG Lens integrates trend lines with key performance indicators from the ESG reports of com

109、panies the bank considers for its investment portfolio.Alternate data sources enable comprehensive coverage of ESG factors that help the bank address future sustainability challenges and opportunities.Business impact ESG Lens empowered the banks equity researchers and relationship managers with the

110、knowledge they needed to offer clients strategic investment advice.In addition,the solution has significantly boosted the firms operational efficiency,improving historical contextualization by 80%.Beyond investment improvement,ESG Lens supported the banks commitment to a sustainable future by foster

111、ing trust and confidence among stakeholders and regulatory bodies.Despite robust HNWI segment growth,firms face uncertain profitabilitySurveyed wealth management executives ranked the threat of recession,evolving interest rates,stock market uncertainty,and geopolitical upheaval as their top concerns

112、 for 2024.These macroeconomic headwinds are squeezing wealth management firm revenues even as HNWI wealth grows.Our analysis of annual reports from leading wealth management firms uncovered that their primary revenue streams are currently facing substantial pressure.This pressure stems from external

113、 factors such as a challenging macroeconomic landscape and heightened geopolitical uncertainty in the short term.Michel Longhini Group Head,Global Private Banking,First Abu Dhabi Bank,United Arab EmiratesThe need for investors to understand their investments,particularly regarding ESG factors,is gro

114、wing steadily,especially among the younger generation.This trend is significant across regions,and firms are now recognizing the importance of genuine commitment to ESG principles to avoid legal risks and accusations of greenwashing.15World Wealth Report 2024 Management and performance-based fees co

115、mprise 55%to 70%of total revenue and will be under pressure due to slower market growth.Asset prices are unlikely to grow as high as they did during 2010-2020,exerting pressure on management fees charged as a percentage of assets under management(AUM)and performance-based fees for generating above-t

116、hreshold returns.Transaction and brokerage fees,representing 15%to 25%of total revenue,will also be under pressure due to client preferences for wealth preservation during volatility.Assets managed by dedicated portfolio managers could generate up to 15 times the revenue for a typical wealth managem

117、ent firm compared to if the same amount were held in cash and cash equivalents,Reuters reported in Q4 2023.46 Net interest income,typically 15%to 25%of total revenue,will decline in the coming years.Net interest income was very high in 2022 and 2023 because of record-high central bank interest rates

118、.In 2024,investors have shifted their bank deposits to higher-yield products,depleting bank balances.Banks will have to increase the interest rates on their deposits to defend these balances,stressing net interest income.Advisory and value-added services fees,which comprise 5%to 10%of the total reve

119、nue,are under pressure from fragmented wallet share from HNWIs;these investors tend to divide their wealth between multiple wealth management firms,subscribing to only a few of each firms value-added services.An analysis of revenue structure and pressures on different constituents indicates that ext

120、ernal market factors drive over 80%of a typical wealth management firms revenue.Advisory and service fees,although driven by internal factors,cannot compensate for revenue loss from management,performance,and transaction fees.Michelle Owen Global Head of Distribution,Global Private Banking,HSBC,Unit

121、ed KingdomWealth management firms must always be ready to act as the markets turn.Given volatility,banks need to be prepared with their product and service factory to help the clients convert their thinking into business and growth.”80%+of WM firm revenues are driven by external factors16World Wealt

122、h Report 2024Figure 5.Win HNWI mind share to achieve AUM growthSource:Capgemini Research Institute for Financial Services Analysis,2024.Wealth management firmsCollaborateCompeteEcosystem playBehavioralfinanceNew revenuestreamsCompete with family officesto secure the role of HNWIsprimary partnerDeepe

123、n client understandingto deliver personalized valueCollaborate withfamily officesto create new revenue streamsFinally,changes in regulatory frameworks and IT-related costs are putting pressure on wealth management firm margins.Gartner estimated that global banking and investment services firms IT sp

124、ending reached USD 652 billion in 2023,a more than 8%increase from 2022.47 The SEC estimates that new rules for private funds on reporting and legal compliance will cost the wealth management industry an additional USD 1.9 billion in spending annually.48With rising revenue pressures and increased IT

125、 and compliance costs,wealth management firms will face challenges on both sides of the balance sheet.Firms must find ways to maintain profitable growth during macroeconomic volatility and stock market uncertainty.The question is how best to get this done:Wealth management firms that deeply understa

126、nd client behavior can deliver personalized value and value-added services to earn mind share that boosts wallet share among HNWIs,especially in the profitable UHNWI segment(Figure 5).In addition,increasing AUM can fuel growth.As competition from other players,including family offices,heats up,WM fi

127、rms will find themselves competing to retain primary partner status among UHNWIs.Strategic WM firms will monetize their existing capabilities by offering products and services to family offices to create new,diversified revenue streams.17World Wealth Report 2024Leveraging behavioral finance to recon

128、nect with HNWIs18World Wealth Report 2024The old way of thinking assumes all investors have access to the same information and will act rationally.But investors are human!Emotions and mental shortcuts cloud judgment.Behavioral finance studies this real-world behavior,and strategic relationship manag

129、ers use this knowledge to understand their clients and offer them the best shot at robust return on investment(ROI).Wealth management firms can make data-driven decisions that are less susceptible to emotional or cognitive biases by leveraging artificial intelligence,as it helps minimize subjective

130、judgments and enhances the accuracy and consistency of wealth management decisions.More than 65%of the HNWIs we polled said biases impact their decision-making,especially during significant life events such as marriage,divorce,and retirement;geopolitical uncertainty and volatile market conditions al

131、so have an impact.Important events cause emotions to spike,leading to impulsive,irrational decisions that can harm investors long-term financial plans(Figure 6).Over the years,behavioral biases have sparked market bubbles,crashes,and financial losses.Lets examine some real-world market examples to u

132、nderstand the underlying causes.GameStop mania:The pandemic hit US-based retailer GameStop hard,resulting in the 2020 closure of 462 stores.Hedge funds saw an opportunity to profit from the companys underperformance by shorting its stock.Influenced by Reddits Wallstreet Bets community,retail investo

133、rs fueled a surge in GameStops stock price,driven by biases like regret aversion(where previously reluctant investors joined the movement in fear of missing out on potential gains),confirmation bias,and activity bias.This frenzy led to a short squeeze,causing substantial losses for hedge funds and p

134、rompting calls for regulatory scrutiny.GameStops stock soared over 1,600%in January 2021,reaching a peak of USD 483 from a low of USD 2.57 in April 2020.49Figure 6.Biases influence HNWI investment decisionsSources:Capgemini Research Institute for Financial Services Analysis,2024;World Wealth Report

135、2024 Global High Net Worth Insights Survey,N=3,119.Note:Chart numbers and quoted percentages may not total 100%due to rounding.%of HNWIs who say they are susceptible to investment biasesInvest based on my market predictionsStick to past decisions withoutregular re-evaluationToo conservative to grabp

