Editorial & Advertiser Disclosure Global Banking And Finance Review is an independent publisher which offers News, information, Analysis, Opinion, Press Releases, Reviews, Research reports covering various economies, industries, products, services and companies. The content available on globalbankingandfinance.com is sourced by a mixture of different methods which is not limited to content produced and supplied by various staff writers, journalists, freelancers, individuals, organizations, companies, PR agencies Sponsored Posts etc. The information available on this website is purely for educational and informational purposes only. We cannot guarantee the accuracy or applicability of any of the information provided at globalbankingandfinance.com with respect to your individual or personal circumstances. Please seek professional advice from a qualified professional before making any financial decisions. Globalbankingandfinance.com also links to various third party websites and we cannot guarantee the accuracy or applicability of the information provided by third party websites. Links from various articles on our site to third party websites are a mixture of non-sponsored links and sponsored links. Only a very small fraction of the links which point to external websites are affiliate links. Some of the links which you may click on our website may link to various products and services from our partners who may compensate us if you buy a service or product or fill a form or install an app. This will not incur additional cost to you. A very few articles on our website are sponsored posts or paid advertorials. These are marked as sponsored posts at the bottom of each post. For avoidance of any doubts and to make it easier for you to differentiate sponsored or non-sponsored articles or links, you may consider all articles on our site or all links to external websites as sponsored . Please note that some of the services or products which we talk about carry a high level of risk and may not be suitable for everyone. These may be complex services or products and we request the readers to consider this purely from an educational standpoint. The information provided on this website is general in nature. Global Banking & Finance Review expressly disclaims any liability without any limitation which may arise directly or indirectly from the use of such information.


Nick Tate, Chief Growth Officer,Verbalisation

The average age of high net-worth individuals (HNWIs) is changing. And with it their collective perceptions of, and behaviour towards, private banking and wealth management. But how are private banks and wealth managers changing their behaviours to pattern match this new breed? A CapGemini’s 2016 study stated:

“ More HNWI wealth (35%) was essentially liquid, held in bank accounts or as physical cash, compared to 32% that was overseen by wealth managers. Under-40 HNWIs were even less likely to turn to wealth managers (28%)”

That’s an alarming fact.

Nick Tate
Nick Tate

Why? Because in the crucial search for lifetime customer value, it seems younger HNWIs are being turned off by more traditional solutions and embracing technology. Undoubtedly, this represents a challenge for the private wealth service sector. If it’s to survive and thrive moving forward, it’s crucial to disrupt itself, but that doesn’t start with technology. It starts with really understanding the customer.

Private banking and wealth management is not a bubble in which its customers are suddenly different people. They’re the same audience who go to the cinema with their kids, or get a coffee from Starbucks. Yes, ofcourse wealth delivers greater levels of access and luxury, but that is still underpinned by a more general shift in expectations towards convenience and service. HNWI’s expect technology to help, not hinder. In fact, even more so they expect technology to fuel experience.

With that in mind, it’s imperative we understand the world outside private wealth in order to positively drive change from within it. I can think of three big questions which immediately come to mind.

Question 1: How does selling long-term returns fit into today’s world of instant gratification? If we expect immediacy in every aspect of our lives does, should, and could that same rule apply to our investments? Flexibility and convenience now overrule tradition and the old order. If we consider that people are making money earlier, then it’s logical to suppose that playing the long game is hardly appealing to their psychology.

Perhaps Nutmeg have the right idea? The business instigated new fee structures in February 2017 with Martin Stead, Chief Executive of Nutmeg, stating:

“Fees are the only part of your investment performance that you can control. The fees you pay can make a significant difference over time. Even a tiny reduction can make a massive saving over 20 or 30 years.”

Irrespective of how wealthy you are, savings are savings.

Question 2: In a world filtered through digital interfaces, how important is the more personal human touch? Undoubtedly the more digital we are, the more human we must become, but being human is different to demanding face time. Technology is bricolage and should be bought together based on user value, not for technology’s sake.

69% of HNWIs are now using online/mobile banking, but only a quarter of wealth managers currently offer digital channels beyond email (SOURCE: PWC/2016). No wonder disruptors like Wealthify and MoneyFarm are challenging the market. It’s hardly surprising products and services which seems so in tune with innovating modern HNWI tech solutions would be breaking the market. Private banking needs to take a long hard look at its existing service offer and marketing tech stacks, as this disruption will only become more acute. Technical debt is not an excuse to not test and learn new products, services and client engagement strategies. Off platform innovation doesn’t need to interrupt existing technical stacks, but it is required for private banks to transform themselves beyond business as usual.

Question 3: If personal contact is the way forward (or at least part of the way forward), then what is the perceived value in it (if there is any)? As with retail banking, self-service is a phenomenon which will sweep through private banking and wealth management businesses. And although a huge amount of value is placed on advice and good counsel, what does this experience deliver and can it ‘out-value’ data?

So, some rather big themes here. The answer surely lies in truly knowing and empathising with an audience.

Undoubtedly, there is huge opportunity to disrupt private banking and wealth management. But this will only be possible if there is a significantly better understanding of their audiences and future target customers. It is likely there will be an immediate need to disrupt the market and create new rules of engagement – and with it new value. As wealth management and private banking become homogenous and commoditised with other financial services, the importance of strong brand identity and service offer is key, but it must be rooted in customer need.

Moving forward, how people advocate your service and endorse your business will become crucial, as will having a clear verbal strategy and positioning. ‘Peer-to-peer’ and ‘member-to-member’ business models have always driven the financial markets, and never has it been more important than when set against the social web. If brands are built and burnt by conversation, so are wealth managers and private banking services. A strong identity backed by a customer-centric, digitally-enabled (and premium) product/service offers will form the foundation of success.

To do this we must first understand the psychology of HNWIs.

  1. What drives them beyond money?
  2. What is truly valuable to them, both today and tomorrow?
  3. What influences their decisions? Where does the rational meet the emotional?
  4. How can brands (and their employees) differentiate themselves beyond the traditional service model in order to keep a seat at the top table?
  5. What is the language of risk and how do we describe it?

These are the same sets of questions any brand or sector that is on the brink of disruption should be asking themselves. The question is, who’s in the best position to get ahead?