The observation is not all that surprising in a world where Western investors still appear in some respects to be shell-shocked by the effects of the 2008 financial crisis and its aftermath. A report issued recently by RBC Wealth Management and Capgemini also pointed to how Western investors are, in contrast to Asian counterparts, more concerned about wealth preservation.

Even so, the structure of wealth holdings in Asia are changing as the region develops, Andrea Muller told this publication in an interview.

“It is used to be that money in Asia was all family wealth and about the next generation….there is now a new generation of first-time wealthy and they tend to be very hands-on,” she said.  

“They are going to have a different focus and different dynamic, looking for high-Alpha strategies. It is about risk-aversion in the West and the search for yield and returns in the East,” Muller said, adding that more needs to be done in Asia to improve financial literacy.

The stakes for getting strategy right in Asia are huge. According to the RBC/Capgemini report mentioned above, there are estimated to be a total of 3.68 million high net worth ($1 million+ investable assets) individuals in Asia, as of 2012, a rise of 9.4 per cent year-on-year. And those persons hold $12 trillion of assets, not far behind the North America total, of $12.7 trillion.

Muller spoke after her firm commissioned a report, produced by CREATE-Research, stating that decisions of central banks will be the main force driving global markets for the next three years, according to 62 per cent of asset managers, fund firms and other investment professionals together overseeing $27.4 trillion of assets.

Getting personal

Among the report’s findings were that investment risks and demands have become more “personalised”, while asset managers have to ensure that their marketing does not become conflated with genuine thought leadership if they want to build trust with clients over the long term.

And Muller repeated a point made by others in the industry about how firms must not churn out products that clients don’t necessarily need.

“Investors don’t want product-push. What investors and institutions want are cutting-edge ideas and insights and they look for thought-leadership. We do more things that assist in education and thought leadership,” she said.

It makes sense for a firm such as Principal Global Investors, part of New York-listed Principal Financial Group, to stress thought leadership. PFG has $403 billion in assets under management and serves some 18.3 million clients from offices in Asia, Australia, Europe, Latin America and the US. In other words, it is a global big hitter.

Closer to its original home turf in the US, Muller pointed out that an obvious, but important trend has been the impact wielded by the Baby Boom Generation now entering retirement.

“They are going to be looking for investment solutions that satisfy a variety of GOALS, such as capital protection, dividends and low-volatility products,” she said, explaining that the type of products that will be sold include income-oriented products, target-date funds.

Given the sheer complexity of finance today, asset managers and advisors had to recognise there are limits on what clients, even supposedly more sophisticated ones, can cope with, Muller said. “Baby Boomers don’t want to have to figure all these details out. They want solutions containing embedded advice,” she said.

“Over the next 5 years almost 75 per cent of retail investor wealth will be held by Baby Boomers,” she said, with many of those people classified as high net worth.