The future is calling - How advisory will define wealth management in Asia - The Future of Asia Wealth Management Series
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The future is calling How advisory will define wealth management in Asia The Future of Asia Wealth Management Series
Contents
Summary 4
Foreword 8
1. Asia presents an enormous wealth opportunity,
but seizing it will be difficult 11
Asia is the key wealth management battleground 11
Why capturing the opportunity will be hard 13
Growing dissatisfaction means money in motion 18
2. Advisory will define the evolution of wealth
management in Asia 21
Clients, firms and relationship managers all agree that advice is important 22
How to build an advisory proposition 23
3. Why firms struggle to deliver next-generation advisory 28
There are gaps between how clients and firms perceive
next-generation advice 31
Early Look Digital assets: Unclaimed territory 33
Early Look Good to grow: The rise of ESG investing in Asia 35
Four keys to next-generation advisory provision 37
The progress so far in Asia 39
Reimagining the client journey 42
4. Rigorous business transformations are needed 45
Remember, most business transformations fail 48
Robust transformation management can enable successful move
to next-generation advisory 50
Early Look Empowering relationship managers: The tools they need to succeed 52
5. Winner takes all 58
Why advice will be crucial to clients in Asia 61
Acknowledgements 64
Appendix 1 – The Advisory Board 66
Appendix 2 – Accenture’s Next-Generation Advisory
Framework: Illustrated Examples 71
2 The future is calling: How advisory will define wealth management in Asia
3 The future is calling: How advisory will define wealth management in Asia
Summary
k Asia is the battleground for
wealth management
Wealth management firms are ramping
up their focus on capturing the wealth
management opportunity in Asia. They
expect assets under management (AUM)
to nearly double from 2021 to 2025 and
revenue to grow about 60 percent,
according to our research.
k Realizing wealth managers’
growth plans will be extremely
challenging...
Achieving those ambitious growth targets
will be difficult, given the need to retain
and acquire clients who are increasingly
looking to switch providers, and the need
to increase massively the hiring of
relationship managers (RMs) at a time
of industry-wide talent shortages.
k ...particularly as markets over
the next three years may be
much less kind
Additionally, the market environment is
likely to be less favorable than it has been
in recent years, given a return of volatility
that was evident even before Russia’s
invasion of Ukraine in February 2022, and
linked particularly to the consequences of
the COVID-19 pandemic as well as rising
inflation and the Federal Reserve’s decision
to hike interest rates. This is putting even
more emphasis on firms to differentiate
their proposition beyond simply
delivering market returns.
Summary continued over.
4 The future is calling: How advisory will define wealth management in Asia
k Against the stereotype, most k Transformation management is key
investors in Asia in fact want advice
Out of those four, transformation
Investors in Asia can no longer be management stands out as a major
categorized primarily as self-directed. impediment. Many firms know “what
Our research shows that today it is the to do” yet struggle over “how to do it”.
advice-seeking persona who prevails For instance, nearly half of firms treat
in the region. Delivering a true advisory transformation as an extension of business-
proposition that is goals-led, integrated as-usual, and less than 20 percent have
across advisory and investment a dedicated transformation function
management, digital-first and evolves running a holistic suite of programs.
the fee model would be crucial for firms One immediate action that firms should
to realize their ambitious growth goals. take is to set up a transformation
management office oriented around
k Wealth management firms structuring, monitoring and steering
are struggling to provide programs, as well as building
and implementing program-and
next-generation advisory
organization-wide communications
There are advisory propositions in the around transformation.
market, but most firms are struggling
to deliver true next-generation advisory. k Winning in advisory means
While some progress is being made in winning overall
taking a portfolio-led approach more
systematically, and in offering clients Delivering a satisfactory proposition
more innovative product suites and to the advisory persona in Asia has a
investment insights, firms are underplaying significant bearing on retaining clients and
the importance of RM selection, being considered their primary wealth
personalization and insight automation. management firm. Assets held with the
primary wealth firm are respectively
k Successful transition to next- more than double and seven times larger
than those held in the secondary and
generation advice needs to
tertiary firms respectively. Satisfying the
overcome four main obstacles
advisory-persona investor also leads to a
There are four major factors holding six-percentage-point improvement in the
firms back from delivering true next- level of AUM they book with the primary
generation advice: internal capabilities firm, which is crucial in a context where
(such as effective segmentation as clients are looking to consolidate providers.
well as quality data and tools), sales
processes and behaviors (such as
moving from sales-based advisory
to advisory-based sales), talent- and
change-resistance, and sub-optimal
transformation-management capabilities.
