World Wealth Report 2020

WORLD
WEALTH
REPORT
2020
Contents
Preface 3
Executive summary 4
Wealth managers must navigate an uncharted, post-pandemic world

without a playbook 6
- Amid hyper-connectivity and economic and market ambiguity, unusual financial

trends are emerging 6
- North America and Europe surpassed Asia-Pacific to lead global performance in
population and wealth growth 7
- While the populations of higher wealth bands grew the most in 2019, wealth itself
was constrained 9
Hyper-personalize to meet client expectations and capture future

growth segments 11
- 2020 volatility may drive asset adjustments as well as higher client expectations
regarding value justification for advisory fees 11
- As firms look to bolster revenues amid uncertainty, sustainable investing and
value-added services are the way forward 13
- Hyper-personalized offerings can address varied HNWI expectations and lock
in firms’ future growth during uncertainty 16
Safeguard profits with a focus on critical touchpoints and operating

model optimization 18
- Wealth management Achilles’ heel: A lack of personalized information and services

along the client journey 20
- Technology can enhance client engagement and distribution channels to boost
growth, revenue opportunities 25
- A smooth transition to Open X is essential as firms prioritize acquisition, advisory,
and value-added services 28
Turning challenges to opportunities 32
Partner with Capgemini 33
Methodology 34
Ask the experts 36
Key contacts 37
About us 39
2
World Wealth Report 2020
Preface
At the turn of the new decade, it appeared that the record-long bull market – albeit caffeinated in 2019 by
unprecedented government stimuli – would continue roaring into the ’20s. Developed markets were leading global
wealth growth for the first time since 2012, with North America up by double digits. The ultra-high-net-worth wealth
segment was adding to its global ranks. And despite an undercurrent of trade and geopolitical tensions, global wealth
was climbing.
It was within this environment that we conducted the Global High-Net-Worth Insights Survey between January and
February 2020. We sought to understand the mindsets of the world’s wealthiest individuals in relation to their trust
and confidence in their wealth firms, their satisfaction with investment advice and returns delivered, their comfort
level with fees, and their take on personalized services. The survey revealed that HNWIs are increasingly willing to
engage with digitally capable BigTechs and suggested that firms could mitigate disruptor encroachment by focusing
on the most vulnerable client journey touchpoints.1 Our research also revealed that real-time access to information
and complex global interdependencies seemed ready to spark an evolution of novel individual investment patterns
and market growth trends.
Few predicted the unlikely black swan that would usher in the biggest health crisis and its severe social and economic
impact. Instead of new investment opportunities, it was the novel coronavirus that descended with such ferocity that
markets plummeted to their lowest since 1987. The pandemic was unexpected by most, unplanned for, and largely
unprecedented. While there is no historical guidance for what may happen next, the virus and its impact on the
global economy have materially changed the investment outlook for 2020. However, as virologists seek to flatten the
curve, wealth managers can raise the bar and safeguard profits by staying in tune with the evolving priorities of many
HNWIs – particularly as sustainability investments that uphold environmental and social priorities gain prominence in a
post-pandemic environment.
In the face of today’s extraordinary uncertainty, forecasts, models, and assumptions may merit review and potential
adjustments. Wealth firms that revisit their cost structure and distribution channels can build more resilient and agile
business and operating models. This unpredictable period may also present opportunities to reach underserved or
new investors, as demand for advice tends to increase during periods of market turbulence and the strategic case for
sustainable investment advances. Now, as wealth management firms are hard-pressed to get the most bang from
pressurized budgets, it will be wise to determine which critical capabilities (such as hyper-personalization and value-
added services) have the most potential to boost client experience and firm profits. Based on each wealth firm’s
core competencies and business goals, the shared ecosystem of the impending Open X2 era offers a direct line to
competitive advantages and profits by offering a mix of adaptable approaches such as build, buy, and partner with
trusted third parties.
Your firm’s response to the events of 2020 and the ability to effectively engage with clients whose priorities may be
shifting can define the future of your business. We hope the insights and real-world examples in our report spark your
innovative decision making throughout the months ahead. We are here to help.
Anirban Bose
Financial Services Strategic Business Unit CEO &
Group Executive Board Member, Capgemini
1
High-Net-Worth Individuals (HNWIs) are defined as those having investable assets of USD1 million or more, excluding
primary residence, collectibles, consumables, and consumer durables.
2
Open X represents an enhanced approach to open banking characterized by a seamless eXchange of data and resources to
eXpedite product innovation for excellent customer eXperience.
3
Executive summary
A post-pandemic world influenced by as-it-happens news sharing and
complex global interdependencies has tossed wealth management
firms into uncharted waters
• Dull by today’s standards, 2019’s idling economy spawned 8.8% growth in the high-net-worth individual (HNWI)
population, while global wealth grew by 8.6% amid good stock market performance.3
• Developed markets led 2019 global wealth growth (the first time since 2012), with North America leading at
11% growth and surpassing the traditional leader, Asia-Pacific.
• The ultra-HNWI segment increased most in terms of population, by 9.1%, but its wealth growth (8.2%) was
less hearty.
• As for what lies ahead, ever-increasing access to real-time information, coupled with today’s uncertainty
and complex global interdependencies, may spark an evolution of novel individual investment patterns and
unexpected market trends.
Within the uncertain COVID-19 environment, hyper-personalized

offerings and socially responsible investment options will be
essential to meeting client expectations, retaining current business,
and capturing growth opportunities
• 2020 unpredictability has suppressed HNWI risk appetite, as expectancies around value for advisory fees
creep upward.
––The harsh COVID-19 investment environment will likely increase client expectations on value delivered for
fees charged.
• Firms that expand product offerings with sustainable investment options and value-added services can open
new doors to revenue.
––Environmental, Social, and Governance (ESG) investments are likely to take on even more significance for
HNWIs and wealth management firms in a world increasingly impacted by environmental and social risks.
• Proactive care to clients’ unique needs during transition points in their life and financial journey can also help
wealth management firms tap future growth segments.
• Aided by technologies such as artificial intelligence (AI) and analytics, firms can hyper-personalize the customer
experience (CX) to uniquely meet the individual needs of existing as well as prospective clients.
3
For the purposes of our analysis, we separate HNWIs into three discrete wealth bands:
Millionaires next door: those with USD1 million to USD5 million in investable wealth
Mid-tier millionaires: those with USD5 million to USD30 million
Ultra-HNWIs: those with USD30 million or more.
4
Wealth management firms can safeguard profits in uncertain times,

with a focus on critical touchpoints and operating model optimization
• In the face of today’s unprecedented uncertainty, wealth firms that revisit their cost and clients’ fees structure
and distribution channels can build more resilient and agile business and operating models.
• Firms can maximize the impact of their investments through a laser focus on capability building to identify the
critical 20% of the value chain that impacts 80% of CX and profitability (80/20 principle).
• A lack of personalized information/services delivery is proving to be the Achilles’ heel for wealth management
firms, but a focus on the stages of acquisition, advisory, and value-added services can help safeguard a client
base that is increasingly willing to engage with BigTechs.
• Across the firm’s value chain too, the stages of acquisition, advisory, and value-added services emerge as the
critical 20% for future growth as emerging technologies enhance internal capabilities in these areas.
• Embracing the Open X mindset, where FS and non-FS players collaborate effectively in an open environment,
can enable firms to prioritize capability-building in critical focus areas while leveraging ecosystem collaboration
to quickly and cost-effectively fill capability gaps in other areas.
5
Wealth managers must navigate an
uncharted, post-pandemic world
without a playbook
Amid hyper-connectivity prepared for the impact of macroeconomic trends that
never fully materialized. It was a wait-and-watch year
and economic and market that featured a global economic slowdown, disruptive
ambiguity, unusual financial international trade wars, and political tectonics such
trends are emerging as Brexit, Hong Kong social unrest, and Latin American
power plays.
The biggest health crisis of the past century, COVID-
Nevertheless, around the world, the high-net-worth-
19, has severely impacted billions of lives, both socially
individual (HNWI) population and financial wealth each
and financially. With a projected 3% decline in the
grew by nearly 9% in 2019.
global economy, 2020’s financial challenges may not
be over.4 However, our trends study of 2019 market Rising trade tensions and geopolitical unrest took a
growth indicates that despite a dwindling economy, toll on business confidence, investment decisions, and
financial markets could prove resilient and boost the global trade. However, a notable shift to monetary
global outlook.5 policy accommodation across regions – and tech
sector performance optimism – calmed tensions
Like a tea kettle that refused to whistle, pent up
around financial market sentiment and activity.
anxiety characterized pre-pandemic 2019 as markets
Figure 1. Number of HNWIs by region (millions), 2012–2019
CAGR 2012–2018: 7.1% Annual growth 2018–2019: 8.8%

% Change
19.6 2018–2019
20 18.1 18.0 0.2
0.2 0.2 0.6
16.5 0.8 Africa 6.1%
15.4 0.2 0.6 0.6
14.7 0.7 0.7
13.7 0.2 0.6 Latin America 2.7%
15 0.2 0.6 5.2
HNWI population (millions)
0.1 0.5
12.0 0.5 0.6 4.8 4.8
0.5 0.6 Middle East 9.3%
0.1 0.6 4.5
4.2 Europe 8.7%
0.5 4.0
0.5 3.8
10 6.3 North America 10.9%
3.4 5.7 5.7
5.2
4.8 Asia-Pacific 7.6%
4.7
4.3
3.7
5
6.2 6.1 6.5

4.7 5.1 5.5
3.7 4.3
0
2012 2013 2014 2015 2016 2017 2018 2019
Note: Chart numbers and quoted percentages may not add up due to rounding.
Source: Capgemini Financial Services Analysis, 2020.
4
Congressional Research Service, “Global Economic Effects of COVID-19,” May 1, 2020; https://fas.org/sgp/crs/row/R46270.pdf.
5
World Federation of Exchanges, “First Quarter 2020 & Full Year 2019 Market Highlights,” May 7, 2020;
https://www.world-exchanges.org/news/articles/world-federation-exchanges-releases-first-quarter-2020-full-year-2019-
market-highlights.
6
Figure 2. HNWI financial wealth by region (USD trillions), 2012–2019
CAGR 2012–2018: 6.7% Annual growth 2018–2019: 8.6%

74.0 % Change
2018–2019
70.2 68.1 1.7
75
63.5 1.7
1.6 2.9
58.7
56.4 1.5 2.5 Africa 6.5%
2.6 8.8
HNWI financial wealth (USD trillions)
52.6 1.4 2.4 8.7

1.4 8.4 Middle East 10.2%
46.2 1.3 2.3 8.0
2.3 16.7 Latin America 4.4%
50 2.1 7.4
1.3 7.7 15.9 15.4
1.8 7.7 14.7 Europe 8.8%
7.5 13.6
13.0 North America 11.0%
12.4
19.8 21.7
10.9 19.6 Asia-Pacific 7.9%
18.0
25 16.6
16.2
14.9
12.7
18.8 21.6 20.6 22.2