136、otential opportunitiesHold onto under-performinginvestments for an extended periodOpen to grab opportunities withoutextensive deliberationsSeek information from sources thatalign with my viewsConfirmation biasActivity biasDisposition effectRisk aversionAnchoring biasOver confidence65%47%45%45%43%37%

137、47%16%42%42%41%13%15%16%39%14%28%7%YesMaybeNo19World Wealth Report 2024 Bitcoin boom and bust:Various psychological biases drove the remarkable 2021 surge in Bitcoin.Anchoring bias,for instance,led some individuals to rely heavily on initial information,fixating on the cryptocurrencys past performan

138、ce to determine its future trajectory.Overconfidence was also significant as investors overestimated their abilities and predicted Bitcoins success with unwarranted certainty.Market sentiment eventually shifted,triggering a sharp sell-off and collapse.50 There are many other forms of biases,includin

139、g mental accounting,recency bias,familiarity bias,with some cognitive biases more prevalent than others and manifesting in social interactions,influencing memory,and impacting beliefs,decision-making,and behavior.HNWIs recognize the potential effect of biases on investment decision-making.Of those s

140、urveyed,79%said relationship manager(RM)guidance could help them to manage their unknown biases.Relationship managers should understand the behavioral phenomena influencing asset prices and,more importantly,their clients behavioral biases and heuristics(reasoning strategies)to advise them effectivel

141、y.Behavioral finance goes beyond traditional assessments by providing deeper insight into risk attitudes,including tolerance,stress response,market engagement,and decision-making style.With a deep understanding of behavioral finance,RMs can collaborate with clients to alleviate anxiety and prepare t

142、hem for the investment journey ahead.Wealth management firms may be data rich,yet CX poorExceptional client experience(CX)is central to wealth management success.Not surprisingly,our wealth management executive survey found that CXOs top strategic priority for the next 12 months is to enhance client

143、 experience.Personalization is pivotal to client experience,as HNWIs increasingly demand tailored experiences that meet individual preferences.A comprehensive profile beyond basic demographics and transaction data is the key to unlocking full client potential.However,firms must gather and analyze in

144、formation to recognize client needs,preferences,financial goals,and risk tolerance.While all wealth management firms do some client profiling,many struggle to use the information effectively.Underutilization prevents a complete 360-degree client view and limits information optimization.Traditional c

145、lient profiling,which uses primary data sources such as financial statements and transaction history,is practiced industry-wide.However,the use of behavioral and client lifestyle data that provide a 360-degree and deeper picture of investors overall attitudes,beliefs,and perceptions is less common.T

146、ypical profiles may encompass basics such as income,assets,and investment preferences but overlook critical factors like lifestyle choices,emotions,biases,and long-term financial goals(Figure 7).A complete psychographic profile,including the psychological factors affecting the client,has to rely on

147、behavioral data collected from alternative sources.Data collection is one aspect of the profiling challenge.But investors emotions and cognitive biases evolve with market conditions and life events,making regular client information updates essential:knowing how to utilize data becomes irrelevant if

148、the analysis is outdated.Accurate and up-to-date client profiles ensure impactful client conversations.WM firms that periodically review client profiles identify gaps,errors,and needed modifications to keep information relevant,accurate,and current.Our relationship manager survey found that only 8%o

149、f wealth management firms update client profiles weekly,52%conduct monthly or quarterly updates,and 40%update profiles annually or less frequently.As a result,firms find it challenging to keep pace with clients evolving demands as their emotional state and broader psychographic profiles change,parti

150、cularly within a volatile market.79%of HNWIs believe relationship manager guidance can help manage unknown biases20World Wealth Report 2024Clients are demanding increasing customization of information and insight from their wealth managers.At the foundation,they want accurate and timely access to ho

151、ldings,transactions,aggregated portfolios and secure communication.Next,they are looking for transactional capabilities such as payments and trading to enhance client convenience.Our offer of personalized content and advice,digital engagement and customizable reporting adding data-driven insights le

152、veraging AI helps address the evolving preferences and expectations of clients and ensures the clients remain engaged.Christine Ciriani Head of International Digital Wealth,InvestCloud,SwitzerlandFigure 7.Data types collected by WM firmsSources:Capgemini Research Institute for Financial Services Ana

153、lysis,2024;World Wealth Report 2024 Global Relationship Manager Survey,N=782.As reported by relationship managersClient-provided informationduring onboardingFinancial statements anddocumentsTransaction history andaccount activityInteractions for understandingcustomer sentimentCustomer lifestyle data

154、Primarydata sourcesAlternativedata sources88%83%64%56%20%Unfortunately,outdated profiles cause delays in personalized investor communication and tailored advice.According to the relationship managers we polled,only 13%of wealth firms send customized communication as soon as market volatility or a si

155、gnificant life event disrupts the status quo.In contrast,73%of firms distribute generic communication monthly,and 14%communicate with clients yearly.Not surprisingly,65%of HNWIs say they are concerned about the lack of personalized advice tailored to their changing financial situation.In short,they

156、seek guidance,especially during market volatility,to ensure they make thoughtful decisions and do not yield to biases.Real-time communication is crucial in helping clients manage biases that sudden,volatile market movements might trigger.How can wealth management firms shift from being data rich to

157、adopting a data-centric approach that hyper-personalizes CX?21World Wealth Report 2024Generative Al platform enables fast,tailored internal data access giving wealth advisors more time with clients Business challenge A leading Swiss wealth management firm struggled with administrative task inefficie

158、ncy as advisors became bogged down in internal document searches and information retrieval.The slow process limited relationship managers ability to develop personalized investment plans and build strong,strategic client relationships.Business Solution The wealth firm collaborated with Swiss startup

159、 Unique to co-create One.Chat,an enterprise-ready platform that leverages Microsoft Azure OpenAI Service and Retrieval-Augmented Generation(RAG),prompt chaining,and prompt-to-SQL.The solution aimed to facilitate fast access to internal data,including regulatory and compliance information,and to stre

160、amline daily tasks such as client conversations,proposal generation,and coding and summarization of large data sets.Business Impact The generative AI-driven platform has boosted the wealth management firms productivity by providing advisors with augmented assistance,coaching,and useful analytics.Emp

161、loyee surveys indicate average weekly time savings of up to one and a half hours,which translates to substantial overall efficiency gains.One.Chat enhances client service by freeing relationship managers from administrative burdens,allowing them more time for client interaction and trust building.Be

162、havioral finance and AI enable data-centricity to spark client valueSuperior experiences that address client biases can differentiate WM firms in the marketplace.However,CX initiatives require cutting-edge technology integration,notably transformative artificial intelligence.75%of wealth management

163、executives believe AI will significantly impact the industry in the next one to two years through algorithms and systems that can perform tasks that typically require human intelligence learning,problem-solving,and decision-making.AIs analytical capabilities can help firms understand and anticipate

164、investor behavior.According to our survey of CXOs,the top three areas where AI will impact the wealth value chain are manual process automation,generating intelligent insights for portfolio optimization,and communication personalization but it can also help improve performance across many aspects of