5 The future is calling: How advisory will define wealth management in Asia
About the research
This report is based on original research conducted
by Accenture, as well as the authors’ expertise
in relevant areas. The research included:
Accenture’s Asia Affluent Investor Survey, Q1 2022
A survey of more than 3,200 clients across eight Asian markets:
China (mainland), China (Hong Kong SAR), India, Indonesia, Japan,
Malaysia, Singapore and Thailand. Some 40 percent of respondents
were affluent (with investable assets of US$100k-1m)1 while 60 percent
fell within the high-net-worth (HNW) or ultra-HNW stratum (with
household assets above US$1m). The survey was conducted
in December 2021 and January 2022.
Accenture’s Asia Relationship Manager Survey, Q1 2022
A survey of 550 relationship managers at private banks, wealth firms,
retail banks and independent financial advisors across the same eight
markets. The survey was conducted in December 2021 and January 2022.
Accenture’s Asia CXO Industry Benchmark Survey, Q1 2022
Accenture conducted 21 interviews with senior executives (CXOs)
of wealth firms operating across Asia. Most interviewees were the
operating head of the wealth business for a region or market,
or the head of a key business line such as strategy or operations.
A list of participating firms can be found in the Acknowledgements
section of the report.
Accenture worked with Phronesis Partners to conduct the Asia
Affluent Investor Survey and the Asia Relationship Manager Survey.
Use of Flags
Flags are used to represent the countries included in this report.
Below is a simple reference key for each country and their corresponding flag.
China
Singapore China (mainland) Indonesia
(Hong Kong SAR)
India Thailand Malaysia Japan
6 The future is calling: How advisory will define wealth management in Asia
Accenture wealth management Asia research advisory board2
Marc Van de Walle, CFA Evonne Tan
Global Head, Head of Barclays Private Bank,
Wealth Management Singapore
Sacha Walker Alvin Lee
Head of Strategy and Head Group Wealth Management
Business Operations, APAC
Clark Wu Arnaud Tellier
Member of the CICC Chief Executive Officer,
Management Committee Asia Pacific
President of CICC
Wealth Management
Heline Lam Alain Bernasconi
Chief of Staff Asia Chief Operating Officer
Member of Asia Management of Private Banking Asia Pacific
Committee Head of Private Banking,
Singapore Location
Wei Mei Tan, CFA, CA, CAIA Gary Harvey
Managing Director Chief Executive Officer,
Global and Asia Head of Advisory Singapore
Global Private Banking and Wealth
Flags denote the base location of each member.
7 The future is calling: How advisory will define wealth management in Asia
Foreword
Asia will play a key role in the global future of wealth
management. The world’s most populous continent and
the source of much of its economic dynamism, Asia’s
affluent and high-net-worth population is growing so fast
that financial institutions are struggling to keep pace.
How to respond remains a source of debate, What has driven this shift to advice-seeking?
with asset and wealth managers pondering Markets have become volatile, and missteps
the extent to which they need to transform can be painful. Younger, digital-native investors
their businesses in order to defend and need to plan for longer life expectancies and
grow their market share in Asia. an extended investment horizon, and they
recognize that this requires careful strategy
One response is to say that wholesale rather than a trading mindset. Moreover, these
transformation is unnecessary, because Asia’s digital natives face information overload,
investors are interested mainly in execution which can lead to investment paralysis or
and have little interest in financial advice or poor decision-making, particularly in markets
strategy, and certainly no appetite to pay for that often seem to behave illogically. They are
such services, and that this mindset defines actively seeking guidance to avoid making
their relationships with their providers. serious financial mistakes.