14.2 15.8 17.4
12.0
0
2012 2013 2014 2015 2016 2017 2018 2019
Note: Chart numbers and quoted percentages may not add up due to rounding.
In Q1 2020, the impact of COVID-19 wiped out over robust Q4 2019 gains as trade uncertainty faded in
USD18 trillion from markets globally over the course of December when the United States and China rolled
February and March 2020, before recovering slightly out their Phase One trade deal. The markets benefited
in April.6 Based on our analysis of various market from measures taken by the US Federal Reserve to
and economic parameters, a quick estimate shows a pump billions of dollars into the financial system after
decline of 6–8% in the global wealth till the end of tumult in mid-September. They also were aided by
April 2020 (vs the end of 2019). optimism surrounding technology companies. The top
five contributors in the market surge were tech stocks
North America and Europe – Apple and Microsoft accounted for nearly 15% of
S&P gains.7
surpassed Asia-Pacific to
In Canada, both HNWI population and wealth posted
lead global performance in increases of more than 8% in 2019. Diminishing
population and wealth growth US-Canada trade tension had a significant impact on
Canada’s equities market as well, with the S&P/TSX
For the first time since 2012, the Asia-Pacific region
Composite rising more than 19% following a nearly
did not lead global HNWI wealth growth (or decline
12% decline in 2018.8
in 2018). North America was the driving force in
2019, with an 11% increase in both HNWI population Growth performance in Europe topped that of key
and wealth. It accounted for 39% of global HNWI emerging regions – Asia-Pacific and Latin America –
population gains and 37% of HNWI wealth growth in 2019, with HNWI population and wealth growth
(USD2.2 trillion). at around 9%. European central banks supported
Eurozone stock markets by stepping back from tighter
In the United States, the HNWI population shot up 11%
monetary policy. Economically sensitive sectors
in 2019 compared with 1% in 2018. US equities made
6
World Federation of Exchanges, “First Quarter 2020 & Full Year 2019 Market Highlights,” May 7, 2020; https://www.world-
exchanges.org/news/articles/world-federation-exchanges-releases-first-quarter-2020-full-year-2019-market-highlights.
7
CNBC, “The stock market boomed in 2019. Here’s how it happened,” December 31, 2019;
https://www.cnbc.com/2019/12/31/the-stock-market-boomed-in-2019-heres-how-it-happened.html.
8
GLC Asset Management, “GLC 2019 Market Year in Review,” January 6, 2020; https://www.glc-amgroup.com/news-insights/
market-reviews/2019-market-year-in-review.html.
7
such as manufacturing and information technology of international investors to China’s A-shares market
performed well, but safe-haven consumer staples and – one of the world’s largest – with a total value of
real estate sectors were also top performers. USD7,903 billion.9
Amid the uncertainty surrounding Brexit throughout Hong Kong stocks capped off a gloomy 2019 with a
2019, both HNWI population and wealth in the United December rally supported by a government resolution
Kingdom grew more than 6%. to manage the US-China trade deal. Also, its residential
property price index rose by more than 5% during
Despite robust market performance from a few of
2019.10
its countries in 2019, APAC overall fell behind the
average (9%) global HNWI growth rate by expanding Other major Asian markets – India, South Korea, and
just 8%. Singapore – recorded weak progress in 2019, which
led to sub-par growth in HNWI population and wealth
Key Asian countries – Hong Kong, China, and Taiwan –
for the entire region. Anemic performance in these
experienced double-digit HNWI population and wealth
markets was the result of economic slowdown and
growth. On the heels of more significant government
weakening local currencies.
support for the domestic economy, China’s CSI 300
stock index climbed upward. The United States, Japan, Germany, China, and France
continued as the top five countries by total HNWI
Before the novel coronavirus began to affect China in
population in 2019, with their contribution increasing
late 2019, the country reaffirmed its commitment to
significantly over 2018. The top four countries
expanding its markets and to improving the domestic
accounted for nearly 62% of the HNWI population in
business environment in the People’s Republic for
2019, and they were responsible for more than 67% of
foreign companies; as a result of a trade war truce
global HNWI population growth.
with the United States. The move shifted the attention
Figure 3. HNWI population by country, 2018–2019
(thousands) 2019 2018

5,909
7,000
61.6% of global HNWI population
5,322
6,000 (61.1% in 2018 and 58.4% in 2012)

HNWI population
5,000
3,387
3,151
4,000
3,000
1,466
1,350
1,317
1,189
2,000
702
591
635
556
438
392
Canada 362
Switzerland 384
1,000
South Korea 235
Spain 224
Russian Federation 200
Kuwait 188
Saudi Arabia 191
Brazil 186
174
Taiwan 162
Hong Kong 153
145
Sweden 129
Thailand 127
Indonesia 129
243
215
203
199
Norway 182
178
Austria 155
142
134
134
Australia 266
India 256
284
263
235
207
172
298
Italy 275
287
Netherlands 259
0
United Kingdom
United States
Japan
Germany
China
France
Annual
growth (%) 11% 8% 9% 11% 11% 6% 14% 8% 8% 11% 7% 3% 3% 5% 8% 10% 6% 7% 4% 10% 12% 7% 10% 6% 3%
2018–2019
Ranking
change – – – – – – – – – +1 –1 – – – – +1 –1 – – – – – +2 +2 –2
2018–2019
9
Schroders, “Eight charts that explain the growing importance of China A-shares,” September 24, 2019;
https://www.schroders.com/en/ch/wealth-management/insights/markte/eight-charts-that-explain-the-growing-importance-
of-china-a-shares.
10
Global Property Guide, “Hong Kong’s property market remains resilient, but uncertainty persists,” February 18, 2020;
https://www.globalpropertyguide.com/Asia/Hong-Kong/Price-History.
8
Within the top-25 HNWI-population markets, a producer Saudi Aramco raising USD25.6 billion in a
noteworthy shift was Sweden’s gain of more than 10% much-anticipated IPO that propelled the Saudi stock
in HNWI population growth to move up two places exchange into the top bourses globally.11
(to rank 23). The Netherlands moved up, too, to join
Compared with 2018, both HNWI wealth and
the top-10 list as a result of robust real estate sector
population growth were more evenly distributed
growth and an increase in market capitalization.
across all wealth bands in 2019. The ultra-HNWI
segment was responsible for 32% of the global
While the populations of higher increase in HNWI wealth (USD5.9 trillion), whereas, in
wealth bands grew the most in 2018, it accounted for 75% of global wealth decline.
With restricted ultra-HNWI wealth growth – and with
2019, wealth itself was constrained all wealth bands almost equally driving growth – is
Population and wealth grew at an even pace in 2019 access to information and the speed of communication
for millionaire-next-door and mid-tier millionaire leveling the playing field for wealth growth?
wealth bands. In contrast, ultra-HNWI wealth growth In today’s volatile times, complex global
was below average compared with population growth interdependencies – combined with increasing access
– an unusual trend. to and speed of information – may drive unusual
In 2019, ultra-HNWI population and wealth grew 9% market growth trends
and 8% over 2018, respectively. Higher wealth bands Investment based on market emotions: Despite
often make investments beyond equity markets – economic stagnation in many markets, there was a
such as private equity – that can be unstable during surge in equity market investment in 2019 around the
uncertain times. A possibly more cautious approach by world, with improved market sentiments driven by
ultra HNWIs and a bias toward owning local stocks may favorable government measures in various countries.
also have restricted their wealth growth.
Unprecedented global market scenarios: The size
However, the Middle East region recorded higher of the stock market relative to the size of the economy
ultra-HNWI population and wealth growth than the was at an all-time high in 2019. Overvalued markets
global average in 2019. The energy industry led an and overvalued tech stocks in the United States
equity market surge in Q4 2019 with state-owned oil
Figure 4. Global number of individuals per wealth band (2019) and growth (2018–2019)
Number of HNWI population HNWI wealth

individuals % of HNWI
2019 CAGR Growth CAGR Growth wealth
(thousands) 2012−2018 2018−2019a 2012−2018 2018−2019a 2019
Ultra-HNWI 183.4 9.1% 8.2%

7.2% 5.9% 33.6%
USD30m+ (0.9% of total) (+12.9PP) (+14.5PP)
Mid-Tier Millionaires 1,757.6 8.9% 8.8%

7.1% 7.1% 22.6%
USD5m–USD30m (9.0% of total) (+11.2PP) (+11.4PP)
17,666.6 8.8% 8.8%

Millionaires Next Door 7% (+8.9PP) 7.1% (+9.2PP) 43.8%
(90.1% of total)
USD1m–USD5m
a. PP in parentheses denotes the change in growth percentage in 2018–2019 over 2017–2018.

11
Zawya, “Four IPOs raise $26bln in GCC in Q4 2019,” February 18, 2020;
https://www.zawya.com/mena/en/markets/story/Four_IPOs_raise_26bln_in_GCC_in_Q4_2019-SNG_167591980/.
9
and elsewhere helped to drive up HNWI wealth.12 The future is uncharted for markets and investors
Throughout the year, both equities and bonds across the globe as individual investment patterns
performed equally well, breaking the usual negative evolve in the wake of increasing information
correlation between these asset classes.13 transparency, speed of worldwide communications,
and complex geopolitical interdependencies.
Dramatic movements in financial markets colored
the first four months of 2020 as new coronavirus Undoubtedly, 2020 will also be a year of unusual
pandemic implications unfolded every day. Amid market growth trends.
negative global GDP growth projections, markets
crumbled in March 2020. The S&P 500 rode a
precarious seesaw, and in only 22 trading days fell
30% from a record high on February 19, 2020.14 But
despite the anticipated recession and decline in GDP,
and record unemployment numbers, equity markets
gained during much of April 2020. An additional
USD2.3 trillion stimuli from the US Federal Reserve
jolted the S&P 500 index, which advanced 25% from
March lows.15
12
CCN, “Overvalued Stock Market Has a Major Pop Risk – And It Just Lit Up,” January 16, 2020;
https://www.ccn.com/overvalued-stock-market-has-a-major-pop-risk-and-it-just-lit-up/.
13
CNBC, “In a rare occurrence, both stocks and bonds are having a great year,” June 26, 2019;
https://www.cnbc.com/2019/06/26/in-a-rare-occurrence-both-stock-and-bonds-are-having-a-great-year.html.
14
CNBC, “This was the fastest 30% sell-off ever, exceeding the pace of declines during the Great Depression,” March 23, 2020;
https://www.cnbc.com/2020/03/23/this-was-the-fastest-30percent-stock-market-decline-ever.html.
15
Financial Times, “Federal Reserve action boosts equity and credit markets,” April 9, 2020;
https://www.ft.com/content/b8c1b7f4-1380-4ce3-8c52-a040c3d3d878.
10
Hyper-personalize to meet client

expectations and capture future
growth segments
2020 volatility may drive grew 11%, and in Q1 2018, equities were the top asset
class. Nevertheless, when wealth dipped 3% in 2018,
asset adjustments as well as clients immediately moved to cash/cash equivalents,
higher client expectations making it the largest asset class in Q1 2019.
regarding value justification Stock markets were bullish in 2019 amid global
for advisory fees economy inertia, and equity regained the top spot.
Equities replaced cash and cash equivalents to become
Considering market volatility over the last 24 months, the most significant asset class in Jan–Feb 2020 to
we believed an analysis of asset allocation trends account for 30% of the global HNWI financial portfolio
spanning the previous three years was merited. The – up nearly four percentage points (pp) from Q1 2019
results revealed a link between robust global wealth – while cash/cash equivalents slipped to the second
and equity asset class dominance. However, after a position at 26%, down three pp from Q1 2019.16
year of wealth decline, investors shifted to safer assets
such as cash and fixed income. In 2017, HNWI wealth
2017 2018 2019

Total wealth (USD trillion) 70.2 68.1 74.0
Wealth growth (%) 10.6% (3.0%) 8.6%
Figure 5. Asset allocation, Q1 2018, Q1 2019, Jan–Feb 2020 (global)
100%
9.4% 13.0% 12.9%
16.8% 14.6%
15.8%
75% Alternative Investmentsa
15.8%
Percentage of assets (%)
17.6% 17.1% Real Estateb
50% Fixed Income