165、 client service delivery(Figure 8).Financial planningRelationship managers who take a holistic approach to uncovering clients diverse needs and preferences including emotions and behavioral biases will be better positioned to understand investors life situations during financial planning.65%of RMs s

166、urveyed find having individual profiles that include client preferences,pain points,and behavioral tendencies is critical to enable personalized advice.69%of wealth management executives who incorporate behavioral finance in their practice say it contributes to a more robust client profile and with

167、the advent of AI,firms can efficiently build more vital client profiles.AI algorithms can now analyze vast datasets encompassing primary data sources,such as financial transactions,and alternative data sources,including social media interactions and online behavior enabling the creation of more comp

168、rehensive and dynamic profiles.75%of WM executives believe AI will significantly impact the industry within two years2222World Wealth Report 2024Due diligence and KYC processesClientaccount openingProposal generation and trade executionPortfolio monitoringReportingand client communi-cationFigure 8.A

169、I can fuel wealth management performanceSource:Capgemini Research Institute for Financial Services Analysis,2024.Amplify client experienceWM value chainWhere AI createsthe most impactRegulatory complianceManual process automationCompliance and risk managementTransaction processing and record keeping

170、Investment performance reportingPersonalized communication(Co-pilot)ClientprofilingData analysisIntelligent insights for portfolio optimizationClient acquisition target marketingPortfolio buildingRisk profiling and asset allocationFinancial planningResearch and analyticsWhere behavioralfinance creat

171、esthe most impactClient profiling,includingpsychological factorsClient biasidentificationDecision-making framework to mitigate emotional biasBehavioral profile segmentationClient profile update frequencyBehavioral coaching during volatilityPortfolio construction and asset allocationInvestment advice

172、This data-driven approach enhances profiling and offers insight into clients financial transactions,behaviors,and emotions.Risk profiling and asset allocationSegmentation using traditional demographic factors age,location,and income does not capture psychographic indicators such as emotions and bias

173、es.Behavioral finance assesses how clients react to market fluctuations,their involvement in decision-making,and their level of investment expertise.This behavioral segmentation approach offers a better decision-making framework by incorporating psychological insights into the financial decision pro

174、cess.AI facilitates the development of client micro-segmentation,which incorporates dynamic and attitudinal behaviors to create more precise risk profiles.It also helps in risk management as wealth management firms can make informed decisions and accurately predict future risks.AI-powered systems ca

175、n analyze data and detect patterns that may be difficult for humans to recognize,enabling RMs to take proactive measures in advising clients.Wealth management firms can leverage technology to construct comprehensive customer profiles by integrating real-time data from multiple sources.While some may

176、 perceive it as too early to adopt,staying ahead of the curve is imperative.However,the challenge lies in ensuring that AI analysis produces forward-facing insights rather than relying solely on past behavior patterns,especially in investment decision-making.Noah Kraehenmann Global MD Wealth Managem

177、ent,Temenos,Switzerland23World Wealth Report 2024Portfolio buildingRelationship managers can build resilient client portfolios that effectively withstand market volatility by integrating behavioral finance concepts that prioritize long-term perspectives and discourage impulsive decisions.Behavioral

178、finance is a tool to strengthen clients adherence to their investment strategies,which can reduce deviation from investment plans.According to our survey,65%of relationship managers believe knowing about their clients investment decision-making biases can help them provide sound advice.Firms can ful

179、ly leverage behavioral finance when they train RMs to interpret and analyze behavioral profiles and utilize the insights for portfolio creation and targeted advice.AI will also aid portfolio management by providing intelligent insights via advanced algorithms that monitor global markets,news,and eve

180、nts in 24x7 real time swift execution is particularly advantageous in fast-paced markets.While traditional data analysis relies on humans to define rules,AI autonomously discovers patterns without human intervention.Additionally,AI can help diversify and rebalance portfolios by evaluating various in

181、vestment avenues,automatically identifying low-correlation assets,triggering alerts,and suggesting adjustments to align with investors objectives optimizing returns and mitigating risks.From Italy,the Chief Operating Officer&Business Transformation Head for Fideuram-Intesa Sanpaolo Private Banking,R

182、iccardo Negro said,“Our service model places the advisor at the center,with AI enhancing their capabilities by offering detailed insights,delivering personalized articles and information to clients,and conducting predictive market analysis.”As one industry example,in March 2023,HSBC launched the Art

183、ificial Intelligence Powered Global Opportunities Index,developed with EquBot,to optimize asset allocation and provide investment insights.A rule-based investment process removes discretion from day-to-day decision-making and reduces the chances of impulsive actions.HSBC rebalances the portfolio wee

184、kly to remain nimble and primed for resilient growth.51Reporting and client communicationTo match clients behavioral preferences,reporting and client communication are crucial to ensuring clients understanding and confidence in the investment process.Active communication encourages proactive adjustm

185、ents to client profiles based on changes in behavior or market conditions,ensuring that profiles remain relevant and current.Ongoing engagement educates clients about behavioral finance concepts,risk management,and long-term investing to empower informed decisions.It can also help investors understa

186、nd the underlying drivers behind market volatility,uncover their unknown biases,and make informed investment decisions that are not emotion-driven.AI will help create personalized communication by offering real-time alerts of market events or life events that will signal wealth management when to re

187、ach clients,analyze communication preferences,and determine the most effective channels and messages for client interaction.From our 2024 executive survey,59%of wealth management executives who leverage behavioral finance believe it aids in advising clients during volatile market conditions and sign

188、ificant life moments.Vanguard Institutional improved its conversion rate by 16%with digital marketer Persado AI to fortify client messaging and generate a click-through rate 15.76%higher than the control message,as it helped uncover the exact phrases that resonated with customers.52World Wealth Repo

189、rt 202424AI can add value to wealth management in many areas,including automating manual tasks,transaction processing,and record-keeping,where it can streamline document management processes.AI can assist in risk management through real-time transaction data analysis to identify suspicious patterns

190、or anomalies that may indicate fraud.It can also improve investment performance reporting by generating personalized reports featuring relevant performance metrics,insights,and recommendations customized for each clients portfolio composition and risk profile.Finally,AI can enhance client acquisitio

191、n marketing by identifying high-potential prospects.Chinese FinTech Ant Group unveiled a finance-specific AI model and began testing consumer and professional large language model(LLM)apps in September 2023.The apps include Zhixiaobao 2.0,an intelligent financial assistant for consumers,and Zhixiaoz

192、hu 1.0,an intelligent business assistant serving financial industry professionals.The LLM powers a range of professional services,touching wealth management in areas such as financial product evaluation,market analysis,and investor education.53According to our relationship managers survey,the top te

193、chnology priority for improving client service is obtaining real-time insights into client preferences and behaviors,closely followed by interactive client reporting tools that can help better explain portfolio performance(e.g.,summarizing meetings).Wealth management firm hyper-personalizes client e