Our research, however, shows that this
assumption is no longer accurate. Catering to this need is therefore pivotal for
the industry in Asia. Many of the region’s
Having surveyed over 3,200 investors affluent investors are multi-banked, but
across eight Asian markets (as well as 550 many also tell us they intend to consolidate
RMs and nearly two-dozen CXOs of wealth their investments with a smaller number
management firms), we find that today the of providers or even at a single institution.
biggest segment (40 percent) of clients Clearly, the gains could be significant for
in Asia are those who wish to validate those banks that can best optimize their client
opportunities with their RM, even if they take offering and become the recipients of this
the final decision for themselves—a grouping consolidation. For this, though, they need to
we refer to as the “advisory” persona. Just cater to the key advisory group of customers.
one-third (33 percent) of respondents fit the
stereotype of the “execution/self-directed”
client who prefers to act autonomously.
8 The future is calling: How advisory will define wealth management in Asia
The wealth managers who succeed will be Business transformations often fail. Those firms
those that build next-generation advisory that take transformation seriously could benefit
into their proposition. These transformations significantly—our survey indicates that Asia’s
will empower human RMs with the best advisory persona customers reward firms that
technology and channels, allowing them meet their expectations with additional AUM.
to reach many more clients and gear their These are likely to be the same firms that
service to the expectations of Asia’s rapidly attract and retain the best RMs, equip them
growing affluent class. with the tools they need and end up meeting—
or exceeding—the wealth management
Enabling RMs to transmit relevant, personalized industry’s expectations for the region.
advice and insights to customers across
a range of wealth segments and interests In preparing this report, Accenture sought
is a technological challenge that can be advice and input from an advisory board
overcome. But firms are being held back by of industry leaders from across Asia.
a resistance to change, the limited availability While Accenture is solely responsible for
of the right talent, and improvised methods all analysis and commentary, the advisory
of transformation management. board’s guidance was tremendously valuable,
and I would like to take this opportunity to
thank them for their insights and wisdom.
Matthew Long
Senior Managing Director and
Capital Markets Lead
Accenture
9 The future is calling: How advisory will define wealth management in Asia
10 The future is calling: How advisory will define wealth management in Asia
1
Asia presents an enormous
wealth opportunity, but
seizing it will be difficult
Asia is the key wealth
management battleground
The expansion of wealth management of non-resident Indian customers around the
in Asia is being driven by powerful world, assisting HSBC’s goal of becoming
factors. The Asia-Pacific region (APAC) is Asia’s leading wealth manager by 2025.6
already the largest wealth region globally,
with the wealthy comprising a growing Southeast Asia is becoming a hub of digital
percentage of the overall population.3 wealth management. StashAway, a Singapore-
It is also a highly dynamic economy in which based wealth platform, is growing rapidly
innovation is increasingly widespread. across the sub-region. Launched in 2017,
it already has more than US$1 billion under
Within the APAC region, China has extended management,7 expanding into Malaysia in
and expanded a pilot scheme allowing 20188 and Thailand in 2021.9 Hot on its heels
foreign asset managers to launch pension are a welter of new Singapore- and Indonesia-
wealth management products via joint based digital investment platforms and start-
ventures with Chinese institutions.4 HSBC, ups, while online players such as Grab have
for example, has been investing heavily in launched investment services to complement
its mainland China wealth operations as part their existing businesses.10
of the bank’s broader pivot towards Asia.5
The wealth management market in Asia,
China’s economic growth rates are now then, has become a valuable prize. In their
being matched by Asia’s other giant, India, efforts to engage affluent investors in Asia,
another country where a huge middle class banks are adopting three main strategies:
is emerging. HSBC announced in December
2021 its US$425 million acquisition of L&T • Re-entry
Investment Management, with the bank
• Consolidation
seeing the deal as a way of serving the wealth
needs of customers not only in India but also • Doubling-down
11 The future is calling: How advisory will define wealth management in AsiaBarclays Private Bank is an example of re-entry. The third category—banks doubling down
The UK-headquartered bank is rebuilding on their existing approach—includes regional
its private banking business in APAC from banks like Singapore’s DBS and UOB, which
which the bank had retreated as part of are building on their home region branding
a 2016 restructuring, including in China, and presence to penetrate more deeply
India, Singapore and Australia.11 As early as into their wealth markets. UOB bought
2017 the bank was signaling its intention to Citi’s Southeast Asian consumer business
re-enter, although a non-compete clause in January 2022,15 while DBS acquired
with Singapore’s OCBC, to which it had sold Citi’s Taiwan retail unit in the same month.16
its Asia business, delayed its return until Such inorganic growth, coupled with the
January 2019.12 From its base in Singapore, organic growth of the regional banks’
Barclays is likely to leverage the leading own customer bases, gives them a strong
corporate and institutional bank it retained presence at the source of the wealth
while exiting the private banking business. lifecycle continuum, and the potential
for deeper long-term penetration.