27.2% 25.2%
27.9% Cash & Cash Equivalents
With 2020
likely being Equity
25%
a volatile
year, what will
30.9% 25.7% 30.1% asset allocation
look like in
Q1 2021?
0%
Q1 2018 Q1 2019 Jan–Feb 2020 Q1 2021
a. Includes structured products, hedge funds, derivatives, foreign currency, commodities, private equity.
b. Excludes primary residence.
Note: The chart reflects HNWIs’ asset allocation at the time we conducted the survey (between January and February 2020).
Question asked: “What percentage does each of these asset classes approximately represent in your CURRENT financial
portfolio?” Chart numbers may not add up to 100% due to rounding.
Source: Capgemini Financial Services Analysis, 2020; Capgemini Global HNW Insights Survey 2020.
16
The 2020 Global High Net Worth Insights Survey was conducted during January–February 2020, and therefore HNWI
responses may not reflect significant COVID-19 outbreak impact.
11
Within a portfolio that before now had typically been delineate their concerns about fees in 2019, HNWIs
dominated by cash/cash equivalents, Japan exhibited cited transparency (47%), performance (41%), and
the most exciting trend as equities became the most value received versus fees charged (39%).
favored asset class for the first time since we started
And in terms of fee structure, HNWIs preferred
tracking it in 2010. Japanese HNWIs allocated 31%
performance- and service-based fees instead of an
of their portfolio to equities (eight pp more than the
asset-based fee structure. This preference, when
previous year), the highest among all asset classes.
compared to the fee structures HNWIs actually receive
North America recorded the highest equity allocation today, reflects a further disconnect between what
at 39%, significantly higher than in other regions. HNWIs expect and what they receive from their WM
As discussed earlier, robust equity markets and firms. More than a third (35%) of HNWIs said they
the financial stimulus helped to restore trust in would prefer a fee structure based on investment
equity assets. performance compared with a quarter (26%) of HNWIs
whose fees are structured around performance
As 2020 unfolds, and the unprecedented impact
already. This expectation will be fueled further during
of COVID-19 continues to be tallied, it remains to
a potential decline period (the year 2020), as COVID-
be seen whether or not more asset-class allocation
19 implications are revealed. Only 13% of HNWIs said
adjustments are on the 2021 horizon. We will continue
they desired an asset-based fee structure while a
to monitor this trend.
much higher percentage (24%) is currently bound to
Fees also are under enormous pressure as gaps asset-based fees.
between HNWI expectations and reality widen amid
The gap between existing and desired states for
economic volatility
performance-based fee structures was highest among
Around a third (33%) of HNWIs said they were HNWIs aged 60 or above (22 pp) and millionaires next
uncomfortable with the fees their firms charged in door (16 pp).
2019, as concerns and high expectations grew. This
These critical expectation gaps merit consideration
number is expected to increase further in 2020 due
because HNWIs say they may switch firms as they are
to volatile markets in the current pandemic scenario,
dissatisfied with fees perceived to be too high. In the
and HNW clients continue to scrutinize fees. Comfort
next 12 months, 22% of HNW individuals say they plan
levels varied among age groups, with 24% of those
to change their primary wealth management firm,
under-40 uncomfortable with fees charged compared
with high fees being the top reason (for 42% of HNWIs
with 50% of HNWIs aged 60 or older. When asked to
who wish to switch firms). Interestingly, Latin America
Figure 6. HNWIs want a performance/service-based fee structure vs. asset-based fee structure,
Jan–Feb 2020 (global)
Fee structure Existing Desired
Based on investment
performance
35%
26%
Based on overall service

quality (not just investment
performance)
11% 15%
% As a percentage of assets
24%
13%
Questions asked: “How do you currently pay your wealth manager for wealth-related services?” and “In an ideal world, how would
you like to pay your wealth manager for wealth-related services?”
12
and North America had the highest percentage of

HNWIs, 55%, and 47%, respectively, citing high fees as Education is key. Working with
their primary reason for switching firms. individuals educationally provides
Over the past few years, clients have been demanding a sustainable framework for long-
more value delivered against the fees paid to term financial planning moving
firms, and in the increasingly volatile and uncertain forward. This would be a key
environment that lies ahead, the voice for this demand component of what responsible
will become louder. sustainable investing should be for
the long term."
As firms look to bolster revenues — Joel Carpenter
amid uncertainty, sustainable Director – Marketing, Asia, St. James‘s
investing and value-added Place Wealth Management, Singapore
services are the way forward

The growing interest in sustainable investing Value-added services can also positively influence
offers firms a high-potential product opportunity.17 client experience. Our survey revealed that 43%
With environmental risks becoming more and of HNWIs globally believe additional services can
more prominent, it is not surprising that customers positively impact their experience with the firm.
recognize the importance of sustainability, a A more granular look into the trends across the
concept that is increasingly impacting the wealth extremes of age and wealth bands indicated that
management industry. HNWIs younger than 40 and the ultra-HNWI segment
Funds focused on socially responsible investing have were driving interest in value-added services.
been a rare bright spot in 2020 market activity – In fact, within both wealth bands, younger HNWIs also
which offers a signal for sustainable investors and showed a significantly higher willingness to pay for
could serve as a proof point for how HNWIs can trust value-added services.
environmental, social, and governance (ESG) funds in
turbulent markets. The cross-section of ultra-HNWIs younger than 40
was the most bullish, with almost half interested
In the first four months of 2020, investors poured in value-added services, and 80% of interested
more than USD12 billion into funds that invest in ESG
individuals also willing to pay for such services. High
practices, according to investment research platform
interest and willingness to pay makes it lucrative for
Morningstar Direct – doubling the YoY amount that
ESG funds attracted.18 firms to experiment with value-added services for this
sub-segment.
We explore the sustainable investing trend further on
page 15. A deeper dive into these segments revealed that the
most sought value-added services among this cross-
section of ultra HNWIs younger than 40 were:
Increased demand for sustainable 1. Real estate investment advice

investing options is being driven 2. Tax planning
3. Legal consultation
by wealth transmission. Younger
4. Inheritance advice
clients are very interested in 5. Services catering to investments of passion (e.g.,
sustainable investing." art, wine, collectibles, luxury cars, yachts, etc.).
— Geoffroy Vermeire An excellent example of taking client experience to
Member of the Management Board, Van the next level with the help of value-added services
Lanschot Kempen Wealth Management, is HSBC Jade, a unique service for those with complex
Belgium needs and investible assets greater than USD1 million.
17
Sustainable investing is an investment strategy of incorporating environmental, social, and governance (ESG) factors into the
investment portfolio. HNWIs who invest sustainably prefer to invest in companies, corporations, and funds to generate
financial returns along with measurable social and environmental impact.
18
The Wall StreetJournal, “ESG Investing Shines in Market Turmoil, With Help From Big Tech,” May 12, 2020;
https://www.wsj.com/articles/esg-investing-shines-in-market-turmoil-with-help-from-big-tech-11589275801.
13
Figure 7. Ultra-HNWIs under 40 are very interested and willing to pay for value-added services, Jan–Feb 2020 (global)
Millionaires Next Door Ultra-HNWIs

(<40 yrs)
HNWIs
80%
55% 48%
38%
(60+ yrs)
HNWIs
35% 59%
3% 27%
% of custom ers interested in % of custom ers willing to pay for

value-added services value-added services
Questions asked: (1) “How important is it that your primary wealth management firm provides value-added services?; Respond
based on this sliding scale: 1 = Not at all important, 4 = Neither important nor unimportant, 7 = Extremely
important.” The above values represent ratings of 6 and 7.
(2) “How willing would you be to pay additional fees for any value-added services offered by your wealth
management firm?; Respond based on this sliding scale: 1 = Not at all willing and 7 = Extremely willing.” The
above values represent ratings of 6 and 7.
Jade offers an exclusive combination of tailored needs: inheritance management (45%), education
relationship management, sophisticated wealth about investment management (40%), and financial
offerings, and premium lifestyle services to fulfill advice at critical life stages (40%).
HNWI needs. The proposition targets clients that land
between the high-end mass affluent and ultra-HNWI • Older investors planning to transfer wealth:
segments.19 Another segment in transition is older HNWIs
planning to pass their wealth on to others. With
Beyond addressing existing gaps, proactively catering increasing life expectancy, this segment will also
to the unique needs of customers during transition maintain a prolonged relationship with their firms,
points is critical to tap future growth segments and they also provide a crucial touchpoint for firms
As HNWIs move across essential transition points in to engage with the next generation of clients.
their life and financial journey, their future loyalty can However, here too, lower satisfaction often results
be safeguarded by wealth firms that map out a life- when firms lag in addressing the segment’s unique
stage investment strategy for them and effectively needs: robust retirement planning (46%), assistance
address their unique needs. with new digital tools (34%), and trust/estate
management (32%).
Critical life transition points include:
Firms still lag behind in their pursuit to capture
• Young investors entering the HNWI segment:
wealth transfer opportunities, with only 33%
Individuals just entering the HNWI segment through
of the respondents to our wealth management
wealth creation or inheritance. Our survey revealed
executive survey saying their firm had successfully
that 64% of HNWIs under 40 are considering or
implemented a strategy to maximize wealth-
plan to consider investment returns as their primary
transfer opportunities. 31% are struggling to
source of income within the next five years. This
implement their strategy, and 36% of the firms are
segment can be expected to engage enthusiastically
yet to create a strategy.
and represents robust future revenue potential for
firms. However, less than half of these clients are • Mass-affluent segment: Finally, the third
satisfied with how firms currently meet their unique segment in transition includes the potential future
19
Hubbis, “Murli Adury: Why HSBC Jade's Special Qualities are Ideal for Asia's HNWIs,” Murli Adury, June 11, 2019;
https://hubbis.com/article/murli-adury-why-hsbc-jade-s-special-qualities-are-ideal-for-asia-s-hnwis.
14
HNWIs want sustainable investing (SI) options

Younger ultra-HNWIs are SI enthusiasts
27% of overall HNWIs express HNWIs in Asia-Pacific (excl. Japan) and
27% interest in SI products Latin America are most drawn to SI products
17% 40% 41% 16%

Millionaires vs Ultra- of HNWIs vs of HNWIs
Next Door HNWIs <40 yrs. 60+ yrs.
Wealth managers can tap a cross-section of younger ultra-HNWIs because nearly half (49%) say they are interested in SI products.
HNWIs will commit more assets to sustainable investing – and WM firms are ready
HNWIs plan to allocate 41% of their Wealth management firms are well prepared to meet the demand
portfolio to SI products by the end of
2020, and 46% by the end of 2021 8% No plans to provide
12% SI options
46%
41% Will soon provide
SI options Offer sustainable
80% investing (SI) options
BlackRock recently introduced a Global Impact Fund that enables investors to direct
2020 2021
capital to businesses dedicated to solving major world problems.1
HNWIs appreciate SI investment for social/environmental impact, but also recognize financial value
Higher returns and lower risk drive HNWI interest in SI products
39% 33% 29% 27% 26%

Higher returns Sustainable investments I now understand ESG Better sustainable I want to give back
from sustainable seem sound, less funds better than investment offerings to society
investment products speculative previously from firms
As HNWIs demand SI products devoted to environmental risks, firms play catch up

HNWI clients favor SI products focused on environmental risks and climate
change, followed by ethical and effective corporate governance systems. HNWIs’ Firms’ perception of
focus-area HNWI
However, there is a slight mismatch in firms’ perception of HNWI priorities. priority focus-area priority
Effectively managing environmental risks 55% 43%