194、xperience with Augmented Advisor Intelligence Business challenge Wealth advisors increasingly use psychographics the study of personality,values,attitudes,interests,and lifestyles to develop relevant products and marketing campaigns.So,when a private wealth management firm sought to integrate real-t

195、ime information from varied sources to build psychographic client profiles,it needed a way to delineate client preferences to deliver custom services.Business solution The firm turned to Capgemini to understand clients psychographic preferences and deliver hyper-personalized CX.It selected Capgemini

196、s Augmented Advisor Intelligence solution,which leverages propensity models and a next-best-action client engagement approach to build comprehensive customer-segmentation models swiftly.The solution integrated real-time investor information with life events to develop a real-time model.Capgemini als

197、o implemented an automated training model that leverages previous campaigns,client product preferences,and faster triggers from behaviors and external events.Business impact The solution improved the wealth firms marketing campaign promptness and relevance,and it equipped relationship managers with

198、client insights,empowering them to deliver personalized CX.Personalization at scale is the Holy Grail for growth in banking.While its a simple concept,delivering it has been challenging due to complex,siloed data environments and manual efforts required to understand customers fully.Now,with technol

199、ogy like Google Cloud,firms can leverage a single data system to unify all of their structured and unstructured data,enrich it with third-party insights,and deploy AI-powered personalization models in near real time.Toby Brown Head of Global Banking Solutions,Google,USA25World Wealth Report 2024Gene

200、rative AI will likely move to the forefront of the wealth management model,marking a significant shift in how services are delivered and experienced.Generative AI has taken public opinion by storm as it continuously improves based on user interactions for a more intuitive and compelling client exper

201、ience,and it is poised to significantly impact the wealth management value chain.Wealth management firms need to embrace and leverage this new technology to stay competitive in an increasingly digital landscape.Integrate,ingest,and implement AI to strengthen client relationshipsAmong the wealth mana

202、gement firms we surveyed,49%currently use AI in some areas,and 73%of them plan to increase adoption at the enterprise level within the next one to two years.AI technologies are rapidly evolving as effective tools for enabling and supporting critical business functions;but realizing tangible business

203、 value requires a deliberate and structured approach to achieve broad adoption rather than pursuing limited proofs of concept.The structured approach described below(Figure 9)will help achieve scalable adoption and ensure that AI initiatives deliver meaningful outcomes aligned with broad business go

204、als.IntegrateBehavioral data that uncovers investors biases and attitudes can be present in a predefined format like transaction data.More often,however,it is found in unstructured data such as social media posts,images,videos,audio recordings,emails,and other forms of content beyond financial data.

205、Traditionally,AI has worked with structured numerical data.Now,generative models integrate and process structured and unstructured data,primarily harnessing unstructured data to extract behavioral insights.Generative AI excels at interpreting diverse unstructured datasets to generate realistic conte

206、nt,enhance data for machine learning training,and simulate complex scenarios.Unstructured data fields often contain valuable information overlooked within structured data reporting that can uncover behavioral patterns and sentiments,thus enriching advisors understanding of client behavior and biases

207、.Figure 9.A three-step approach to scalable AI orchestrationSource:Capgemini Research Institute for Financial Services Analysis,2024.AI orchestrationSentiment analysisStructured dataBehavioral dataUnstructured dataPredictive analyticsReal-time customer profilingPersonalizedcommunicationPortfolio opt

208、imizationand asset allocationImplementUse a 360o customer view to help RMs understand and meet HNWIs complex needsIngestAI can process vast data to identify patterns,correlations,anomalies,and trends that could take days or weeks if done manuallyIntegrateLeverage both structured(transaction data,spr

209、eadsheets)and unstructured data(photos,video,email,social media posts,audio files)321In consumer markets,the value of generative AI for HNWIs with complex needs is significant.With access to data and research,these models can quickly generate well-structured information for client discussions.This c

210、apability allows for more informed and timely decision-making,ultimately serving customers better than ever before.Urs Bolt WealthTech Expert,Bolt Money,Switzerland73%of WM executives say their firms use AI in some areas,with enterprise-wide adoption planned within two years26World Wealth Report 202

211、4IngestIntegrated data,when ingested,can provide meaningful insights by utilizing AI-based sentimental analysis and predictive analytics to identify patterns and trends in seconds or minutes,and consistently and accurately detect behavioral attitudes.Sentiment analysis,also called opinion mining,imp

212、lies the interpretation of emotions from any text-based source,be it a news article,social media post,personal blog content,etc.Interpretation of emotion is the key to enriching behavioral finance by providing a deeper understanding of the psychological factors that influence investment decisions.AI

213、-based sentiment analysis helps financial professionals understand investors feelings behind their investment decisions,and it can classify the customers sentiment into broad categories like positive,negative,or neutral.Generative AI models can take the analysis one step further.When firms train gen

214、erative AI on extensive datasets with labeled sentiment,it can gauge market and investor sentiment toward specific assets,industries,or market conditions,identify market trends,anticipate investor sentiment shifts,and uncover potential market opportunities or risks that merit actionable business ins

215、ights in real time Based on historical and market data,AI-based predictive analytics can forecast customer behavior,activity,preferences,and trends.With the addition of generative AI,firms can incorporate synthetic data to create additional realistic scenarios that might not be present in the histor

216、ical data,offering an even broader perspective.Alternative scenarios enable predictive analytics to anticipate client responses to different investment strategies or life events.In June 2023,Salesforce introduced Personalized Financial Engagement.The solution helps banks and financial services firms

217、 leverage artificial intelligence,real time data,and customer relationship management to oversee clients financial plans.It empowers financial institutions with real-time signals to anticipate customers financial behaviors and offers actionable insights at the right time.RBC Wealth Management U.S.ad

218、opted this solution to integrate disparate data systems and create unified customer profiles,enabling the delivery of automated and intelligent customer journeys at scale using generative AI.54Search engine solution harnesses generative AI to redefine knowledge management for a European bank Busines

219、s challenge Retrieving information from reliable sources for quick use is crucial in financial services.In Europe,a tier 1 banks employees struggled with inefficient manual document retrieval,slowing productivity and risking operational error.The bank sought swift access to pertinent information and

220、 streamlined internal workflows to support operational precision and regulatory compliance.Business solution The bank turned to Capgeminis generative AI-powered Smart Search Engine to transform its knowledge management paradigm.Onsite architecture harnesses open-source large language models(LLMs)to

221、deliver rapid and reliable access to vital documents.The solution offers traceable answers and a user-friendly interface that enables bank employees to access and retrieve dependable information,and significantly streamlines the organizations knowledge management processes.Business impact Smart Sear

222、ch Engine is on track to improve operational efficiency and accuracy significantly.It increases employee accuracy and productivity by reducing manual search time and enabling strategic initiatives and decision-making.The solution optimizes workflows and reinforces the banks commitment to innovation

223、and knowledge management.27World Wealth Report 2024ImplementIngesting all the generative AI-powered analysis with existing CRM platforms will lead to a 360-degree customer view,which completes the understanding of the client from every possible angle,along with predictions that can be further implem