For its part, Citi is an example of
consolidation. It has decided to consolidate “Asia has long been an attractive region for
its operations to create a unified wealth firms targeting wealth management, though
organization. To that end, it is exiting its international firms often struggled to profitably
retail banking operations in 13 markets while manage their business in a very competitive
combining two of its wealth management region—which led to market exits,” says Paul
businesses into a new venture called Citi Ng, Managing Director, Southeast Asia Financial
Global Wealth, which serves the entire Services Client Group Lead, Accenture.
spectrum of wealth segments, from affluent “We are now seeing regionally based banks
to ultra-HNW, via four wealth centers.13 double-down, building on their strong universal
Two of these (Hong Kong SAR and Singapore) bank franchises, and international firms taking
are in Asia, reflecting the region’s importance a far more focused approach.”
to Citi’s wealth practice. In the first half of
2021, Citi Global Wealth attracted almost
US$15 billion in net new money in APAC.14
“Asia has long been an attractive region for firms targeting
wealth management, though international firms often
struggled to profitably manage their business in a very
competitive region—which led to market exits. We
are now seeing regionally based banks double-down,
building on their strong universal bank franchises, and
international firms taking a far more focused approach.”
Paul Ng
Managing Director, Southeast Asia Financial Services
Client Group Lead, Accenture
12 The future is calling: How advisory will define wealth management in AsiaWhy capturing the opportunity will be hard
As these banks re-enter, consolidate Our industry benchmark research in Q1 2022
or double-down on Asia, they face shows they want to nearly double AUM in the
fierce competition for talent. 2021-25 period, while they expect revenues
to increase by almost 60 percent.
For example, in May 2021, Citigroup
announced that over the previous 12 months To give an idea of the challenge firms are
it had hired almost 650 wealth professionals setting themselves, this would require a
in APAC, including more than 130 private CAGR of 14 percent and 12 percent respectively
bankers and relationship managers.17 (see Figure 1). How will they get there?
This announcement followed the news that
the bank had established Citi Global Wealth. Asia’s leading wealth
management firms want assets
This activity is indicative of the excitement
under management to nearly
around Asia and its wealth and has led
double in the 2021-25 period,
players in the industry to set some
extremely ambitious growth targets. while they expect revenues to
increase by almost 60 percent.
Figure 1: Industry ambition—Where growth goals meet efficiency constraints
Growth Goals Efficiency Constraints
AUM Revenue Cost/income Return on Revenue per
(%) assets (%) RM (US$M)
~1.7x 1.6x 63 61
1.4
1.3 1.0
1.2
‘21-’25F ‘21-’25F
‘21 ‘25F ‘21 ‘25F ‘21 ‘25F
14% CAGR 12%CAGR Slight improvement Generally stable 4% CAGR
across all firms.
1.4x-2.0x range 1.4x-1.7x range More improvement -10 to 9%
Some down due to
in universal banks CAGR range
focus on asset
than private banks across firms
growth beyond
revenue growth
Source: Accenture’s Asia CXO Industry Benchmark Survey, Q1 2022
13 The future is calling: How advisory will define wealth management in AsiaCapturing this growth would mean There are simply nowhere near
bringing net new money into the industry enough skilled RMs to meet the
and doing so in large quantities. Much of
demand foreseen in the medium-
Asia’s wealth is held in property, businesses,
term. Our analysis of just three
retail deposit accounts and physical cash—
not as AUM with wealth management firms banks’ growth aspirations suggests
(see Figure 2). Converting liquid potential they would need thousands more
AUM into actual AUM, while protecting existing RMs to reach their targets.
AUM by deepening client engagement and
devising strategies to attract illiquid wealth, are
issues that the industry is very familiar with.