Addressing climate change, reducing carbon footprint 55% 45%
Effective and ethical corporate governance systems 54% 63%
Socially conscious business policies and practices 52% 55%
Investors who implemented ESG equity strategies in 2020 beat broader benchmarks, which boosted HNWI faith in SI. Since the
beginning of last year, UBS's 100% sustainable investment portfolio in Asia more than doubled its assets to USD1 billion and
demand has been up since the COVID-19 outbreak. Growing SI popularity is fueling expectations that favorable policies toward
companies doing social and environmental good will continue to attract investments long after the pandemic.2,3
1
International Investment, “BlackRock launches sustainable investing-focused Global Impact fund,” April 16, 2020;
https://www.internationalinvestment.net/news/4014013/blackrock-launches-sustainable-investing-focused-global-impact-fund.
2
Bloomberg, “ESG Stock Resilience Is Paving the Way for a Surge in Popularity,” Claire Ballentine, March 31, 2020;
https://www.bloomberg.com/news/articles/2020-03-31/esg-stock-resilance-is-paving-the-way-for-a-surge-in-popularity.
3
Bloomberg, “Virus Boosts Rich Asian Interest in Sustainable Investing Trend,” Alfred Liu, April 3, 2020;
https://www.bloomberg.com/news/articles/2020-04-02/virus-boosts-rich-asian-interest-in-sustainable-investing-trend.
15
HNWIs, many of whom are being targeted by • Personalized portfolio construction and tailored
new digital players. Incumbent firms may find it advice: Using data analytics and machine learning to
challenging to capture this segment once they start assess the investor’s trading history and risk profile,
their HNWI journey as digital natives. firms can create customized portfolios so clients can
Interestingly, only a third of the executive survey achieve their specific financial goals.
respondents said their firm offers tailored solutions They can also leverage technology to analyze
for this segment. However, 55% of respondents client behavior and provide advice tailored to their
also said that although they are not catering to the individual context. Charles Schwab’s Project Bear
mass-affluent segment now, they plan to soon. program uses AI to scan its client base to find
With HNWI segments displaying unique preferences investors who may potentially react to market
and financial goals, especially at key transition points, volatility and stop them from possibly making poor
addressing these needs will be critical, especially investment decisions.20
during today’s uncertain environment exacerbated
• Customized client reporting: Instead of using
by the public health crisis. Technology-driven hyper-
different dashboards to track a single client’s
personalization is an approach firms can employ to
portfolio of investments, organizations are creating
fulfill these urgent requirements.
a comprehensive view of the client’s investments
with the help of APIs and delivering insights using
multiple data sources to serve clients in a more
Acing the client experience is also personalized manner.
about delivering great investment As an example, Addepar, a wealth management
management capabilities through platform, with the use of data analytics, provides
a broader lens by addressing a personalized portfolio aggregation and reporting for
wider array of needs and services registered investment providers to serve their clients.21
that clients require." One size does not fit all. In an increasingly volatile
— Kerry Ryan environment that is rewriting the rules of interaction
Director, Global Go to Market Lead, and success, hyper-personalization can enhance the
Wealth & Asset Management, client experience through data-driven advice and
Salesforce, US reporting.
Successful client engagements

Hyper-personalized offerings are now defined by knowing
can address varied HNWI everything about your client —
expectations and lock in firms’ from their family to their business
future growth during uncertainty — a full 360-degree view that can
be used to guide and coach as part
Technologies such as artificial intelligence (AI) and of service offerings."
analytics can help firms enhance CX by providing
personalized solutions and services in diverse areas: — Andy Wang
Global Head of Wealth & Asset
• Bespoke risk profiles: Organizations can leverage Management, Salesforce, US
advancements in behavioral sciences and sentiment
analysis to interpret clients’ risk profiles at a more
granular level rather than being limited to five or six
predefined profiles for the entire client base.
20
Fortune, “Schwab’s ‘Project Bear’ Uses A.I. to Predict When Investors Are Getting Nervous – And Warn Them Against Making
Bad Decisions,” Chris Taylor, July 10, 2019; https://fortune.com/2019/07/09/schwab-uses-a-i-to-predict-nervous-investors/.
21
Addepar, https://www.addepar.com/, accessed April 2020.
16
UOB Private Bank prepares the next generation of Asia’s business heirs
for success
Singapore-based United Overseas Bank (UOB) offers a wide range of financial services, including consumer
banking, wealth management, private banking, and commercial and corporate banking. Founded in 1935, UOB
is a leading bank in Asia with a global network of more than 500 branches and offices spanning 19 countries and
territories across Asia-Pacific, Europe, and North America.
Business objective: The great wealth transfer from Baby Boomers to their children is underway, with nearly USD9
trillion expected to change hands over the next two decades. In Asia alone, high-net-worth individuals (HNWIs)
with assets of USD5 million or more will pass on as much as USD2 trillion to their next-generation heirs.22 However,
wealth transfers present challenges and opportunities for wealth management firms. For instance, millennial
clients may have very different advisory and service expections from their parents. This is borne out in research
that shows close to 30% of the children of HNWIs leave their parents’ wealth manager.23
UOB Private Bank is bucking this trend. Given the increase in intergenerational wealth transfer in the region, the
Bank recognized the need to engage its clients and their children to prepare the next generation for success as
they take on future responsibilities and leadership roles in family businesses.
Strategic implementation: UOB Private Bank created the Next-Generation Programme to bring together
younger HNWIs to network and to exchange ideas with their peers, and to learn from leading technology
companies around the world on how to tap digital trends to prepare their family businesses for the future. The
initiative offers an environment for participants to nurture their ideas as they prepare to take over the reins of
their family businesses in time to come.
The three-part program includes leadership and technology modules, as well as an internship. The leadership
module equips participants with management and financial skills such as how to make sound investment and
business decisions. The technology module introduces participants to emerging technologies likely to impact
their businesses and prepares them to better navigate technology disruption. Finally, participants complete an
internship at a FinTech startup or technology firm through the Bank’s ecosystem partners such as The FinLab, an
innovation accelerator, or equity-crowdfunding platform OurCrowd.
Benefits/results: The UOB Private Bank Next-Generation Programme prepares the participants for success as
future leaders of their family businesses. This initiative provides them a platform to foster friendships and to tap
the insights and thinking of captains from various industries. The practical training and networking opportunities
offered by the Next-Generation Progamme was instrumental to UOB Private Bank being named Best Private Bank
for Millennials by The Banker in 2019. UOB is the first Asian bank to win the award.
Sources: Capgemini Financial Services Analysis, 2020; World Wealth Report 2020 Executive Interviews.
22
Markets Insider, “More Than $15 Trillion in Global Wealth to be Transferred by 2030,” June 26, 2019;
https://markets.businessinsider.com/news/stocks/more-than-15-trillion-in-global-wealth-to-be-transferred-
by-2030-1028310838.
23
GlobeNewswire, “Intergenerational Wealth Transfer: Seizing the HNW Opportunity,” October 22, 2019;
https://www.globenewswire.com/news-release/2019/10/22/1933386/0/en/Intergenerational-Wealth-Transfer-Seizing-the-
HNW-Opportunity.html.
17
Strategy for uncertain times
Safeguard profits with a focus on
critical touchpoints and operating
model optimization
In the eye of a perfect storm – such as floods and pandemics – are considered the
number-one industry disruptor, with almost 60%
The wealth management industry is in the midst
rating it as high impact. Potential competition from
of a high-pressure tempest as economic forces,
BigTechs did not rank among the top disruptors
competition from new entrants, and client
though this may be an area that requires more
expectations mount. Our global survey of wealth
considerable attention.24
management executives revealed that natural events
Figure 8. The wealth management industry faces disruption on multiple fronts, Mar–Apr 2020 (global)
Impact of natural events

such as pandemics
Changing client profiles
Global economic slowdown
and expectations
59%
35% 39%
The great wealth transfer

and uncertainty regarding
31% Wealth 31% Impact of technology and
change in business models
future customers management
industry
Fee pressure due to zero
disruptors Geopolitical instability
trading commissions and
increasing shift towards 29% 29%
passive products
26% 26%
Changing market dynamics
through increasing Threat of new entrants such
information transparency as BigTech firms
Question asked: “How much will the following factors impact wealth management firms in 2020?; Please rate on a scale of 1–7,
where 1= minimal impact, and 7= very high impact.” The above values represent ratings of 6 and 7.
Source: Capgemini Financial Services Analysis, 2020; World Wealth Report 2020 Executive Interviews.
24
BigTechs are large, data-driven technology firms such as Amazon, Apple, Facebook, Google, Alibaba, etc.
18
After robust market performance in 2019, the new decade began on a promising note. Within months,
however, COVID-19 had leveled unprecedented uncertainty. The urgent health crisis and collective concern
over the high social toll became the focus of individuals as well as businesses.
The cascading economic impact of the pandemic quickly became glaring, with enterprises shuttering and
unemployment soaring. Global financial markets suffered knock-out blows in the first quarter, with many
indexes dropping by more than 20% and oil prices hitting negative territory.25 Tech stocks may have driven
the market in 2019, but by early March 2020, the novel coronavirus had decimated nearly USD460 billion of
BigTech market cap.26
As markets slowly revive, powerful business lessons remain etched in our shared experience:
• The nature of disruption rarely allows sufficient time for strategic reaction.
• Therefore, digital capabilities have become central to business continuity.
• The ability to scale up or down quickly is a crucial skill.
• Physical assets can sometimes be a liability – look what happened to oil!27
The takeaway for wealth management executives? Business models that empower their firm’s resilience and
agility to prioritize the client journey are critical to achieving operational and profit goals.
Enter the 80–20 principle, in which 80% of all and then align high-impact client touchpoints with
outcomes are determined by 20% of all inputs. 28 those objectives. Once firm executives pinpoint the
We applied the principle to both the wealth most critical 20% of the value chain, they can focus on
management client journey and to the firm building capabilities that boost client engagement in
operating model to identify high-impact areas for the aligned touchpoints and explore ways to reduce
customer experience (CX) and firm profits. costs in lower-impact areas. Particularly within today’s
uncertain environment, astute prioritization can
The takeaway? Instead of trying to do the nearly
maximize overall benefits to the firm and positively
impossible, recognize the firm’s most important goals,
affect revenues.
Figure 9. Wealth management client journey and firm operating model
Client journey touchpoints
Researching Product/ Firm Receiving Personal- Receiving Accessing General Interactions Receiving
information service or selection portfolio ized educational Executing portfolio communi- with value-
about the investment and advice updates market transactions information cation with specific added
firm information onboarding about new information wealth experts in services
search products/ manager the firm
services
Wealth management firm operating model
Customer Customer Developing & Executing Value-added