224、ented to drive real-time customer profiling and portfolio optimization(Figure 10).Creating a unique view of each client and then sending personalized communication at the right time,reflecting their behavioral attitudes and set biases,will help in achieving a greater degree of client intimacy.AI-pow

225、ered behavioral finance yields benefits across the client lifecycleBehavioral data enables the construction of 360-degree client profiles,which,when continuously updated,can ensure accuracy.Integrating enhanced insights into individual behaviors,preferences,and financial tendencies will provide pers

226、onalized investment portfolios and asset allocations that align precisely with each investors unique profile.Moreover,targeted coaching helps clients navigate emotional biases during market volatility.The business impact of AI affects the investment lifecycle,from enhancing CX to improving advisor e

227、fficiency.A 360-degree client view boosts experience through hyper-personalization and tailored plans that reflect real-time changes in a clients financial situation.Firms can proactively communicate by leveraging the most In the future of wealth management,AI will play a crucial role in deepening a

228、dvisor-client relationships and enhancing client experiences.By leveraging data intelligence,advisors can anticipate client needs,identify key discussion points,and proactively engage with clients.Kabir Sethi Wealth Management Leader,Ex-LPL Financial,USAFigure 10.Unlocking the power of generative AI

229、 in wealth managementSource:Capgemini Research Institute for Financial Services Analysis,2024.Notional Scenario 1:JohnEntrepreneurWealthAI(Gen AI-enabledWM platform)Deep learning algorithms tounderstand financial goalsCustomized portfoliofor long-term growthPersonalized investmentstrategies24/7 acce

230、ss to portfolioConverses with Johnin natural languageEmmaFinancial AdvisorFinIntegrate(Gen AI-poweredplatform)Notional Scenario 2:AI orchestrationengine integratesClient dataInternalsystemsMarketinsightsMinimizenon-coreworkEnhancepersonalizedclientinteractionsHow can a generative-AI powered wealth m

231、anagement platform help?A generative AI-powered platform enhances wealth management services by providing personalized engagement for both affluent customers and advisors.It adapts to individual financial needs and goals,offering targeted insights and tools to improve decision-making.By integrating

232、generative AI,the platform delivers a tailored experience,optimizing and aligning interactions with each users unique financial narrative.28World Wealth Report 2024effective channels and client messages that build trust and rapport.Advisors can engage with clients through consistent and timely perso

233、nalized nudges,fostering a positive feedback loop that strengthens relationships.Moreover,integrating AI copilots into everyday applications automates mundane tasks,optimizes time,and minimizes errors.It empowers employees to focus on strategic and creative aspects of their jobs and position them as

234、 forward-thinking experts.Wealth management firms can achieve several key objectives by enhancing the client experience and improving relationship manager efficacy(Figure 11).They can boost new client conversion rates by delivering exceptional services tailored to individual investment needs.Persona

235、lization is a marketplace differentiator that attracts new clients and helps retain existing investors by ensuring engagement,trust,and loyalty,often enhancing Net Promoter Scores(NPS).Firms that can cultivate stronger client relationships will further solidify their loyalty.Heightened loyalty incre

236、ases customer lifetime value because loyal clients are likelier to entrust additional assets to the firm and recommend its services to others.Reconnecting with clients and harnessing the power of AI will lead the way for the future of wealth management:firms that act now to meet investors dynamic ne

237、eds can help ensure their continued value for the years ahead.Figure 11.AI-powered behavioral finance boosts businessSource:Capgemini Research Institute for Financial Services Analysis,2024.Enhance experienceDrive RM efficiencyPersonalizedportfolio constructionFinancial advisory automation-Next best

238、 actionProactive communicationHyper-personalizedbehavioral nudgesAutomating manualtasks(non-value-add)Intelligent customer serviceGreateracquisitionImprovedengagementand trustIncreasedcustomerloyaltyStrongconversionratesPositiveNPS scoresLifetime client value29World Wealth Report 2024Ultra-HNWIs:The

239、 most lucrative segment to attract and retain30World Wealth Report 2024The ultra-high-net-worth individual(UHNWI)segment is a key revenue source for wealth management firms.UHNWI population growth is solid,and new wealth hubs offering tax incentives,including Miami and Milan,are challenging long-tim

240、e favorites New York and London.Efforts to tap UHNWI opportunities are growing.Deutsche Bank,which holds about 20%of the UHNWI market share in Germany,established regional teams to identify and serve UHNWIs beyond Frankfurt,and have introduced specialized teams to provide comprehensive services in M

241、arch 2024.56 57 However,managing a larger pool of assets can present complexities for wealth firms,particularly as their needs evolve with the emergence of the new generation.Entrepreneur UHNWIs look past market challenges and eye wealth growthThere is a significant shift in UHNWI population composi

242、tion related to demographics and wealth.Self-made UHNWIs are outpacing those who have inherited their wealth,as the proportion of self-made UHNWIs rose to 72.6%in 2022,up from 66.5%in 2016,according to Wealth-X,a global platform for UHNWI data and insights.58 These individuals built their wealth pri

243、marily through entrepreneurship or executive roles in the technology sector.The success of these entrepreneurs over the past decade has also boosted the number of younger UHNWIs:almost a fifth of this total population is self-made and under 40.59Despite market instability,UHNWIs are on the path to g

244、row their wealth in 2024,as revealed in our HNWI survey,where we talked to 1,300+UHNWIs.This position contrasts with other HNWI segments that are mostly seeking to preserve their existing wealth.Why is there a difference?UHNWIs know they can weather short-term market fluctuations because of long-ter

245、m investment timelines enabled by their substantial discretionary wealth.As a result,their risk tolerance tends to be higher and more flexible.Highly knowledgeable UHNWIs spark specific demands and active involvement.Of the relationship managers we surveyed,62%said UHNWIs are more engaged in their i

246、nvestment strategy than other wealth bands.71%of the RMs we surveyed said UHNWIs favor alternative investments more than clients from other wealth bands.Since 2023,the top 20 WM firms have unveiled new private-market funds,as 63%of UHNWIs say they may increase their 2024 allocations.Alongside invest

247、ing through funds specialized in alternative investments(from Blackstone,etc.),more and more UHNWIs seek direct investment into private equity deals.60 91%of the UHNWIs we surveyed support passion investments such as luxury real estate,wine,coins,and art that may reflect lifestyle choices.Notably,UH

248、NWIs seek returns from passion-driven investments,which they say are more than hobbies.Of those we surveyed,57%scrutinize and track the return potential of passion-driven investments.As the UHNWI segment continues to change,wealth firms need to proactively align products and services to meet the mul

249、ti-generational and multi-jurisdiction investment needs of UHNWI clients.For UHNWIs,prioritizing wealth management with a multi-generational focus holds paramount importance.We emphasize heavily on education and tailored solutions geared towards multi-generational wealth management.It is crucial to

