According to the study, “HNW Targeting and Retention Strategies” Most banks like Credit Suisse, JP Morgan, BNP Paribus Citibank, Morgan Stanley, Deutsche Bank, HSBC provide wealth management services and have a separate business unit consulting of consultants and product specialists to provide wealth assistance to HNW population. Private wealth management is delivered to high net worth individuals. This includes advice on use of various estates planning vehicles, business succession or stock option planning with the occasional hedging of derivatives for large blocks of stock. Traditionally, the wealthiest retail clients of investment firms demanded a greater level of service, product offering and sales personnel than that received by average clients. With an increase in the number of affluent investors in recent years, there has been an increasing demand for sophisticated financial solutions and expertise throughout the world.
High-net-worth individual (HNWI) is a term used by some segments of the financial services industry to designate persons whose investible assets (such as stocks and bonds) exceed a given amount. Typically, these individuals are defined as holding financial assets (excluding their primary residence) with a value greater than a specified given amount. Initially the HNW population was largely concentrated in the western countries of North America, however recent trends have shown that the population has begun to spread across the globe to cities such as Hong Kong, Dubai, Tokyo, London, Los Angeles to name a few. Furthermore the rise of emerging market over the past decade has triggered the upsurge of HNW population even in the South American and Asia Pacific region. The largest proportion of high net worth individuals in the world can be found in the North American region. Studies reveal that more than half of the HNW population resides in the North America. The global growth in HNI population can be attributed to factors like appreciation in equity and other asset classes and also in markets like commodities and real estate.
Before selecting a wealth manager, HNW’s look for multitude factors such as experience of the firm, the products and services offered, charges, quality of firm and even employee turnover.
In 2017, China’s top regulators unveiled reforms for the country’s wealth management industry aiming to reduce the risk of accumulating across its financial system. The major reform is to shift to ‘traditional’ asset managers. China’s asset management industry was dominated by ‘quasi’ asset managers including bank wealth management products and trust companies whose nature is fundamentally different from global definitions. The traditional asset managers include mutual funds and private funds.
HNI needs include the likes of buying a property in Dubai, buying a structured product, picking up a stake in a promising or upcoming business, funding a real estate project through debt or could be even looking at the idea of buying into a distressed asset, or writing a complex will.
Orange Business Services (France) and Additiv (Singapore), an expert in digital solutions for the financial market, have teamed up to offer digital wealth management service products. The cloud-based offerings will automate wealth management and address the strong growing demand for digital financial services from clients and the urgency to reduce operating costs by many financial institutions.
Due to constant increase in the number of high net-worth individuals all around the globe, this industry is expected to grow at an increasing rate in the coming years and shall see its roots expanding to regions of Africa, Latin America and Asia – Pacific.
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Ankur Gupta, Head Marketing & Communications