Reporting
acquisition onboarding managing portfolio transactions services
Regulatory compliance
25
BBC, “Coronavirus: Stock markets suffer worst quarter since 1987,” March 31, 2020; https://www.bbc.com/news/business-52113841.
26
CB Insights, “The Covid-19 Outbreak Has Erased Nearly $460B Of Big Tech’s Market Cap,” March 10, 2020;
https://www.cbinsights.com/research/coronavirus-facebook-apple-microsoft-google-amazon-impact/.
27
The New York Times, “What the Negative Price of Oil Is Telling Us,” Neil Irwin, April 21, 2020;
https://www.nytimes.com/2020/04/21/upshot/negative-oil-price.html.
28
Investopedia, “80–20 Rule,” February 19, 2020; https://www.investopedia.com/terms/1/80-20-rule.asp.
19
The past few years have seen tremendous changes in beliefs (globalization, international
cooperation), in jurisdictions perceived to be safe and predictable (US, UK) and in the
role of technology in our lives. More recently, the global pandemic drove division (social
distancing) and unity. As the crisis subsides, we will have to consider to what extent these
developments should shape where we invest, where we locate assets, and how I should
engage with my advisors, balancing digital interaction and face-to-face solutions."
— Alexis Calla
Chief Investment Officer, Private Banking & Wealth Management, Standard Chartered Bank, Singapore
Wealth management Achilles’ backdrop, investors are similarly keen to access their
account information quickly to gain assurance about
heel: A lack of personalized their assets.
information and services Our survey of high-net-worth individuals, conducted
along the client journey just before the pandemic stoked worldwide fear in
mid-March 2020, revealed that investors are least
In today’s fear-of-missing-out information age, data is
satisfied at touchpoints related to personalized
a lifeline for businesses and individuals. The ubiquity
information or services from their firm. More than
of e-commerce has sparked research-intensive
60% of HNWIs reported unsatisfactory experience
consumer behavior when it comes to purchases or
during their attempts to research information
significant decisions. With the novel coronavirus as a
Figure 10. Firms are missing an opportunity to wow HNWIs in personalized information/ services,
Touchpoints with lowest CXa Wow impact of touchpointsb
Personalized updates about

new products services 60% 44%
Researching information
61% 48%
More than 40% of
about the firm respondents said a
positive experience at
these touchpoints highly
Receiving educational market impacts their overall
information 63% 42% perception of the firm.
Receiving value-added
services
64% 43%
a. Percentages in the chart represent HNWIs who are not satisfied with their experience at the touchpoint.
b. Percentages in the chart represent HNWIs for whom a good experience at the touchpoint will strongly improve
overall firm perception.
Questions asked: (1) “For each of these interactions (touchpoints) with your primary wealth management firm, rate your
satisfaction with the service provided. Please use this sliding scale: 1 = Not at all satisfied, 7 = Extremely
satisfied.” The above values represent ratings 1–5.
(2) “To what extent will the quality of experience at each of the following interactions (touchpoints) impact your
overall perception of your primary wealth management firm?” The above values represent percentage of
HNWIs who chose the option “A good experience at this interaction will drastically improve overall firm
perception.”
Sources: Capgemini Financial Services Analysis, 2020; Capgemini Global HNW Insights Survey 2020.
20
about a firm, regarding personalized updates about good experiences at these touchpoints profoundly
new wealth offerings, when receiving educational affect their overall impression of a firm, and this
market information, and regarding value-added percentage may go up as a result of COVID-19 impact.
services. Given the current uncertainty, we expect the The proportion was higher (i.e., around 50%) for
experience and satisfaction levels to have dropped HNWIs younger than 40 for whom these touchpoints
further since our survey. generate the highest wow factor.
HNWIs aged 50–59 were the most dissatisfied with Including top-notch client experience as part of
their experience at touchpoints related to information the delivery of personalized information/services
access and value-added services. In terms of regions, is crucial for wealth management firms because
the lack of satisfaction was most pronounced among these touchpoints are the most vulnerable to
HNWIs in Europe (more than 65%) and Japan (more BigTech encroachment.
than 80%). We believe dissatisfaction may intensify
during the pandemic crisis as demand for digital HNWIs expect BigTechs to deliver personalized
services mounts. information or services better than incumbent firms.
While less-than-stellar CX at these touchpoints does The top five touchpoints in which HNWIs believe
not characterize core wealth management services, BigTechs can outperform incumbent firms relate to
it represents a missed opportunity to wow clients. information access or value-added services.
More than 40% of the HNWIs we interviewed say
Figure 11. HNWIs believe BigTechs outpace incumbent wealth management firms in wow-ability,
% HNWIs who strongly agree that _____ firm is more likely to provide excellent service at the touchpoint
Wealth management BigTech
Researching information about the

13% 31% 18 pp
firm and its capabilities
11% Receiving value-added services 29% 18 pp
Receiving educational market

11% 29% 18 pp
information
13% Accessing portfolio information 30% 17 pp
Receiving personalized updates about

12% 29% 17 pp
new products and services
Note: pp denotes how much higher is the percentage of HNWIs who rate BigTechs as more likely to provide
excellent service.
Question asked: “For each of the following interactions, which institution – your wealth management firm or a BigTech firm – do
you think is more likely to provide an excellent service?; Please use this sliding scale: 1 = My wealth management
firm is more likely to provide an excellent service, 7 = A BigTech firm is more likely to provide an excellent
service.” Ratings 1 and 2 represent HNWIs who strongly agree that their wealth management firm is more likely
to provide excellent service, while ratings 6 and 7 represent HNWIs who feel so about BigTech firms.
21
This is not surprising, when you consider that more and HNWIs’ warm and fuzzy perception of BigTechs is
more digitally savvy HNWIs seek and prefer to receive especially concern-inducing when reflected in tandem
information via online channels. Self-service through with their openness to wealth management offerings
website emerged as the top channel of preference from BigTech firms . While 74% of HNWIs said they
for HNWIs when it came to firm or product research, are willing to consider BigTech wealth management
receiving updates, and executing transactions. offerings, the number jumps to 94% among those who
BigTechs lead in personalized online/mobile CX say they may switch their primary wealth management
thanks to technology advances firm in the next 12 months.
Alibaba’s online and mobile shopping website Taobao HNWIs in Latin America and Asia-Pacific (excl. Japan)
has evolved its push notifications from general, to expressed the highest likelihood to adopt wealth
targeted, to personalized to enhance CX by reducing management offerings from BigTechs. In Japan and
unnecessary notifications and boosting message North America, the interest in adopting BigTech
content specificity.29 offerings increases dramatically for HNWIs who are
likely to switch firms in 12 months.31 In terms of age
In addition to automated suggestions and a personalized
groups, HNWIs younger than 40 are most inclined, with
homepage, Amazon’s website showcases top lists such
as Bestsellers, Hot New Releases, Movers and Shakers, nearly 90% saying they are willing to adopt offerings
Most Wished For, and Most Gifted, to make customers’ from BigTech firms.
research and decision-making process easy.30
Figure 12. HNWIs are very open to adopting wealth management offerings from BigTech firms, by region (%),
Jan–Feb 2020
Customers Customers
overall likely to switch
78% 92%
Customers Customers
overall likely to switch Europe
61% 91% Customers Customers

overall likely to switch Customers Customers
overall likely to switch
North America 93% 98%
72% 100%
Asia Pacific
Customers Japan
likely to Customers Customers
Customers switch firms overall likely to switch
overall in
12 months
94% 96%
74% 94%
Latin America
Global
Note: Questions related to BigTech perceptions were posed only to those respondents who said they were familiar
with BigTech services (64% of overall global HNWI survey participants)
Question asked: “If technology firms such as Google, Apple, Facebook, Amazon, Alibaba, or Tencent were to offer wealth
management services, would you consider becoming a client? (Yes/No)”
29
Alibaba Cloud, “Push Notifications Evolved: Taobao Knows You Better Than You Know Yourself,” November 8, 2019;
https://www.alibabacloud.com/blog/push-notifications-evolved-taobao-knows-you-better-than-you-know-yourself_595527.
30
MerchantWords, “How Sellers Can Leverage Amazon’s Approach to Personalization,” October 25, 2018;
https://www.merchantwords.com/blog/amazon-disruption-shopping-personalization.
31
Of HNWIs familiar with BigTech services, more than 8% in Japan and more than 26% in North America are likely to switch
their wealth management firm.
22
Customers have come to expect Big Techs have clearly taken a

a hyper-personalized experience step ahead in terms of the ability
based on their interactions to collect customer data, analyze
with BigTech firms. Even with it using algorithms and AI, and
marketing communications, use it to personalize services and
Amazon’s suggestions aren’t product offers. It will be important
perceived as aggressive marketing for wealth management firms to
practices, since they’re so enhance their data processing and
intelligent and close to our needs." personalization technologies as
— Francesco Bracchi quickly as possible."
Deputy Chief Operating Officer, Banca — Pierre Dulon
Profilo, Italy CEO, Azqore, Switzerland
As BigTechs gain financial services ground, wealth most vulnerable to BigTech encroachment, three
management firms will have little choice but to stages of the client journey emerge as areas
enhance digital customer engagement – quickly. of focus for firms: acquisition, advisory, and
value-added services.
In a side-by-side look at our analyses of touchpoints
that evoked the least HNWI satisfaction and those
Figure 13. Touchpoints where wealth management firms can boost the wow factor, and hedge against BigTech
incursion
Researching Product/ Firm Receiving Personal- Receiving Accessing General Interactions Receiving
information service or selection portfolio ized educational Executing portfolio communi- with value-
about the investment and advice updates market transactions information cation with specific added
firm information onboarding about new information wealth experts in services
search products/ manager the firm
services
61% 60% 63% 64% 64%
18 PP 17 PP 18 PP 17 PP 18 PP
48% 44% 42% 43%
Touchpoints with least client Touchpoints most vulnerable to BigTech Wow impact
satisfaction PP denotes how much higher is the % denotes HNWIs for whom
% denotes HNWIs not satisfied percentage of HNWIs who rate BigTechs a good experience at the
with their firm’s service at the as more likely to provide excellent service touchpoint will strongly improve
touchpoint overall firm perception
23
In a post-COVID-19 world, virtual and interactive client communications
are more relevant
Over the last few years, client reporting in wealth management has evolved beyond meeting standard regulatory
and compliance measures. Firms seek to meet expectations through enhanced engagement while also deploying
innovative means to wow customers through interactive and sophisticated solutions.
Interactive reports: Several firms are working to develop interactive reports that allow clients to view complex
portfolios through a digital reporting platform on multiple devices. Customers can create, manage, and configure
their reports, and all customer activities can be recorded and evaluated by their wealth managers. BNP Paribas
Securities Services provides interactive and dynamic reporting to clients through its data visualization tool DNA.
Clients can access reports on portfolio performance, performance attribution analysis, Environmental, Social and
Corporate Governance Risk Analytics (ESGRA), etc., in the format, frequency, and device they require.32
Gamification and visualization: Gamification-driven simulation of portfolio strategies with real data across
multiple portfolios can help customers visualize various what-if scenarios and provide them better clarity
to understand the impact of each of their investment strategies on their portfolio. HSBC’s Wealth Portfolio
Intelligence Service is a powerful tool, powered by BlackRock’s Aladdin Wealth platform, that delivers enhanced
portfolio analysis, portfolio construction, and risk management capabilities for high-net-worth clients.33
Holistic view through wealth consolidation and insights: WealthTech firms are innovating account
aggregation solutions that give HNWIs a more holistic view of their assets across all their accounts. Credit Suisse
partnered with Canopy to offer a new customer experience. Canopy aggregates the complete customer account
data and allows Credit Suisse clients to share it with their Relationship Manager for more informed investment
advice.34
However, wealth firms are playing catch-up compared with CX from other industries
• Mercedes tossed out the bulky car owner’s manual and launched the Mercedes Me app, which uses AR to
showcase vehicle features without a manual and allows drivers to see data about their vehicle, remote parking
assistance, and more from anywhere in the world.35
• The oldest department store in Paris, Le Bon Marché, is reinventing shopping. They inaugurated the Geek
Mais Chic exhibition. Eighty international brand manufacturers of fashion, beauty, and lifestyle products
incorporated both AR and VR technologies and offered visitors the opportunity of interacting with the brands
from their portfolio in an unprecedented way. In particular, Dior exhibited skin scanners that precisely analyze
each person’s skin to recommend facial care products suited to specific needs.36
• Disney’s Genie app makes holiday planning easier and more fun with customized itineraries geared to customer
interests. Disney property visitors indicate what they want to experience, and the app quickly evaluates millions
of options. Genie also sends real-time tips and updates, including recommendations for experiences the
customer might love, helping them navigate the theme parks with added convenience and comfort.37
With the help of emerging technologies, firms can transform how clients consume investment and fund-related
information by moving away from static offline interaction toward more interactive, multichannel engagement.
32
BNP Paribas, “Investment Analytics,” https://securities.bnpparibas.com/solutions/invest-analytics.html, accessed April 2020.
33
HSBC, “Wealth Portfolio Intelligence Service,” https://www.hsbc.com.hk/wealth-management/wealth-portfolio-intelligence/,
accessed May 2020.
34
Canopy, “Canopy via Credit Suisse,” https://canopy.cloud/creditsuisse.html, accessed May 2020.
35
Mercedes-Benz, “Mercedes Me,” https://www.mercedes-benz.com/en/mercedes-me/, accessed May 2020.
36
LVMH, ““Geek mais chic”, the shopping 3.0 experience at Le Bon Marché,” February 27, 2019, https://www.lvmh.com/news-
documents/news/geek-mais-chic-the-shopping-3-0-experience-at-le-bon-marche/.
37
DisneyParks Blog, “Revolutionary New Digital Offering, ‘Disney Genie,’ Coming to Walt Disney World Resort,” Avery Maehrer,
August 25, 2019, https://disneyparks.disney.go.com/blog/2019/08/revolutionary-new-digital-offering-disney-genie-coming-to-walt-
disney-world-resort/.
24
Technology can enhance client