250、develop a comprehensive understanding and address the unique needs of multiple generations within families,to ensure the preservation and growth of wealth across lifetimes.Yann Galet MFO Founder and Family Officer,G Consult Finances,France31World Wealth Report 2024In recent years,UHNWIs increasingly

251、 seek cross-border diversification to protect assets from geopolitical risks.Additionally,multi-generational wealth management,emphasizing on wealth transfer and after tax returns,is a top priority.Bespoke solutions,including estate planning,are necessary to meet their evolving needs beyond conventi

252、onal investment management.Sbastien Capt CEO,Prime Partners,Switzerland Diverse value-added services are indispensable to solidifying UHNWI relationshipsUltra-HNWIs prioritize value-added services,as 78%consider them essential to wealth management firm relationships.Complex UHNWI lifestyles and need

253、s put financial and non-financial value-added services at the center of the relationships(Figure 12).Financial value-added servicesUltra-HNWI investment styles emphasize up-to-date market insights and investment assessment methodology for informed decision-making.Not surprisingly,they say investment

254、 management comprising portfolio allocation across diversified asset classes,and comprehensive budgeting,insurance,and lending solutions is their most important financial value-added service.Over three-quarters(77%)of UHNWIs count on their WM firms to support them in their inter-generational wealth

255、transfer needs.This requirement will continue to grow,driven by the ongoing great wealth transfer:according to an estimate by Cerulli Associates,nearly USD 36 trillion,or 42%of overall transfer volumes,will be passed on to Gen X,millennials,and Gen Z by 2045 across HNWI and UHNWI wealth segments.61

256、During wealth transfer,UHNWIs need support in navigating regulatory and tax barriers.For instance,the United States is expected to double its estate tax by 2026.62 For WM firms,it is crucial to engage with the next-generation beneficiaries,failing which they risk losing them as customers.Figure 12.V

257、alue-added services influence ultra-HNWI WM firm selectionSources:Capgemini Research Institute for Financial Services Analysis,2024;World Wealth Report 2024 Global High Net Worth Insights Survey,N=3,119.Financialvalue-added servicesNon-financialvalue-added servicesAs rankedby UHNWIs12345Investment m

258、anagement(privateequity,life insurance,lending,ESG)Concierge servicesNetworking opportunitiesLegal consultationLifestyle adviceAggregated view of investments across multiple jurisdictionsInheritance advice(inter-generational wealth transfer)Tax planningRetirement planningReal-estate investment advic

259、e32World Wealth Report 2024An important value proposition for the ultra-wealthy is the multi-juridisdictional availability of capital.Its not just about having money when they need it but also where they want it.Wealth management firms must understand the needs of their customer to make sure they ca

260、n anticipate where their client will need the money,and make it available there.Arnaud Picut CEO,Aixigo,GermanyDespite uncertainty around central bank interest rates,UHNWIs are showing increasing interest in illiquid asset classes homes and other real estate,collectibles and art,and debt instruments

261、.A growing appetite for luxury second homes has pushed real-estate advice into the top five of UHNWIs service requirements.London-based investment data company Preqin estimates that the private credit market(which invests in businesses least impacted by economic cycles healthcare and non-discretiona

262、ry consumer goods)will nearly double by 2028,reaching USD 2.8 trillion.63 Private credit solutions are highly sought by UHNWIs to meet their long-term return expectations while overcoming short-term market fluctuations.Non-financial value-added servicesOur HNWI survey results put concierge services

263、at the top of the non-financial list.These sophisticated services are driven by personalized assistance,recommendations,and priority access to exclusive events,fine-dining experience upgrades,and other lifestyle management solutions.Family offices secure access to these services through third-party

264、platforms.For instance,US-based concierge community Myria offers a luxury services marketplace.64 Half of the survey respondents said family offices excel at providing UHNWIs top four non-financial value-added services concierge services,networking opportunities,legal consultation,and lifestyle advi

265、ce a critical differentiator.Family offices stay close to clients to understand their objectives and assist in decision-making.As a result,they are a step ahead in breaking down family dynamics and establishing a birds-eye view of client wealth positions,including non-bankable assets.An aggregated v

266、iew of investments across jurisdictions is critical because UHNWIs invest across geographies and asset classes.Family offices can feed portfolio management tools with data from multiple banks to facilitate a consolidated view.For example,Germany-based HQ Trust developed HQT One,a device-independent

267、platform that provides UHNWIs with asset reporting and controlling services.65 When we asked UHNWIs why they prefer family offices over WM firms,their number one reason was the availability of more non-financial value-added services,followed by greater decision-making agility and control,and persona

268、lized services at higher speed and low cost.Of the more than 1,300+UHNWIs we surveyed,93%said they utilize single-or multi-family offices as an orchestrator for one or more value-added services.Meanwhile,incumbent WM firms provide family offices with primary financial services like custody,access to

269、 diverse investment opportunities,and other investment-related activities.93%of UHNWIs utilize family offices for value-added services33World Wealth Report 2024With family offices seeking support from wealth management firms for investment opportunities,UHNWIs said they prefer incumbent wealth firms

270、 for financial value-added services(Figure 13).In fact,85%of WM executives said WM firms provide robust investment opportunities and consider primary financial services essential to engaging UHNWIs.But there are expectations beyond investment opportunities:UHNWIs are turning to different providers t

271、o meet separate needs.Amid increasing competition,it is challenging for incumbent WM firms to retain wallet share without providing a full suite of services.Competition for ultra-HNWI wallet share intensifies as family offices gain influenceUltra-HNWIs seek financial and non-financial services with

272、personalized attention,so they turn to multiple service providers.According to our survey,the number of UHNWI wealth management relationships increased from three in 2020 to seven in 2023.Additionally,78%of UHNWIs indicated they are likely to switch their primary wealth management firm in 2024.This

273、trend may indicate that WM firms are struggling to deliver the expected range and quality of services.On the other side,family offices successfully cater to ultra-HNWIs non-financial needs and are expanding their reach.A Preqin study found that 37%of all family offices are in North America,32%in Eur

274、ope,15%in Asia-Pacific,and the remaining 17%spread worldwide,with Asia-Pacific region growing the fastest.66 With the sustained growth of the UHNWI population,40%of Asia-Pacific family offices were launched in the last decade alone:family offices in Singapore grew from 400 in 2020 to 1,100 in 2022.6

275、7 With their diverse operating models fully aligned with the objectives of the families they serve,family offices are becoming more visible and are significantly challenging traditional WM firms.Single-family offices,exclusively serving one family,are set up by hiring a team of specialists from bank

276、ing,wealth management,or industry bodies.These offices provide a greater level of control and greater agility than multi-family offices and are viable only to a select group of UHNWIs with a sizeable amount of wealth.Their growing prominence led to a 200%increase during the past decade,reaching a to

277、tal of 10,000+single-family offices by 2022.68 On the other end of the spectrum are relatively cost-effective,multi-family offices that serve multiple families.Families with investable assets of USD 150 million or less often employ these offices.69 Yet,multi-family offices follow a personalized appr

