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FactSet High Net Worth Investors Study

Sixty-one percent of high net worth individuals under age 35 expect environmental, social and governance (ESG) screens to be used in the investment selection process.  Read more to find out what others say.

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FactSet High Net Worth Investors Study

FactSet High Net Worth Investors Study

Technology has been the driver of the on-demand, transparent experience we know today. The emergence of big data, mobile apps and real-time access has redefined consumer expectations for everything from purchasing products to hailing a taxi. These higher expectations are spreading to the wealth management industry, with high net worth investors (HNWI)—especially the younger ones—expecting their wealth manager to meet the same standards of integrity, transparency, innovation and quality that they see with other product and service providers.

To explore what these rising expectations mean for wealth managers, FactSet, an international financial solutions and analytics provider, conducted a survey of HNWI; from this, FactSet discovered four key takeaways.

Four Expectations Wealth Managers Can’t Ignore

  • The Need for Transparency

While all investors want to work with an honest and responsible wealth manager, self-declarations of integrity are not enough. HNWI believe that transparency is a fundamental trait of an honest and responsible wealth manager. As such, they expect full insight into your firm’s values and activities.

  • More Frequent Portfolio Assessments

The standard for assessing investor portfolios is quarterly reviews. However, for wealthier investors, especially younger ones, assessments need to be more frequent. Risk aversion is the central catalyst for demanding more frequent assessments. Of those surveyed, 30 percent of HNWI under age 35—and 40 percent of HNWI with more than $10 million in investable assets—expect weekly portfolio risk assessments.

  • Responsible Investing is a Core Belief

The overwhelming number of HNWI (82 percent) put a high priority on investing responsibly.  It’s even higher for the wealthiest of the HNWI group (greater than 90 percent). Sixty-one percent of HNWI under age 35 expect environmental, social and governance (ESG) screens to be used in the investment selection process, while 53 percent of HNWI between the ages of 35-54 look to invest using socially responsible filters. This figure falls to 29 percent for HNWI age 55 and older.

  • Innovate or Die

Today’s HNWI believe that wealth managers must constantly innovate and improve services, especially with respect to their investment insights, investment process and online tools.

Reflecting the importance of innovation to them, when asked which company they would prefer to see start a wealth management service, 38 percent of those under age 35 said Google, while just 3 percent said The Wall Street Journal. It wasn’t much different for the age group 35-54, where 27 percent chose Google and 7 percent chose The Wall Street Journal.

The key insights for advisors are that they will need to:

  • create more frequent and interactive dialogue with their clients in response to their desire for greater transparency,
  • evaluate their SRI capabilities to meet the growing demand for responsible investing, and
  • remain committed to advancing the tools and services they offer.

Source:

https://issuu.com/factset/docs/factset_wealth_management_research

See referenced disclosure (2) at http://blog.americanportfolios.com/disclosures/ 

 

 

About The Author

Michael Boccio

 

Business Consultant 
631.439.4600, ext. 294 

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