Client experience is the new
engagement and distribution battleground for wealth managers
channels to boost growth, – yet for many firms, HNW client
revenue opportunities onboarding is a highly arduous,
When it comes to firm operations, specific segments costly process. The primary
of the value chain face high margin pressure while factors are increasing cross-border
in others, new technologies enhance profitability compliance obligations, lack of
potential. Therefore, it makes strategic sense for system integration, and a continued
wealth management firms to assess the areas in which reliance on manual and labor-
margin pressure is squeezing the bottom line hardest intensive processes."
and to urgently review related cost structures.
— Greg Watson
Wealth management firms face margin pressure on a Head of APAC Sales, Fenergo, UK
variety of fronts.
• Regulatory compliance costs from MiFID II, GDPR,

AML, etc., drive spending on data governance and • Requirements to de-link investment research
reporting while encouraging unbundled fees. costs from overall service fees are being by
driven by the EU’s MiFID II, which could lead to firms
• Technology enhancements for competitive absorbing the cost of market research.39
innovation, regulatory compliance,
and cybersecurity. • Zero-fee trading commissions for equities as well
as a growing trend toward lower-margin passive-
• High client acquisition costs – a survey of more investing products could affect margins.
than 800 financial advisors found that the average
cost for a financial advisor to acquire a new client is On the other hand, emerging technologies such as
USD3,119.38 AI, analytics, and automation are enabling firms to
enhance revenues through better client engagement
• Pricey onboarding costs due to increasing and distribution channels and to reduce cost by
compliance requirements and inefficient processes. streamlining processes.
Emerging technologies are especially pivotal to growth
potential in the areas of client acquisition, advisory,
Among the challenges firms and value-added services.
will face are prospecting under
Client acquisition – AI and analytics can be used
GDPR constraints and increased for value-based segmentation and to engage more
administrative workload for personally with clients in alignment with their unique
onboarding to meet compliance investment objectives and behavior. Advanced
requirements." segmentation and targeted marketing can lead to
— Yves Van Laecke more successful lead generation and client acquisition
Director, Private Banking, Bank strategies. Morgan Stanley’s AI-based next-best-action
Nagelmackers, Belgium tool helps wealth managers identify opportunities
to connect with clients and recommend appropriate
solutions.40
38
Kitces.com, “The Most Efficient Financial Advisor Marketing Strategies And The True Cost To Acquire A Client,” Michael
Kitces, February 10, 2020; https://www.kitces.com/blog/client-acquisition-cost-financial-advisor-marketing-efficiency-
lifetime-client-value-lead-generation-satisfaction/.
39
CFA Institute, “MIFID ll: A New Paradigm for Investment Research,” November 20, 2017;
https://www.cfainstitute.org/-/media/documents/support/advocacy/mifid_ii_new-paradigm-for-research-report.ashx.
40
OnWallStreet, “Morgan Stanley plays the long game on AI,” Jessica Mathews, July 12, 2018;
https://onwallstreet.financial-planning.com/news/morgan-stanley-plays-the-long-game-on-ai.
25
Beyond acquisition, predictive analytics can also help
firms identify trends in customer satisfaction levels The biggest opportunity to apply
to predict and prevent customer churn – and bolster artificial intelligence is in client
customer retention.41
acquisition. With AI, advice can be
Client advisory – Analytics and automation can truly personalized and customized
exponentially broaden the range of data sources firms to meet each individual's
can tap into for investment insights. Wealth advisers circumstances."
can leverage technology-based tools to make more
accurate investment analyses and decisions and to — Joe Gribb
provide the best recommendations for clients. For Technology Head of Vanguard Enterprise
example, UBS uses card payment information to gauge Advice, Vanguard, US
the sales of a corporation and the potential impact on
the company’s stock price.42
Value-added services – While this area is still
somewhat nascent, analytics, IoT, and AI have the
potential to help wealth management firms explore
relevant value-added services for clients. Consolidated Wealth management executives believe AI and
client and third-party data can be mined and then advanced data analytics produce high-impact results
used to offer advice on real-estate investment, for both manager and firm capabilities. With their
lifestyle budgeting and spending, and also to provide numerous applications, AI and advanced data analytics
consolidated banking administration services. Through emerge unequivocally as investment priorities. We
open APIs, firms can also deliver innovative value- found it surprising and concerning at the same time,
added services developed by third-party players on however, that firms did not recognize the potential
their platform. of cloud and open APIs, which form the backbone of
new-age business models.
Figure 14. Wealth firms consider AI and data analytics to be most impactful among leading emerging
technologies (%), Mar–Apr 2020
71%
63%
41% 41%
31%
20%
14%
10%
Biometrics Open API Chatbots Machine Intelligent Cloud Advanced Artificial

learning automation data analytics intelligence
Question asked: “From the list of emerging technologies, please select the top-three technologies in terms of their impact on
enhancing wealth managers’ and firms’ capabilities in the near future.”
Source: Capgemini Financial Services Analysis, 2020; World Wealth Report 2020 Executive Interviews.
41
Forbes, “Empowered By Technology, Wealth Managers Will Take Personalization To The Next Level,” June 17, 2019;
https://www.forbes.com/sites/insights-temenos/2019/06/17/empowered-by-technology-wealth-managers-will-take-
personalization-to-the-next-level/#6e36880d38c4.
42
Forrester Research, Inc., “Digital Trends 2019: European Wealth And Investment Management,” April 5, 2019.
26
During the analysis of evolving cost and revenue services again emerged as critical components of
dynamics across the wealth management operating long-term business growth.
model, acquisition, advisory, and value-added
Figure 15. Cost and revenue dynamics are evolving across the wealth management value chain
Developing
Customer Customer and Executing Value-added Regulatory
acquisition managing Reporting
onboarding transactions services compliance
portfolio
AI and
Top-line impact
AI and Analytics on
analytics analytics client data for
increasing enabling new revenue
acquisition enhanced streams from
effectiveness offerings value-added
services
Unbundling of
fees putting Zero-fee
pressure on trading
fee structures
Intelligent
Intelligent automation to Intelligent
Bottom-line impact
automation automate and Automated automation

streamlining reduce reporting streamlining
onboarding transaction compliance
costs
KYC and AML Increasing
Increasing Increasing costs from
requirements
customer costs due to regulations
increasing
acquisition MiFiD II such as MiFiD II
onboarding
costs requirements and GDPR
costs
Increasing margin pressure Critical components of

Technology enhancing profit potential
long-term business growth
27
A smooth transition to Open X banks and digital newcomers are building their entire
models around Open X principles.
is essential as firms prioritize
acquisition, advisory, and • The UK’s digital, mobile-only challenger, Starling
Bank, gained its competitive edge from a checking
value-added services account product built on a platform that also offers
The shift to the impending Open X era will spark customers a variety of offerings from diverse
opportunities for wealth firms to rethink their FinTech players, including WealthTechs WealthSimple
operating models. Open X leapfrogs the compliance- and Wealthify.43 By year-end 2019, Starling Bank
driven open banking environment to prioritize had hit the one-million mark in terms of customer
customer experience to product launch, focus on accounts.44
data more than on their physical assets, embrace
partnerships versus a build/buy mindset, and give • Similarly, the French telecom, Orange, leveraged
precedence to shared access, rather than exclusive an open platform model to launch in 15 months
ownership of property or capabilities. Orange Bank, a fully licensed bank providing a large
set of banking products.45
The broader financial services industry is already
profitably leveraging Open X strategies. Challenger
Figure 16. Entering the era of Open X
Product
Experience
Ownership
OPEN
access
Shared
Assets
Data
Partnership
Build/Buy
Open X: seamless eXchange of data and resources + eXpedited

product innovation = improved customer eXperience
43
Capgemini, World FinTech Report 2019, June 4, 2019; https://fintechworldreport.com/.
44
FinExtra, “Starling Bank hits one million accounts,” November 12, 2019;
https://www.finextra.com/pressarticle/80587/starling-bank-hits-one-million-accounts.
45
Capgemini, World FinTech Report 2020, April 21, 2020; https://fintechworldreport.com/.
28
Within the wealth management industry, Ant • In the critical focus areas of acquisition, advisory,
Financial Services Group partnered with Vanguard and value-added services, firms can invest in
to bring a new streamlined and broadly-available technologies such as AI and analytics to build
investment advisory service to retail consumers in capabilities in-house while also leveraging
China.46 ecosystem collaboration and WealthTech
partnerships to enhance their capabilities.
Goldman Sachs leveraged open ecosystem
collaboration to expand into a new sector and client ––Client acquisition – Fast-growing, Mumbai-
base with an online digital bank. The first consumer based Edelweiss collaborated with Salesforce
banking offering from Goldman Sachs, Marcus, is the to enhance lead generation and problem
result of partnerships with firms such as GE Capital resolution through automation.48
Bank and Clarity Money. Goldman is collaborating with ––Client advisory – AXA Investment Managers
Apple for a Marcus credit card and potentially with partnered with London-based startup Essentia
Amazon to distribute loans. The bank also plans to Analytics to evaluate the historical behavioral
offer zero-fee wealth management services through a data of its fund managers to identify and mitigate
mobile app by the end of 2020.47 habits that might bias investment decisions.49
Wealth management firms can thus adopt Open X ––Value-added services – Morgan Stanley
models to quickly and cost-effectively enhance acquired Solium Capital Inc. to boost its value-
capabilities through a two-pronged strategy: added services offerings, through Solium’s
stock plan administration platform and financial
education, and digital tools.50
Wealth management firms can We are collaborating with