Figure 2: Most wealth is held outside Asia’s wealth management firms
Existing AUM Potential AUM Illiquid
Held with wealth firms Held in retail deposit Held in real estate
accounts and physical cash and businesses
Investor wealth bands Average 46% Average 32% Average 22%
US$100K–$500K 38% 43% 19%
US$500K–$1M 41% 38% 21%
US$1M–$5M 51% 27% 22%
US$5M–$10M 52% 24% 24%
US$10M+ 47% 24% 29%
Strategic plays Protect and retain Attract and convert Integrate into advisory
Deepen engagement Core opportunity Watch for liquidity events
Source: Accenture’s Asia Affluent Investor Survey, Q1 2022
Questions asked: Of your total investable assets what proportion of that is held at or managed
by wealth management firm(s)?
Of the remaining investable wealth which is not currently held or managed by wealth
management firms, how does this breakdown across the following entities and accounts?
(Figures may not sum due to rounding.)
14 The future is calling: How advisory will define wealth management in AsiaWhile this may seem like a gold-rush Consequently, poaching RMs from
opportunity for wealth managers, there are competitors is likely to intensify. As our Early
several reasons why the task they face in Look sidebar on RM empowerment explains
Asia is actually very difficult. below (see page 52), wealth managers will
at a minimum need to attract talent while
First, Accenture research indicates that minimizing attrition among their existing staff.
wealth managers are currently focused on Remuneration will also need to be monitored
the top line rather than on the efficiency carefully to make sure it is competitive.
and performance both of the firm and of
its RMs. While they expect AUM to nearly Indeed, our research shows that
double between 2021 and 2025, they expect maximizing revenue per RM is probably
only a modest increase in revenue per RM the most realistic way that firms would
over the same period, from US$1.0 million grow in line with expanding their client
to nearly US$1.2 million. In other words, base. This would require giving RMs a full
efficiency and performance gains would range of communication channels and
not get firms to their goals. smart advisory support, and ensuring
that the firm’s mobile, online and email
Second, there are simply nowhere near capability is responsive, well-optimized
enough skilled RMs to meet the demand and data-rich—with digital channels
foreseen in the medium-term. Our analysis of particularly important for younger
just three banks’ growth aspirations, deriving respondents to our affluent investor survey.
client and RM acquisition targets from publicly
stated AUM growth goals, suggests they “We often see firms focus strongly on
would need thousands more RMs to reach attracting and engaging clients, which they
their targets. Extrapolated across the industry should. However, this is often to the detriment
as a whole, the numbers required far outstrip of an important element: the level of RM
the availability of high-quality RMs. empowerment,” says David Wilson, Principal
Director, Growth Markets Wealth Management
Lead, Accenture..
“We often see firms focus strongly on attracting and
engaging clients, which they should. However, this
is often to the detriment of an important element:
the level of RM empowerment.”
David Wilson
Principal Director, Growth Markets
Wealth Management Lead, Accenture
15 The future is calling: How advisory will define wealth management in AsiaThis kind of technological empowerment As if these steps were not enough, the
is even more necessary in niches such market context will make this task even more
as environmental, social and governance challenging. Market returns over the past
(ESG) investing and digital assets—two three years have been exceptionally strong
areas to which investors want greater (see Figure 3); the overwhelming majority
exposure, and which are also examined of respondents to our survey say their
in detail in their own Early Look sidebars investment expectations have either
below (see page 33 and page 35). been met or exceeded over the past
12 months. This proportion was highest
in India and Indonesia, with 95 percent
giving these responses.
Figure 3: A less-favorable market environment ahead
Market returns have been 2022 will be challenging given
incredible the last three years volatility and investing landscape
S&P 500 annual returns VIX (as of 9 May 22)
29% 40
Huge uptick in volatility
27% since Nov-22 while YTD
S&P500 down 17%
35
16%
30
10-year average 15%
25
0
20
-6%
15
2018 2019 2020 2021 Jun-21 Jan-22
Sources: Accenture Analysis, 2022. S&P 500 returns and CBOE Market Volatility Index data from Refinitiv
16 The future is calling: How advisory will define wealth management in Asia17 The future is calling: How advisory will define wealth management in Asia
Growing dissatisfaction means
money in motion
Yet despite this strong performance, The biggest mismatch is in Hong Kong SAR,
satisfaction in Asia with wealth where an overwhelming 89 percent of
management firms is nowhere respondents said their returns had met or
exceeded expectations, but only 31 percent
near as evident. Fewer than half
expressed themselves satisfied with their
of respondents say they are either wealth manager.
satisfied or extremely satisfied
with their wealth manager, with Fewer than half of respondents
India the only market to buck say they are either satisfied
this trend (see Figure 4). or extremely satisfied with
their wealth manager.
