EY Global Wealth Research examines purpose, value and service as clients report willingness to pay more for personalized experiences

NEW YORK, April 22, 2021 /PRNewswire/ -- Over half (53%) of wealth management clients are willing to pay more for personalized service, according to the 2021 EY Global Wealth Research Report released today. In exchange for greater personalization, the majority of wealth management clients (71%) are willing to share personal data with their primary wealth manager, a higher proportion than those willing to share with doctors, retailers, technology firms and media platforms. As a result of the COVID-19 pandemic, however, 36% of respondents expect the relationship with their wealth manager or advisor to become less personal from a human interaction perspective.

Based on a detailed survey of 2,500 wealth management clients in 21 geographies, the 2021 EY Global Wealth Research Report uncovers what investors value in their wealth management relationships and how it changes across service models, engagement choices and value-aligned advice.

Continued focus on pricing and value

A majority (87%) of respondents are aware of trading and product fees, yet 42% remain concerned about hidden costs when working with their wealth manager, suggesting there is scope to improve transparency and education.  

Wealth management clients want to change the way they pay for specific wealth and investment services. For discretionary investment management, there is growing preference for performance-based fees, which create a stronger perception of alignment between charges and value creation. However, for basic wealth offerings like standard investment products and trading transaction services, an increasing proportion of respondents expect to receive them at no cost by 2024.

Mike Lee, EY Global Wealth & Asset Management Leader, says:

"Perceptions around value for wealth management products and services are rapidly changing. With basic investment products and services becoming available at very low costs, experiential factors will become the key drivers of pricing in wealth management. Leading firms will provide curated interaction points, allowing clients to enter the advisor-digital spectrum at their choosing and customize communications according to their evolving needs."

Clients place greater emphasis on purpose

Beyond purely financial outcomes, the research finds that wealth management clients are looking to build purposeful investment portfolios and wealth relationships. Worldwide, a majority (78%) of respondents have personal sustainability goals, yet 41% feel their wealth manager falls short in understanding their values. At the same time, awareness of specific environmental, social and governance (ESG) themes has increased over the past year.

In light of this, a major reallocation of investments could be in the cards – with 76% of respondents believing it is important to consider ESG parameters in their portfolios and impact investing is expected to grow 15% by 2024, reaching an average adoption level of 35%.

Alex Birkin, EY EMEIA Wealth & Asset Management Leader, says:

"Managers should offer end-to-end ESG investing journeys underpinned by a broad choice of ESG investing options, tailored guidance and advice, flexible educational options, supplemental research on important topics and clear accountability that ladders to their wider sustainability strategies."

D&I becomes increasingly important as consolidation of relationships gains interest

According to the research, nearly half of those surveyed (49%) want to consolidate all their financial relationships in one place – across private banking, wealth, insurance and investment services – but 78% of those who would like to consolidate have yet to choose a sole provider. Even among investors who prefer multiple financial providers, 25% say they would pay more to access a consolidated view of their investment portfolios, pointing to a greater need to deliver an ecosystem of financial services.

One deciding factor in provider choice will be a firm's diversity and inclusion (D&I) practices. Wealth management clients surveyed increasingly view D&I as a sustainability goal and a key driver of provider choice with 48% seeing D&I efforts as important when evaluating a wealth manager. This rises among millennials (67%), the ultra-wealthy (70%) and in markets such as China (68%), India (71%), Italy (71%) and Norway (73%).

Firms that fail to demonstrate empathy will risk losing a significant proportion of their clients, even as the wealth of women and other under-represented groups is growing.

The research finds that wealth management providers must do more to enhance their understanding and support of traditionally under-served groups. For example, 54% of LGBTQ clients believe wealth providers could do more to understand their sustainability goals, compared with just 35% of heterosexual clients. Meanwhile, only 21% of those who identified themselves as white North Americans feel ill-prepared to meet their financial goals, but this figure rises to 40% among those who identified themselves as Hispanic North Americans and 41% of those who identified themselves as Asian-Americans.

Nalika Nanayakkara, EY Americas Wealth & Asset Management Consulting Leader, says:

"Wealth managers able to offer niche investments, bespoke advice or customized protection will become increasingly popular as global demand for more holistic approaches to wealth management rises. The key to achieving this is through collaboration with other providers, from health insurers to competitors, in order to deliver an ecosystem for clients. This will have profound implications for wealth managers, who will need to decide between becoming a one-stop shop or a specialist provider." 

For more information on the 2021 EY Global Wealth Research Report, please visit ey.com/wealthresearch.

Notes to editors

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2021 EY Global Wealth Research Report methodology

EY Global Services Limited worked with Savanta to conduct a comprehensive survey of 2,500 wealth management end-clients in 21 geographies (North America – US, Canada, Latin/Central America including Argentina, Brazil, Chile, Mexico; Europe including France, Germany, Italy, Luxembourg, Switzerland, UK and the Nordics including Norway and Sweden; and Asia-Pacific including Australia, China, Hong Kong, India, Japan and Singapore) to understand what they value most in their wealth management relationships across service models, engagement choices and value-aligned advice.  

EY profiled wealth management end-clients not just by traditional segments, such as age, gender, wealth and location, but also by risk appetite, life stages, profession, sexual orientation, race and ethnicity and psychographic profiles. EY also asked respondents to rate their knowledge in managing their finances and divided them into low, average and high categories depending on their knowledge of common and complex financial products.

Brendan Beaver
EY Global Media Relations
+1 908 642 5615
[email protected]

SOURCE EY

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