Summary

Globally over 25% of HNW individual’s portfolio is invested via advisory services, with markets in Asia Pacific displaying the strongest affinity for these mandates. Although discretionary services remain the preferred option – particularly in developed markets – global HNW demand for formal advice is expected to increase in light of capital markets volatility. Wealth managers should use advisory mandates offering to capitalize on this demand to draw assets from execution-only platforms.


Key Findings

  • Emerging markets show a greater propensity for advisory services than developed countries. Taiwan has the highest penetration of advisory mandates, with 71.2% of the HNW portfolio held in these services.
  • The US HNW advisory asset management market is worth $1.5tn, representing the greatest opportunity in absolute terms. China is the second-largest market, followed by Australia.
  • On the global level, the balance between access to advice and retaining control over investments is the main factor fueling HNW demand for advisory mandates, although regional preferences vary.
  • The second most important reason is price sensitivity. When cheaper than discretionary mandates, advisory services are likely to appeal to HNW investors.
  • As competitive pricing fuels demand for robo-advice, most wealth managers agree they should invest in automated investment services to complement their existing offering.



Critical success factors

  • Leverage market volatility – Increased market volatility motivates investors to seek professional management – especially those who lack the knowledge and time to manage their portfolio. For HNW investors who are hesitant to place full control in the hands of a professional, wealth managers will do well to offer advisory services.
  • Embrace technology – Robo-advisors are piquing the interest of HNW investors for their digital platform capabilities and competitive pricing. Incumbent wealth managers will do well to embrace technology by launching their own digital services and leveraging their brand familiarity and relationships with existing clients.



The report “Advisory Asset Management: HNW Demand and Drivers” provides detailed analysis of HNW investors’ preferences and attitudes towards advisory asset management services across the globe.

In depth, it provides the following -

  • Estimates the value of HNW assets invested via advisory mandates.
  • Compares HNW individuals’ willingness to use advisory services in different countries.
  • Identifies target client groups for advisory asset managers.
  • Compares drivers for advisory mandates between countries and regions.
  • Examines the client targeting strategies of advisory portfolio managers.
  • Explores robo-advisors’ potential to disrupt traditional discretionary asset management business.
  • Analysis about competitive landscape.



Companies mentioned in this report: Bank of Singapore, BNP Paribas Wealth Management, Charles Schwab, Citibank, Credit Suisse, Hargreaves Lansdown Asset Management, HSBC Private Bank, JP Morgan Chase, Julius Baer, Merrion Capital, OCBC, Rathbones, RBC Wealth Management, Rowan Dartington & Co, Seven Investment Management, UBS Wealth Management, W H Ireland, Walker Crips Group.


Scope

  • Emerging markets show a greater propensity for advisory services than developed countries. Taiwan has the highest penetration of advisory mandates, with 71.2% of the HNW portfolio held in these services.
  • The US HNW advisory asset management market is worth $1.5tn, representing the greatest opportunity in absolute terms. China is the second-largest market, followed by Australia.
  • On the global level, the balance between access to advice and retaining control over investments is the main factor fueling HNW demand for advisory mandates, although regional preferences vary.
  • The second most important reason is price sensitivity. When cheaper than discretionary mandates, advisory services are likely to appeal to HNW investors.
  • As competitive pricing fuels demand for robo-advice, most wealth managers agree they should invest in automated investment services to complement their existing offering.




Reasons To Buy

  • Discover how much HNW wealth is invested via advisory mandates.
  • Identify markets offering the greatest growth potential for advisory asset management.
  • Learn why HNW investors choose to opt for advisory services, and how these motivations differ between countries, particularly in emerging and developed markets.
  • Gain an insight into best-practice examples from competitors operating within the advisory mandates landscape.