Figure 4: Happy with returns, far less so with their wealth managers
Clients’ investment expectations Yet overall satisfaction with
were met or exceeded wealth firms is lukewarm
32% 62% 95% 38% 14% 52%
15% 80% 95% 33% 43% 76%
22% 72% 94% 37% 11% 48%
24% 69% 93% 24% 29% 53%
36% 55% 91% 28% 16% 44%
43% 46% 89% 25% 6% 31%
39% 50% 89% 27% 16% 43%
42% 38% 79% 19% 11% 31%
Overall 32% 60% 91% Overall 30% 17% 46%
At par with my expectation Satisfied
Better than expectation Extremely satisfied
Source: Accenture’s Asia Affluent Investor Survey, Q1 2022
Questions asked: How satisfied are you with your primary wealth management firm?
How did your investments perform at your primary wealth management firm over the past 12 months?
(Figures may not sum due to rounding.)
18 The future is calling: How advisory will define wealth management in AsiaWhat makes this mismatch between As if this were not daunting enough, Asia’s
expectation and satisfaction of particular established asset and wealth managers need
concern to Asia’s wealth managers is not to reckon with the arrival of non-traditional
only the prospect of their RMs being spread competitors that have been born into the
more thinly between customers due to rapid online world. Asia fintechs and virtual banks
market growth—a possible source of further such as Grab Financial and StashAway have
frustration among the client-base—but their own ambitions in the wealth space,
also that the world is entering a period of which pose a challenge to the growth
heightened market volatility. Returns on the ambitions of traditional asset and wealth
S&P500, for instance, have declined since managers—especially among the younger,
2021, while the VIX index, which measures affluent generation that will probably be the
volatility, was tracking upwards even before primary target over the next few years. In this
Russia invaded Ukraine in late February 2022. fast-changing space, it has become more
important than ever for firms to understand
If meeting client expectations was difficult the shifts underway among affluent investors.
in a bull market, it will be even harder now.
Money is likely to start moving between
Greater proportions of younger
institutions as dissatisfied customers in Asia
seek out wealth managers that they feel are
and wealthier clients than other
more responsive and engaged. Relatively groups say they are likely to leave
few clients left their wealth managers in their wealth manager, a finding
2021, ranging between seven percent and supported by their behavior in 2021.
14 percent across the markets we surveyed.
But our research suggests a much higher
rate of attrition in 2022 and beyond among
affluent clients in Asia, as Figure 5 indicates. Figure 5: Money on the move
This finding is consistent across the Asian
Affluent clients in Asia did not leave
markets surveyed. However, the findings
firms in 2021, but expect to in 2022
differ by age group and net wealth. Greater
proportions of younger and wealthier 41%
clients than other groups say they are likely 11%
to leave their wealth manager, a finding
supported by their behavior in 2021. Ten
percent of clients in the 18-50 age range
left their wealth manager over the course 30%
of the year, against just 4 percent among
the over-50s. Wealthier clients are also 10%
more mobile. Among clients with more than
Left in ’21 Leave in ’22
US$10 million in assets, 19 percent left their
providers in 2021 versus between 6-8 percent Maybe Yes
of those with assets below US$1 million.
Source: Accenture’s Asia Affluent Investor Survey, Q1 2022
Questions asked: Please indicate if you left your primary
wealth management firm or RM in the past 12 months.
Are you likely to reduce the number of wealth management
firms that you currently work with, and consolidate your
assets with a single or fewer firms over the next 12 months?
