GlobalData Plc

The majority of wealth managers around the world agree that intergenerational wealth transfers will be a big source of business for the industry in the near future, according to GlobalData, a leading data and analytics company.

The company’s latest report, ‘2018: Trends to Watch in Global Wealth Management’, identified intergenerational wealth transfer as one of the key issues that is affecting the industry. Targeting individuals who are about to inherit their parents’ assets will prove to be a successful strategy to grow private banks’ assets under management. GlobalData estimates that over the next 10 years, £215bn of millionaires’ investable wealth will be passed on to the next generation in the UK alone.

Bartosz Golba, Head of Wealth Management Content at GlobalData, notes: “This constitutes 20% of UK HNW individuals’ liquid wealth. Different studies estimate that up to 90% of children switch financial advisors after their parents pass away and they take control over family’s assets. They can be a source of new business, but providers also have to focus on retaining assets after inheritance.”

The key to success is understanding the needs of a new generation of clients. There is a common belief that the new wave of investors and millennials above all, require access to digital channels. However, GlobalData’s study found that millennial investors are still frequent users of traditional channels.

Golba comments: “Millennials require access to human financial advisors. In fact, the proportion of investors who contacted their investment management provider face-to-face is higher among millennials than among baby boomers or Generation X. Younger generations require true multi-channel propositions that allows them to talk to their provider when they want, and how they want – be it in branch, over email, by telephone, or on Skype.”

Millennials who are still building up their wealth are open to new solutions, and are more likely to have tried robo-advisors than their parents. However, ultimately they keep the majority of their assets within their main bank.

Golba explains: “This is because millennials are paying off their mortgages, and their first savings land in the accounts they hold with mortgage providers. This puts universal banks in a privileged position to bond with individuals from the very beginning of their financial journey.”

Information based on GlobalData’s report: 2018: Trends to Watch in Global Wealth Management

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