explore WealthTech partnerships FinTechs that provide accelerated
to deliver complementary services programs/products to accelerate
that they do not currently provide our innovation."
themselves. They can also build
— Per-Christian Thorsen
a partner ecosystem to offer
Executive Advisor, Nordea Private
extended services such as banking, Banking, Norway
lending, etc."
— Mindi Marisa
Head of Vanguard Digital Advisor,
Vanguard, US
46
PR Newswire, “Ant Financial and Vanguard Announce Partnership to Bring Inclusive Wealth Management Services to More
Consumers in China,” December 13, 2019; https://www.prnewswire.com/news-releases/ant-financial-and-vanguard-
announce-partnership-to-bring-inclusive-wealth-management-services-to-more-consumers-in-china-300974761.html.
47
The Financial Brand, “Marcus: A Digital Bank That Should Keep Rivals Up At Night,” Jim Marous, February 7, 2020;
https://thefinancialbrand.com/92681/marcus-goldman-sachs-digital-banking-checking-strategy/.
48
Salesforce, https://www.salesforce.com/in/customer-success-stories/edelweiss-global-wealth-management/, accessed April
2020.
49
Capgemini, “Top-10 Trends in Wealth Management: 2019,” December 10, 2018;
https://www.capgemini.com/resources/top-10-trends-in-wealth-management-2019/.
50
PlanAdviser, “Emphasis on Value-Add Services in Morgan Stanley’s Solium Acquisition,” John Manganaro, May 10, 2019;
https://www.planadviser.com/exclusives/emphasis-value-add-services-morgan-stanley-solium-acquisition/.
29
• For areas that did not emerge as a critical focus
(such as compliance and reporting), wealth From an operations perspective,
management firms can consider the direct adoption the added value of WealthTech
of WealthTech solutions. A range of innovative, end-
is in process simplification and
to-end WealthTech solutions are available.
automation of manual tasks,
––Client onboarding – Founded in 2014, Belgium- which results in a better client
based Connective provides digital signatures, experience and productivity
identification, and smart document solutions that improvement. The other area is
can streamline onboarding and enable multi- risk management – for example
channel interactions throughout the process.51
through better management of
––Transaction execution – Belgian B2B startup financial crime risk, reduction of
InvestSuite provides a next-generation, false positives in adverse media
white-label, execution-only platform for easy
searches, etc."
investing.52
––Reporting – French WealthTech One Wealth — Jean Nabaa
Place provides customers access to omnichannel Chief Operating Officer, Retail Banking,
reporting (customer portal, mobile application, Private Banking & Wealth Management,
and email) as well as a consolidated view of their Standard Chartered Bank, Singapore
assets by aggregating external accounts.53
––Regulatory compliance – Swiss RegTech firm
RegData models regulatory requirements Wealth management firms can quickly boost their
(such as GDPR) to provide firms risk analyses. competitive advantages – and profits – during
Transparency, data protection, and compliance uncertain times by adopting the right mix of build,
adequacy are all verifiable and auditable via buy, and partner approaches depending on their core
RegData’s real-time monitoring.54 competencies and business goals.
51
Connective, https://connective.eu/, accessed April 2020.
52
InvestSuite, https: //www.investsuite.com/selfinvestor#, accessed April 2020.
53
One Wealth Place, https://www.onewealthplace.com/produit/airwealth, accessed April 2020.
54
RegData, https://www.regdata.ch/, accessed April 2020.
30
End-to-end API-based omnichannel onboarding solution

helps wealth firm boost time to revenue
Business challenge: Globally, many private banks and wealth management firms struggle to onboard a new
generation of tech-savvy HNW clients while managing multiple regulatory obligations. For example, a North
America-based tier-one wealth firm required about 50 days to onboard each new client.
The friction-filled procedure included labor-intensive manual processes and significant regulatory compliance
workflow gaps that were compounded by legacy technology and siloed client data. In addition to streamlining its
onboarding process, the firm sought to more efficiently handle account reviews and risk assessment for its 1.4
million clients.
Solution: The firm reached out to Fenergo, a digital solutions specialist for client lifecycle management. The
Dublin-based software company provided an end-to-end, API-based, omnichannel onboarding solution powered
by a master data store that linked the wealth firm’s business lines and jurisdictions.
Implementation began by seamlessly integrating the firm’s existing customer relationship management (CRM)
system and client portal with custodians at the back end. With a straight-through processing approach, driven by
Fenergo’s regulatory rules engine (an out-of-the-box repository of configurable rules that can be future-proofed
for evolving regulatory and operational requirements), the solution tightly orchestrated and streamlined the client
onboarding workflow to enable faster time to revenue. Fenergo enhanced the firm’s regulatory workflows to
ensure consistent compliance that verified new clients’ sources of wealth while automating anti-money laundering
(AML) screening for adverse media, politically exposed persons (PEPs), and sanctions.
Benefits: By centralizing client and counterparty data – and integrating with third-party CRM and data providers
– the wealth management firm digitalized its end-to-end client onboarding process and reduced its previous need
for multiple requests for Know Your Customer and AML documentation. Now, firm executives have peace of mind
when it comes to regulatory compliance, their HNW clients are more satisfied, and operational, reputational, and
financial risks have been reduced. The wealth management firm has reported that since the implementation,
client onboarding times have been reduced to less than a month, and abandoned onboarding applications shrank
25%, to boost revenue by approximately USD10 million each year.
Sources: Capgemini Financial Services Analysis, 2020; World Wealth Report 2020 Executive Interviews.
31
Turning challenges into opportunities
Disruption and transformation seem to go part money effectively over the next six to nine months, as
and parcel with the financial industry. And wealth well as a trend to more enthusiastic adoption of digital
management is often considered an economic channels going forward.
trendsetter, considering how closely its revenues link
Therefore, even as wealth executives’ immediate focus
to capital markets. However, the novel coronavirus
may be on business retention, building capabilities
disruption has left few wealth firms without
– both now and in anticipation of recovery – may
challenges. Business, as usual, may no longer be
pave the way to future opportunities and new
pragmatic or even possible.
revenue streams.
Against a backdrop of unprecedented challenges for
Capgemini has touted the merits of Open X since we
individuals and industries, opportunities for firms to
coined the term and defined the impending era in
comprehensively assess and reinvent their business
our World FinTech Report 2019.55 With the present
for viable post-pandemic success and contribution
urgent call to transformation, Open X has never been
are unfolding. As giving back gains significance,
more relevant. Attempting to build all the required
sustainability and ESG investments are on the minds
capabilities entirely on their own will demand plenty
of firms and clients. COVID-19 may profoundly
of capital and time of wealth management firms –
affect consumer behavior – making personalized
both of which are luxuries in the current environment
engagement a requisite norm and opening new
of disruption.
opportunities or challenges to wealth firms now and
into the future. Successful firms will be those that can build synergistic
relationships from within their ecosystem to quickly
The Capgemini Research Institute’s consumer survey
meet high net-worth clients’ demand for easy-
(of more than 11,000 customers across 11 countries
to-access personalized information and tailored
conducted at the peak of the crisis in April) revealed
investment strategies.
a seven percentage point increase in consumers who
want to utilize advisory services to manage their
Given the recent black swan event, To some extent, the current
global stock markets are volatile. situation will lead to a
However, this environment also differentiation between banks
presents a huge opportunity for with very good digital capabilities
firms and advisors to deepen and banks without digital
their client relationships. Firms capabilities. Banks with online/
can get closer to their clients by mobile capabilities will have a
personalizing and digitizing their comparative advantage over banks
offerings. They can seize this whose relationship managers are
moment to expand their value to not reachable because they are
existing and future clients. This is remote without all the facilities.
an opportunity to become more All this will also drive a change of
than just investment advisors." cultural mindset."
— April Rudin — Michiel Van Selm
Founder and CEO, The Rudin Group, US COO, Canopy, Singapore
55
Capgemini, “World FinTech Report 2019,” June 4, 2019; https://www.capgemini.com/us-en/news/world-fintech-report-2019.
32
Partner with Capgemini

Digital wealth advisor platform The offering aims to support corporate clients to solve
business problems through effective collaboration
The wealth management industry is facing disruption with the most prepared startups – we call them
on multiple fronts and the recent global health crisis scaleups.56 The outcome of this engagement is a quick
has only exacerbated the challenges. Margins already and affordable go-to-market plan: six to nine months
stressed by increasing compliance and onboarding (not years) and an affordable opening investment,
costs, as well as fee pressures, are coming under usually limited to an initial set-up cost and then with a
greater pressure in a tough economic climate. The pay-per-use model.
need to connect effectively with clients through new
channels and deliver a personalized experience is also In order to identify the best scaleup to work with (thus
greater than ever. effective collaboration), Capgemini has developed
the Capgemini ScaleUp qualification program, an end-
Capgemini’s digital wealth advisor solutions can help to-end methodology to evaluate scaleup maturity to
banks modernize their platform by building new collaborate with corporates effectively.
APIs to build new distribution channels. We also help
modernize existing platforms by hollowing the core • The methodology evaluates the maturity of the
and gradually implementing new technologies. Our scaleups across the “Four pillars of effective
solution will help to improve operational efficiency in collaboration”: People, Finance, Business, and
a world of low interest rates and higher transparency Technology (this section includes Privacy).
and pressure on fees.
• The 360-degree qualification process takes a month
Our wealth advisor solutions include: and goes through web scraping, scaleup self-
declaration, interviews with Capgemini SMEs, and
• Advisory productivity and collaboration that
client feedback.
integrates and aligns activities and applications
across the advisory lifecycle and makes information • More than 70 scaleups have been qualified from
most useful to a financial advisor readily available across the world and all FS business lines.
and just “one-click” away
• Augmented Advisor Intelligence (AAI)

that enables firms to leverage data and
artificial intelligence to revolutionize Firm-
Advisor-Investor interactions.
Innovation as a service
with scaleups
The Open X framework unlocks a world of new
business models to financial services firms through
effective collaboration with an extensive ecosystem
of businesses (from FS to non-FS firms) enabled by
open and evolutive platforms. Complementing our
open banking offering, we assist clients to build an
ecosystem with FinTechs that connects retail banking
products with wealth management products.
56
A scaleup is a mature startup that has raised more than EUR1 million in funding or is profitable, has a full-time employed top
management team, and has sustainable business traction (>EUR 200K revenue per year).
33
Methodology
Market sizing are theoretically accounted for, but only insofar as
countries can make accurate estimates of relative
The World Wealth Report 2020 covers 71 countries in flows of property and investment in and out of their
the market-sizing model, accounting for more than jurisdictions. We account for undeclared savings in
98% of global gross national income and 99% of world the report.
stock market capitalization.
Given exchange rate fluctuations over recent years,
We estimate the size and growth of wealth in particularly with respect to the US dollar, we assess
various regions using the Capgemini Lorenz curve the impact of currency fluctuations on our results.
methodology, which was originally developed during From our analysis, we conclude that our methodology
consulting engagements in the 1980s. It is updated is robust, and exchange rate fluctuations do not have a
on an annual basis to calculate the value of HNWI significant impact on the findings.
investable wealth at a macro level.
The model is built in two stages: the estimation of 2020 Global High-Net-Worth
total wealth by country, and the distribution of this
wealth across the adult population in that country.
Insights Survey
Total wealth levels by country are estimated using The Capgemini 2020 Global HNW Insights Survey
national account statistics from recognized sources, queried more than 2,500 HNWIs across 21 major
such as the International Monetary Fund and the wealth markets in North America, Latin America,
World Bank, to identify the total amount of national Europe, and the Asia-Pacific region. Respondent
savings in each year. These are added over time to demographics, as broken down by region, age, gender,
arrive at total accumulated country wealth. As this and wealth band, are captured in Figures M1 and M2.
captures financial assets at book value, the final
figures are adjusted, based on world stock indexes The Global HNW Insights Survey was administered
to reflect the market value of the equity portion of in January and February 2020 in collaboration
HNWI wealth. with Scorpio Partnership, a firm with more than
20 years of experience in conducting private client
Wealth distribution by country is based on formulized and professional advisor interviews in the wealth
relationships between wealth and income. management industry.
Data on income distribution is provided by the World The 2020 survey covered key areas around HNWI
Bank, the Economist Intelligence Unit, and countries’ investment behavior, including HNWI trust and
national statistics. We then use the resulting Lorenz confidence, satisfaction, comfort level with fees, and
curves to distribute wealth across the adult population personalized services. The survey measured current
in each country. To arrive at investable wealth as a HNWI investment behavioral patterns of global HNWIs,
proportion of total wealth, we use statistics from including their asset allocation preferences, as well as
countries with available data to calculate their the geographic allocations of their investments. The
investable wealth figures and extrapolate these survey also covered HNWIs’ experience across various
findings to the rest of the world. Each year, we touchpoints in their wealth management journey,
continue to enhance our macroeconomic model interest in value-added services, and views regarding
with an increased analysis of domestic economic sustainable investing.
factors that influence wealth creation. We work
with colleagues around the globe from several To arrive at global and regional values, country- and
firms to best account for the impact of domestic, region-level weightings, based on the respective
fiscal, and monetary policies – over time – on HNWI share of the global HNWI population, were used.
wealth generation. This was done to ensure that the survey results are
representative of the actual HNWI population.
The investable asset figures we publish include the
value of private equity holdings stated at book value,
as well as all forms of publicly quoted equities, bonds,
funds, and cash deposits. They exclude collectibles,
consumables, consumer durables, and real estate
used for primary residences. Offshore investments
34
Figure M1. Global HNW Insights Survey responses, Jan–Feb 2020
Europe (553)
 Belgium  Switzerland
 France  UK
 Germany
 Netherlands
 Spain
North America (575) -