19 The future is calling: How advisory will define wealth management in Asia20 The future is calling: How advisory will define wealth management in Asia
2
Advisory will define
the evolution of wealth
management in Asia
For years, the idea prevailed that Asia’s investors were more
autonomous than those elsewhere, requiring only trade execution
in terms of support, and averse to paying for advice.18,19,20
Whether this stereotype was ever true is What has inspired this shift away from self-
debatable, but our research shows it no directed trading in Asia? Several factors are
longer applies. Self-directed clients are likely at play. One is rising life expectancy in
outnumbered by those who seek advice a region which still has only patchy provision
and validation for their decisions— of state pensions and healthcare. Younger
although there are significant variations investors in particular realize they need to plan
between national markets, as Figure 6 for lengthy retirements, and that this requires
illustrates. Overall, only one-third fit the long-term, strategic thinking and advice
description of self-directed autonomy. rather than a short-term trading mindset.
Figure 6: The advisory persona takes pole position
55%
45%
44%
41%
40%
35%
33%
33%
28% 16%
11%
22%
Validator/Advisory Execution/Self-directed Delegator Unsure
Source: Accenture’s Asia Affluent Investor Survey, Q1 2022
Question asked: “Which of these statements best describes your approach to managing your wealth?
Validator/Advisory represents: “I want to understand investment opportunities and trade-offs to validate with
my RM, but I make the decision on whether to invest.” Execution/Self-directed represents: “I seek out opportunities
in the market and pursue them autonomously.” Delegator represents: “I let the bank manage my portfolio and
just need to have transparency on my performance.” Unsure represents: “I am not fully comfortable investing
and managing wealth, and do not yet know the best approach for me to take.”
21 The future is calling: How advisory will define wealth management in AsiaAnother factor is “VUCA”: volatility, Such advice is particularly valuable given
uncertainty, complexity and ambiguity. the burden of sifting through an overload of
The idea of a stable macro-economic online information, much of it of questionable
context has been shattered by years of quality. This is especially true when it comes
shocks, mostly recently the COVID-19 to trying to forecast the future behavior of
pandemic and the return of conventional markets which fluctuate in ways that do
warfare to the continent of Europe. not always seem logical.
Investors in Asia who may once have felt
confident in their understanding of the market
Whether the stereotype
context have come to appreciate the research, of Asia’s autonomous investor
experience and psychological support that was ever true is debatable,
investment professionals can offer. but our research shows
that it no longer applies.
Clients, firms and relationship managers
all agree that advice is important
Our surveys found consensus This deeper level of engagement is likewise
when it comes to the centrality of beneficial to RMs, as are the efficiency
advice to the wealth management gains and streamlined access to information
that an advisory relationship yields.
proposition. More than three-
quarters of clients, RMs and
As for their employers, wealth management
firms said advice was a vital part firms value advisory because the deeper
of the target proposition. In the level of engagement it creates improves
case of RMs, 85 percent said client loyalty and stickiness, and thus
this was the case. improves earnings stability. Moreover, the
advisory aspect of the proposition can
For customers, the advisory plank of the allow firms to differentiate themselves,
wealth offering empowers them with greater which is advantageous for pricing—
control over their investments, allowing notably in avoiding a race to the bottom
them to understand their exposures and on trade execution commissions.
the rationale behind them. This in turn
leads to a deeper, more personalized level
Wealth management firms value
of engagement between the advisor and
customer, cementing the relationship.
advisory because the deeper level
of engagement it creates improves
client loyalty and stickiness, and
thus improves earnings stability.
22 The future is calling: How advisory will define wealth management in AsiaHow to build an advisory proposition
There are four building blocks when it comes to building
an advisory proposition:
1 2 3 4
Client investment The proposition Channel
Fees
goals itself demands
Source: Accenture Analysis, 2022
1. Client investment goals: Figure 7: Investment goals of affluent
The first, essential step is to investors in Asia
understand what Asia’s affluent
clients are looking for. Their 1. Growing wealth in general
goals are not exotic—they want to grow their
wealth, protect their wealth and retire well. 2. Ensuring a comfortable retirement
Asked in our survey to list the specific goals
3. Wealth and asset protection
to which their investment strategy is directed,
the top three answers are growing wealth in 4. Enabling lifestyle purchases
general, ensuring a comfortable retirement
and protecting their assets (Figure 7). 5. Paying for healthcare
6. Wealth transfer
These answers are generally consistent across
age groups, nationalities and wealth levels. 7. Starting/expanding a business
Older and less-wealthy respondents place
somewhat more emphasis on retirement- 8. Buying a house or apartment
planning, while, in a slight departure from
the pack, Indonesian and Thai clients place 9. Paying for education
building a business in their top-three priorities.
