This publication looks at other features of the annual Capgemini report on wealth management and trends.

Wealth management firms cannot avoid refreshing their fee structures to fit what high net worth clients want, with almost a third (32 per cent) of HNW individuals polled recently saying they were “uncomfortable” with levies charged.

That insight came from the annual Capgemini World Wealth Report for 2021, issued yesterday (see a report on its main findings). Among a number of features was its analysis of business operating models, both in terms of how they have changed over the past 25 years of the report’s existence, and what the future holds. Capgemini polled more than 2,900 people around the world in 26 markets.

Respondents to its survey said that their top concerns were transparency on the value proposition of a firm (49 per cent), value delivered (44 per cent), and fee levels (43 per cent). The report found that while a change towards performance and service-based fees is taking place, there is a “widening mismatch” between how fees are set and what clients want. 

Another source of frustration is that HNW clients who want a zero-fee trading commission cannot get these at their wealth management firms. 

The findings come at a time when the global wealth industry has seen a number of regulatory attempts to encourage fiduciary models of service delivery, such as in the US. 

Tech gives an edge
Another observation in the report is that technology is important in giving wealth firms an edge over competition, and in making client experiences more compelling – points long noted by this news service. 

“Artificial intelligence, advanced analytics, and alternative data are opening new frontiers in personalised client interactions with the delivery of superior investment performance,” it said.

“With COVID-19 lasting, virtual channels have become clients’ main engagement choice, and digital transformation has taken on new urgency,” it said. 

The report said that firms must be able to deliver a “WOW”-level of customer experience, and use data and analytics to engage with clients, improve profits and chalk up investment performance. Technology is also a vital tool in allowing wealth management firms to adjust rapidly to market trends and disruptions – as the pandemic has clearly demonstrated.

“Democratisation of data is going to be the new norm and its use is across the full lifecycle. This will be a key in advisors’ ability to truly become coaches of investors rather than simply managing portfolio alpha,” Joseph Nadreau, managing director, innovation and strategy, Wells Fargo Advisors, said in the report.