Tag Archives: Wealthmanagement

The transition from cassette tape to digital music in the wealth management industry

In 1963 Philips founded the cassette tape. It became very popular next to gramophone records and turntables. The cassette tape was one of the first, or THE first, portable music bearing players available to the mass market. These cassettes where suitable  for use with several players (cassette recorder or deck and Walkman) and, until the end of the 90’s, cassette tapes  were actively sold, having hailed a new era of music accessibility.

Over time, Philips again led the way in disruption and founded the Compact Disk (CD) in 1977, which became even more popular and as we know, still exists today. After some years, individuals could even create CDs themselves with music, movies or even documentation (legally or not, but that is not the focus in this case). People seized the opportunity for ownership. The CD then evolved into the less popular minidisk.

Today, we are all familiar with digital music e.g. the MP3, or online music portals like Spotify, ITunes and so on (all not from Philips by the way).

Parallel with the wealth management industry

The wealth management industry is evolving as well, but the transition is not going very smoothly and requires time (it goes slow!). Historically, as I have written in previous blogs already, the wealth management and private banking industry had a niche focus on the rich of this world that wanted to invest to grow their wealth. To make sure the rich were willing to store their funds at a particular bank, the bank went ‘all the way’ to win them as their client. Red carpet, expensive lunches, tickets for whatever event (I know I formulated it a bit short-sighted). And this still exists. But wealth management has developed to be available to ‘all’, not only the super-rich. Also, a (less rich, but still having enough cash) group called “mass affluent” came to be targeted by the banks. And so, this is where we are today as banks are increasingly looking to reach a broader group of (potential) clients (even so, this doesn’t mean that mass affluent clients receive the same treatment, which to some extent is understandable). Continue reading

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No digital? No joy!

Why wealth managers without an integrated digital offering are out of play

My last blog is already been quite a few weeks ago. It has been very busy on all fronts, but not with blogging on SocialFS. A recent visit to Hong Kong as well as several conversations with many interesting people in the wealth management industry from Europe, North America and Australia formed some interesting views around the use of digital tools within the wealth management industry.

Soon from now we might end up saying that wealth managers that are not meeting HNWI demands regarding digital are out of play. I had the honor to present the World Wealth Report in Hong Kong in June. This report shows that an average of 65% of the HNWI population across all age groups and wealth bands are thinking of leaving their wealth management firm when there is a lack of digital (enabled) services. For the younger HNWI population this is even 80%. This research has been conducted among over 4500 HNWI globally.

The report also shows that there is an increase in the preference for digital contact versus a decline on direct contact. (Please see the figure below).

Direct vs Digital

Continue reading