278、oach and offer greater flexibility than most incumbent wealth management firms.Figure 13.Traditional WM firms and family offices have unique selling propositionsSource:Capgemini Research Institute for Financial Services Analysis,2024.WM firm advantagesFamily offices advantagesStabilityBalance sheets

279、Regulated/licensedGlobal presenceAccess to club dealsTransparencyPersonalizationIndependenceConsolidated viewEducation across generations34World Wealth Report 2024Family office clients prioritize transparency,trust,and independent advice.The focus is on advising the clients to identify the best inve

280、stment opportunities and asset management firms aligned with their strategic objectives.This holistic approach builds a strong relationship founded not only on financial performance,but also on a deep level of trust.”Christian Stadtmller Managing Director,HQ Trust,GermanyApart from the most prominen

281、t family offices that often perform core and non-core functions internally,many family offices offer only a few services internally and then become facilitators by partnering with independent advisors,lenders,technology providers,and WM firms.Costs,frequency,and complexity typically drive the percen

282、tage of in-house services.According to Campden Research,14%of family offices in North America provide all services in-house,and 4%act as orchestrators with external support;the remaining 82%of North American family offices use a mixed approach,combining in-house capabilities with third-party support

283、,to serve UHNWIs.70 Family offices in Asia-Pacific follow a similar pattern,with 13%of family offices serving entirely in-house,7%acting as facilitators,and 80%adopting a mixed approach.71 In Europe,18%of family offices work exclusively in-house,15%act as service facilitators,and 67%use a mixed appr

284、oach.72 Through effective resource planning,most family offices also dedicate time and effort to fostering close client relationships.As more UHNWIs seek family offices to manage their wealth,WM firms are slowly but surely losing visibility and direct interaction with UHNWIs and risk diminishing cli

285、ent intimacy and engagement,with the family office acting as an intermediary between the firm and the client.To address this challenge,a few frontrunner banks have built in-house,multi-family offices.Barcelona-based Vctor Manuel Allende,Director of Private Banking for Caixabank,said,“In response to

286、heightened competition,we have launched a multi-family office focused on the UHNWI segment,shattering the glass ceiling that once limited large banks from competing with family offices.”Spanish multinational CaixaBank launched OpenWealth,a multi-family office serving those with investable assets abo

287、ve EUR 50 million.Asset advisory services include personalized solutions through collaboration with other WM firms.73 Singapores DBS Bank built a Multi-Family Office Foundry to offer clients wealth management investment services through a single integrated platform.This structure enables UHNWIs to c

288、hoose an agent/fund manager from the DBS team,a family member,or an external investment advisor.74Winning UHNWIs wallet share is critical to boost WM firms AUM,leading to higher management fees,which is their largest revenue driver.In response,WM firms need to figure out how to both compete and coll

289、aborate with family offices.A one-stop shop model gives WM firms tools to competeTo compete,WM firms will need to strengthen their one-stop shop ecosystem of services,as it is critical to retaining UHNWI clients and helping WM firms consolidate UHNWI wallet share.In response to the increasing fragme

290、ntation of providers across wealth management,it is crucial for WM firms to build capabilities that allow them to become a one-stop shop meeting their clients needs.From Belgium,Geert Roosen,head of Client Services and Business Development for Degroof Petercam,said,“To successfully engage UHNWIs,the

291、 true differentiator lies in bespoke services and the clients connection with their relationship manager.Discerning clients scrutinize the additional services you provide that other banks do not offer.”Traditionally,WM firms have strong capabilities in investment management and are trusted to provid

292、e financial value-78%of UHNWIs are likely to switch their primary wealth management firm in 202435World Wealth Report 2024added services.By leveraging all internal capabilities and combining them with external partnerships for non-financial value-added services offering a full suite of services as a

293、 one-stop shop(Figure 14)WM firms will increase client engagement and enhance UHNWI mind share.Jessica Douieb,Head of Wealth Partners at J.P.Morgan Wealth Management said,“Ultra-HNWIs present a myriad of complex needs,amplified by the intricacies that accompany greater wealth.Seeking a streamlined a

294、pproach,they gravitate towards a one-stop solution to simplify their lives.Establishing an ecosystem of third-party providers offering value-added services is paramount in meeting their multifaceted requirements effectively.”The initial step to building a support ecosystem is establishing both appro

295、priate internal capabilities and external collaborators,including third-party providers.For internally sourced services,identify the specialists and teams functioning on them within the firm to establish service centricity;this process will streamline improvement efforts and ensure that any service

296、sourced internally is aligned with individual client demands.From Norway,Per-Christian Thorsen,Executive Advisor,Nordea Private Banking,said,“We assemble a dedicated team of specialists for each UHNWI client,ensuring comprehensive service and access to our full suite of offerings.”In another example

297、,J.P.Morgan provides M&A services for passion investments,including sports.It launched a dedicated sports financing franchise to underwrite sports teams and serve elite clients in March 2024.75 With internal teams in place,WM firms can leverage third parties and a network of partnerships to enable a

298、ncillary value-added services.HSBC partners with concierge service provider Quintessentially to offer UHNWI clients personalized assistance and luxury experiences including booking a private island,private aviation,fine-dining establishments,or exclusive access to events worldwide.76 Ultra-HNWIs see

299、k diverse asset allocations,including alternatives,and demand multi-jurisdictional support.Non-financial services like exclusive networking and sustainable investment opportunities are increasingly crucial.Clients expect deep expertise and sought-after insights to navigate complex global markets.”Ni

300、c Dreckmann CEO a.i.,Julius Baer,SwitzerlandFigure 14.Build and orchestrate an ecosystem with strategically integrated touchpointsSource:Capgemini Research Institute for Financial Services Analysis,2024.InsuranceConcierge(medical,realestate,travel,education)Aggregated view of assetsin multiple juris

301、dictionsPortfolio performancemonitoringLifestyle adviceCredit solutionsIn-personinteractionswith RMsAccessto thirdparties andspecialistteamsDedicatedplatformBanking andadministrativeservices77%of UHNWIs say 24/7 access through digital channels is essential36World Wealth Report 2024Given the diverse

302、portfolio holdings of ultra-HNWI clients,sometimes across multiple financial institutions,there is a demand for aggregated views of their assets.We focus on delivering clients a comprehensive view of their portfolio,empowering them to effectively align their investment strategies with their financia

303、l life goals and legacy aspirations.”Ranjit S Samra Head of Product&Experience,J.P.Morgan Wealth Management,USADigital solution offers convenience and transparency to clients with complex asset structures Business challenge German multi-family office HQ Trust manages the wealth of private individual

304、s,families,churches,foundations,and institutional investors.It specializes in assisting those with complex assets and prioritizes quick response and meeting client requirements on a case-by-case basis,particularly for estates or trusts.Because client assets extend beyond typical classes equities,bon

305、ds,and gold the firm sought to offer convenience and transparency to all clients,including those with complex structures and alternative investments,such as art.Business solution The firms digital gateway,HQT One,offers unrestricted client access to assets,individual asset structures,documents,repor

