5 Services Ultra-Wealthy Clients Want

The world's high-net-worth population and their wealth reached new heights in 2023, thanks to a rebound in the global economic outlook, Capgemini Research Institute reported Wednesday. The number of individuals with $1 million or more in investable assets increased by 5.1% to 22.8 million, and their wealth expanded by 4.7% to $86.8 trillion. This upward trend offsets declines in 2022, and puts high-net-worth growth trends back on track, according to Capgemini. In 2023, North America registered the strongest recovery worldwide with year-on-year growth at 7.2% for wealth and 7.1% for population. Wealth and population grew more modestly in the Asia-Pacific region (4.2% and 4.8%) and Europe (3.9% and 4%), in Latin America (2.3% and 2.9%) and the Middle East (2.7% and 2.1%). Only Africa experienced contractions in 2023, with high-net-worth wealth down by 1% and population down by 0.1%. The culprits were falling commodity prices and a drop in foreign investment. According to the report, asset allocations are starting to shift from wealth preservation to growth against the backdrop of thriving high-net-worth expansion. Data from early this year show a normalization of cash holdings to 25% of portfolio totals, compared with multi-decade highs of 34% in January 2023. The report indicates that two-thirds of wealthy individuals plan to invest more in private equity this year as a way to leverage possible future growth opportunities. Capgemini's 2024 report covers 71 countries, accounting for more than 98% of global gross national income and 99% of world stock market capitalization. The firm surveyed 3,119 high-net-worth individuals, including some 1,300 ultra-high-net-worth individuals, across 26 major wealth markets in North America, Latin America, Europe, Middle East and Asia/Pacific. It also polled 75 executives across 12 markets from pure wealth management firms, universal banks, independent broker-dealer firms and family offices and 750 relationship managers across 10 markets.

Need for Value-Added Services

Ultra-rich individuals, those with at least $30 million in investable assets, hold some 34% of total high-net-worth wealth and comprise slightly more than 1% of the high-net-worth population, Capgemini reported. As aging generations transfer an estimated $80 trillion over the next two decades, growing appetite for financial and non-financial value-added services will present a lucrative opportunity for wealth management firms. The report showed that three-quarters of ultra-high-net-worth individuals consider value-added services essential and count on their wealth management firm to support them with their inter-generational wealth transfer needs. Among HNWIs seeking thoughtful guidance, 65% said they were concerned about the lack of personalized advice tailored to their specific — and —evolving financial situation. "There are active steps firms can take to engage and retain clients for a personalized, omnichannel experience as the great wealth transfer unfolds and growth of HNWIs continues," said Nilesh Vaidya, global industry head of retail banking and wealth management at Capgemini, said in a statement. "While the traditional way of profiling clients is ubiquitous, the application of AI-powered behavioral finance tools, using psychographics, should be considered. The creation of channels for real-time communication will be crucial to manage biases that sudden, volatile market movements might trigger." See the gallery for five services ultra-wealthy clients want, and how AI and behavioral finance can help advisors enrich these offerings, according to Capgemini.