Asia-Pacific (1,304)
Over 2,500
 Canada  Australia
HNWIs in 21 countries
 USA surveyed in Jan-Feb 2020  China
 Hong Kong
 India
 Indonesia
 Japan
Latin America (219)  Malaysia
 Singapore
 Brazil  Taiwan
 Mexico  Thailand
( ) 2020 HNWI responses for the region
Source: Capgemini Global HNW Insights Survey, 2020.
Figure M2. Global HNW Insights Survey demographic breakdown, Jan–Feb 2020
By region By wealth band

Latin
America $1m–$5m
8% Asia-Pacific $30m+ 28%
Europe 49% 38%
21%
$5m–$10m
11%
North America $10m–$30m
22% 23%
By age By gender
60+
17%
Under 40 Female
50–59 44% Male
13% 48%
56%
40–49
22%
Source: Capgemini Global HNW Insights Survey, 2020.
35
Ask the experts
Elias Ghanem Nilesh Vaidya
Global Head of Financial Services Global Head of Banking and
Market Intelligence Capital Markets practice
Elias Ghanem Nilesh Vaidya
Global Head of Financial Services Global Head of Banking and
Market Intelligence Capital Markets practice
Tej Vakta Abhishek Singh

Senior Leader – Wealth Management Lead –
Global Capital Markets Practice Global Capital Markets
[email protected] [email protected]
Chirag Thakral Krithika Venkataraman
Deputy Head of Market Project Manager of World
Intelligence Wealth Report
Elias is responsible for Capgemini’s global Nilesh has been with Capgemini for 20 years
portfolio of financial services thought and is an expert in managing digital journeys
leadership. He has more than 20 years of for clients in the areas of core banking
experience in FS with a focus on effective transformation, payments, and wealth
collaboration between banks and the management. He works with clients to help
startup ecosystem. them launch new banking products and their
underlying technology.
Tej Vakta Abhishek Singh

Senior Leader – Wealth Management Lead –
Global Capital Markets Practice Global Capital Markets
Tej is a capital markets and wealth Abhishek provides wealth management
management domain leader, with over 23 domain leadership for clients and brings
years of banking industry experience and first- Capgemini collaboration with industry-
hand knowledge of financial standards and leading partners, to provide innovative wealth
market trends. He works with financial services management solutions for clients. He has over
institutions to identify innovative solutions to 18 years of FS experience, working primarily in
enhance revenues and improve operations. Wealth Management & Corporate Banking.
Chirag Thakral Krithika Venkataraman

Deputy Head of Market Project Manager of World
Intelligence Wealth Report
Chirag leads the Banking and Capital Markets Krithika leads the wealth management
practice in Market Intelligence. He has more sector in Capgemini Market Intelligence.
than 14 years’ experience as a strategy and With over eight years of digital, consulting,
thought leadership professional with in-depth and strategic analysis experience, her focus
FS expertise and a wealth management focus includes the banking, wealth management,
for almost 10 years. and insurance sectors.
36
Key contacts
Global Netherlands
Nilesh Vaidya Alexander Eerdmans
Stanislas de Roys de Ledignan

[email protected]
Middle East
Bilel Guedhami
Asia (China, Hong Kong, Singapore) [email protected]
Ajay George
[email protected]
Nordics (Finland, Norway, Sweden)
Kimberly Douglas Johan Bergstrom
Australia Spain
Manoj Khera Carmen Castellvi
Susan Beeston
[email protected]
United Kingdom
Colin Barker
[email protected]
Belgium
Alain Swolfs Kristofer le Sage de Fontenay
United States
France Scott Hofmann
Marie-Caroline Baerd [email protected]
[email protected]
Tej Vakta
[email protected]
Germany, Austria, Switzerland
Max Sembach
[email protected]
India
Eric Anklesaria
[email protected]
Kamal Misra
[email protected]
37
Acknowledgments
We want to extend special thanks to all the banks, wealth management firms, FinTech and technology firms, and
individuals who participated in our executive interviews and surveys.
The following firms agreed to be publicly named:

ABN AMRO Private Banking Belgium; Anthos Fund & Asset Management; Azqore; Banca Profilo; Bank
Nagelmackers; Banque de Luxembourg; Barclays Wealth; Belfius Wealth Management; Bessermer Trust; BMO
Nesbitt Burns; BNP Paribas; BNP Paribas Wealth Management Luxembourg; BPER Banca; Brown Shipley; Canopy
(Private Limited); Convergent Wealth Management; Coutts Bank; Delen Private Bank; Euclidea SIM S.p.A; Fenergo;
HSBC PLC; HSBC Wealth and Personal Banking, Hong Kong; IG Wealth Management; ING Belgium Private Banking;
Macquarie Group; Nordea Private Banking Norway; Quilter; RBC; Salesforce; Santander; Scotiabank Limited; St.
James's Place Wealth Management; Standard Chartered; Suntrust Private Wealth Management; The Rudin Group;
United Overseas Bank; Van Lanschot Kempen Wealth Management NV; Vanguard; Weatherby's Private Bank.
We would also like to thank the following teams and individuals for
helping to compile this report:
Elias Ghanem, Chirag Thakral, and Krithika Venkataraman for their overall leadership for this year’s report. Ayush
Poddar, Anand Kumar Singh, Ashutosh Kukreti, Tamara Berry, and Dinesh Dhandapani Dhesigan, for researching,
compiling and drafting the findings, as well as providing in-depth market analysis.
Capgemini’s Global Subject Matter Expert network for providing their insights, industry expertise and overall
guidance: Abhishek Singh, Alain Swolfs, Alessandro Falconi, Ben Weekers, Carlo Dei Cas, Carlotta Borelli, Carmen
Castellvi, Chandramouli Venkatesan, Damien Stulemeijer, Daniele Di Maio, David Brogeras Julian, Dicken Doe,
Ingrid Lehne, Isabelle Andreasson, Jerome Buvat, Johan Bergström, Jon Mulder, Matt Reger, Nilesh Vaidya, Patrick
Vance, Pierre-Olivier Bouée, Robert van der Eijk, Rod Bryson, Sandeep Kurne, Savita Koppikar, Sylvain Desille, and
Tej Vakta.
Ken Kundis, Marion Lecorbeiller, Mary-Ellen Harn, Aparna Tantri, Brent Mauch, Ashley Munoz, Jyoti Goyal,
Martine Maître, Sai Bobba, and Suresh Papishetty for their overall marketing leadership for the report, and the
Creative Services Team for producing the report: Pravin Kimbahune, Suresh Chedarada, Sourav Mookherjee, and
Balaswamy Lingeshwar.
Disclaimer
The information contained herein is general in nature and is not intended, and should not be construed, as professional advice or
opinion provided to the user. This document does not purport to be a complete statement of the approaches or steps, which may
vary according to individual factors and circumstances, necessary for a business to accomplish any particular business goal. This
document is provided for informational purposes only; it is meant solely to provide helpful information to the user. This document
is not a recommendation of any particular approach and should not be relied upon to address or solve any particular matter. The
text of this document was originally written in English. Translation to languages other than English is provided as a convenience to
our users. Capgemini disclaims any responsibility for translation inaccuracies. The information provided herein is on an “as-is” basis.
Capgemini disclaims any and all representations and warranties of any kind concerning any information provided in this report
and will not be liable for any direct, indirect, special, incidental, consequential loss or loss of profits arising in any way from the
information contained herein.
This message contains information that may be privileged or confidential and is the property of the Capgemini Group.
Copyright © 2020 Capgemini. All rights reserved.
38
About Us
Capgemini is a global leader in consulting, digital transformation, technology and engineering services. The Group
is at the forefront of innovation to address the entire breadth of clients’ opportunities in the evolving world
of cloud, digital and platforms. Building on its strong 50-year+ heritage and deep industry-specific expertise,
Capgemini enables organizations to realize their business ambitions through an array of services from strategy to
operations. Capgemini is driven by the conviction that the business value of technology comes from and through
people. Today, it is a multicultural company of 270,000 team members in almost 50 countries. With Altran, the
Group reported 2019 combined revenues of €17billion.
Visit us at www.capgemini.com.
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39
Visit
www.worldwealthreport.com
For more information, please contact:

Capgemini at
[email protected]
For press inquiries, please contact:

Mary Sacchi (North America and the Rest of the World)
WE Communications for Capgemini
Tel.: +1 (212) 551 4818
[email protected]
Bartu Sezer (EMEA)

WE Communications for Capgemini
Tel.: +44 (0)20 7632 3861
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Tel.: +1 704 359 7996
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What are some of the challenges facing wealth managers?

What are some of the challenges facing wealth managers?

What strategies are suggested for wealth managers to address client expectations?

What strategies are suggested for wealth managers to address client expectations?

WORLD

Wealth managers must navigate an uncharted, post-pandemic world

- Amid hyper-connectivity and economic and market ambiguity, unusual financial

Hyper-personalize to meet client expectations and capture future

Safeguard profits with a focus on critical touchpoints and operating

- Wealth management Achilles’ heel: A lack of personalized information and services

Turning challenges to opportunities 32

Partner with Capgemini 33

Ask the experts 36

Within the uncertain COVID-19 environment, hyper-personalized

Wealth management firms can safeguard profits in uncertain times,

Figure 1. Number of HNWIs by region (millions), 2012–2019

CAGR 2012–2018: 7.1% Annual growth 2018–2019: 8.8%

6.2 6.1 6.5

Figure 2. HNWI ﬁnancial wealth by region (USD trillions), 2012–2019

CAGR 2012–2018: 6.7% Annual growth 2018–2019: 8.6%

52.6 1.4 2.4 8.7

18.8 21.6 20.6 22.2

Figure 3. HNWI population by country, 2018–2019

(thousands) 2019 2018

6,000 (61.1% in 2018 and 58.4% in 2012)

Russian Federation 200

Saudi Arabia 191

Hong Kong 153

Source: Capgemini Financial Services Analysis, 2020.

Number of HNWI population HNWI wealth

Ultra-HNWI 183.4 9.1% 8.2%

Mid-Tier Millionaires 1,757.6 8.9% 8.8%

17,666.6 8.8% 8.8%

a. PP in parentheses denotes the change in growth percentage in 2018–2019 over 2017–2018.

Hyper-personalize to meet client

2017 2018 2019

Figure 5. Asset allocation, Q1 2018, Q1 2019, Jan–Feb 2020 (global)

17.6% 17.1% Real Estateb

50% Fixed Income

Fee structure Existing Desired

Based on overall service

and North America had the highest percentage of

services are the way forward

Increased demand for sustainable 1. Real estate investment advice

Millionaires Next Door Ultra-HNWIs

% of custom ers interested in % of custom ers willing to pay for

HNWIs want sustainable investing (SI) options

17% 40% 41% 16%

39% 33% 29% 27% 26%

As HNWIs demand SI products devoted to environmental risks, ﬁrms play catch up

Eﬀectively managing environmental risks 55% 43%

Successful client engagements

Impact of natural events

The great wealth transfer

Figure 9. Wealth management client journey and ﬁrm operating model

Client journey touchpoints

Wealth management ﬁrm operating model

Customer Customer Developing & Executing Value-added

Source: Capgemini Financial Services Analysis, 2020.