306、ts,and exclusive analysis.The platform coordinates,structures,monitors,and evaluates asset information and documentation from banks,tax advisors,and auditors.It evaluates asset positions and annual performances via benchmarks and historical data that cover liquid and illiquid assets.Clients have 24/

307、7 access via the HQT app to review portfolio developments and change rationale.Analyzing stocks by sector or region can reveal trends such as regional outperformance and stock-specific highlights.Business impact HQT Ones centralized information portal boosts client satisfaction through transparency

308、and easy access.Clients make informed decisions and proactive adjustments while performing strategic evaluations,strengthening their bonds with HQ Trust,and fostering long-lasting relationships.HQT One features,such as multi-asset consideration,performance metrics,and accessibility,distinguish HQ Tr

309、ust in the market.As a result,the firm is broadening its client base from those initially interested in reporting solutions to clients exploring areas such as alternative investments.With the ecosystem set up,delivering services through clients preferred channels is crucial:while in-person interacti

310、on remains significant,digital channels are increasingly vital.More than three-quarters(77%)of surveyed UHNWIs say 24/7 access through preferred digital channels is an essential capability when selecting a WM firm.Moreover,some UHNWIs want a hands-on,digital-channel approach for DIY investing and to

311、 explore offerings and invest at their own pace.Ultimately,an omnichannel-based ecosystem,including digital platforms,will be necessary;this device-agnostic dedicated platform must provide flexible data access anytime,while allowing the scheduling of interactions among desired touchpoints(relationsh

312、ip managers,third-party partners,and other specialists).Weaving together primary financial services and a suite of value-added services by building and orchestrating a one-stop shop ecosystem for their most valuable clients will enable WM firms to become a trusted partner and not just a service prov

313、ider.37World Wealth Report 2024Monetize WM firm capabilities to create family office revenue streamsFamily offices typically partner with large banks and WM firms to leverage their balance sheets and access global deals.Undoubtedly,WM firms have a cybersecurity advantage over family offices based on

314、 robust IT budgets and dedicated security teams.Of the UHNWIs we surveyed,80%mentioned data privacy as crucial when selecting a WM relationship.As-a-service cybersecurity tools offer family offices data transparency and privacy safeguards through multi-factor authentication,role-based access control

315、s,andencrypted networks.By utilizing the breadth and depth of solutions already in place,traditional WM firms can increase their revenue and retain AUM share,despite resulting in a less direct relationship with UHNWI clients with the family office acting as an intermediary.As UHNWIs global needs inc

316、rease,WM firms are placed to support the establishment of family offices across multi-jurisdictions.Our HNWI survey results uncovered that 52%of UHNWIs want to set up a family office and want guidance from their primary WM firm in doing so.WM firms can support clients in establishing their family of

317、fice by understanding family dynamics through conducting deep dives with next-generation beneficiaries to help merge their priorities and define the family objectives.Further,they can help establish a governance system:WM firms can offer goal-setting support and protocols to define investment object

318、ives,and performance-monitoring parameters to help equip the new family office for growth.Another revenue stream includes service-offering expansion and support for existing family offices(Figure 15),by providing investment management and banking services to existing family offices.39%of wealth mana

319、gement executives said their firms are already offering custody services to family offices,and 51%said they provide tailored lending solutions.Family offices demand sophistication in products and services,and WM firms are responding by providing targeted offerings to meet their needs.The Ultra High

320、Net Worth Solutions Group at HSBC offers elite clientele direct access to global markets and investment banking services,cementing strategic partnerships with UHNWIs and family offices.77 Citi Private Bank focuses on intergenerational wealth transfer through its Citi Latitude program,serving 1,500 f

321、amily offices.78 Lombard Odiers Global Asset+offers operational,investment,and banking capabilities to 200+clients across single-and multi-family offices while providing services directly to UHNWIs.79 Northern Trusts Global Family Office(GFO)Technology suite offers the Wealth Passport platform to pr

322、ovide consolidation and greater sophistication for 500+clients across single-family offices alongside delivering services directly to UHNWIs.80Family offices and banks,while they may compete for some clients,also function as partners in serving the needs of high-net-worth individuals.A family office

323、 relies on banks for custody and other financial services,while banks benefit from the relationships and trust established by family office representatives with their clients.Ultimately,it is a symbiotic relationship and clients appreciate the collaboration between their family office and bank,ensur

324、ing their investments are well-managed and secure.”Philippe Perles Committee Member,Association of Swiss Asset and Wealth Management Banks;Senior Partner,Noveo Conseil,Switzerland52%of UHNWIs want to set up a family office with assistance from their WM firm38World Wealth Report 2024WM firms need a f

325、ull range of financial and non-financial services to retain primary-partner relationships with clients and especially with the UHNWI segment.Firms can use their technological capabilities as enablers by streamlining internal capabilities and exploring third-party partnerships.As a result,they can gr

326、ow their AUM organically through greater client engagement.Capabilities developed internally will further pave the way for increased revenue from additional services and unlock family office-as-a-service revenues.Figure 15.Servicing family office offers new streams of revenue while securing indirect

327、 relationships with ultra-HNWIsSource:Capgemini Research Institute for Financial Services Analysis,2024.Wealth management firmsProduct and services factory Wealth planning Family governance Trust administrationPlanning Insurance Alternatives AdvisoryInvesting Custody services Currency and trading ac

328、counts Tailored lending Corporate banking franchiseBanking solutions Multi-jurisdictional asset monitoring Documentation and reportingWealth management platform Cybersecurity training Best practices deployment Data security proceduresCybersecurity tools Lifestyle advice Concierge services Legal cons

329、ultation adviceValue-added servicesAs aserviceto.Family officesUltra-HNWI clients39World Wealth Report 2024ConclusionDuring current volatile times,divisive geopolitical conflicts,a longer-than-expected high interest rate environment,looming election nervousness,and more keep wealth management execut

330、ives awake at night.In an increasingly unpredictable 2024 environment,winning and retaining the lucrative ultra-HNWI wealth band has become essential to profitable growth.However,this segment is undergoing a behavioral shift as youthful beneficiaries and tech entrepreneurs massively join the very sm

331、all UHNWI segment.These investors are stepping away from exclusive primary WM firm relationships to find advisory expertise that meets their complex and very specific requirements.Family offices are seizing the opportunity to secure UHNWI business and loyalty through an aggregator and orchestrator r

332、ole for client-centricity and a range of convenient value-added services.Therefore,strategic and future-focused wealth management firms need to set their sights on retaining and winning UHNWI client mind share to boost their wallet share.But where should they begin?A threefold enabling initiative mi

333、ght help wealth management firms sustain current business while creating new revenue opportunities:Ignite engagement with HNWIs as market trends evolve during high instability.As the market emerges from unprecedented turbulence,be prepared to provide robust and tailored investment opportunities and ensure the right dynamic between wealth preservation and growth goals.Turbocharge AI-powered behavio