10. Relocating to a new city or country
The goals of Asia’s affluent clients
Source: Accenture’s Asia Affluent Investor Survey, Q1 2022
are not exotic—they want to Question asked: What specific goals do you have
grow their wealth, protect their to which your investment strategy is linked?
wealth and retire well.
23 The future is calling: How advisory will define wealth management in Asia2. The proposition: When it to access a range of investment products
comes to what Asia’s affluent and solutions that also fall within an advisory
investors want from an asset or wrapper (see Figure 8). The greatest demand
wealth manager, the findings for advisory services among the markets
are again consistent across markets, surveyed is found in China, Singapore and
age ranges and wealth levels. Access to Thailand, where more than 80 percent of
financial planning and advice comes near respondents consider them important.
the top of their priorities, outranked only
by predictable requirements such as the
safekeeping of their assets and the ability
Figure 8: What clients in Asia value from a wealth management proposition
Access to investment products and solutions 23% 57% 79%
Custody/safekeeping of assets 20% 57% 77%
Access to advice on investments and
18% 59% 77%
financial planning (inc. retirement)
Access to market data and research 15% 62% 77%
Access to advice on other specialised topics (e.g.,
13% 60% 73%
business, tax, legal, estate planning, philanthropy)
Lending and credit solutions 10% 56% 67%
Most important Also important
Source: Accenture’s Asia Affluent Investor Survey, Q1 2022
Question asked: Which of the following elements of the overall wealth management proposition are
important to you when you choose to begin a relationship with your wealth management provider?
(Figures may not sum due to rounding.)
24 The future is calling: How advisory will define wealth management in Asia3. Channels: As of 2022, Despite this increasingly digital-first
the most important channel requirement, however, touchpoints with
for clients is a mobile app: human RMs remain important. This is
64 percent say that this is particularly the case in Thailand, Japan
either important or extremely important and China, including Hong Kong SAR.
(see Figure 9). Again, this finding is broadly
consistent across age, wealth ranges and
geography, although younger respondents Despite this increasingly
place even more emphasis on apps, along digital-first requirement,
with third-party messaging.
touchpoints with human
RMs remain important.
Figure 9: Clients in Asia prioritize digital communication
Mobile application 29% 35% 64%
Online banking portal (non-app, secured with log-in) 28% 34% 63%
Email 27% 33% 60%
Telephone with RM/advisors 24% 33% 57%
Meet RM/advisors in branch/office 23% 33% 57%
Third-party messaging (e.g., WhatsApp or others) 22% 33% 55%
Telephone with call center 21% 33% 54%
Public website (non-app, pre-log in) 21% 32% 53%
Chat/Video tools (e.g., Zoom, Teams) 21% 31% 52%
SMS 17% 33% 50%
Social media (e.g., LinkedIn) 20% 29% 49%
Home visit by RM/advisors 18% 29% 48%
Fax 15% 24% 39%
Extremely important Important
Source: Accenture’s Asia Affluent Investor Survey, Q1 2022
Question asked: Which of the following physical and digital channels currently provided
by wealth management firms are important for you?
(Figures may not sum due to rounding.)
25 The future is calling: How advisory will define wealth management in Asia4. Fees: Our research indicates Fee transparency and fee
that fee transparency and fee models are going to need to
models are going to need to evolve to serve investors in
evolve to serve investors in Asia—
Asia—who are evidently
not least because wealth clients believe fee
structures are opaque. Asked whether they
prepared to pay for advice,
know the total amount of fees they are as long as it is on their terms.
being charged on an annual basis, almost
one-quarter say they do not. This is particularly As we shall see, however, few if any wealth
the case among older respondents, with management firms in Asia have completed
39 percent in the 50+ age bracket answering their journey when it comes to this fee-driven
negatively. By contrast, 93 percent of advisory relationship. They are encountering
RMs believe their clients are aware of a variety of hurdles, not least those stemming
the annual fees being paid. from the disruptive nature of business
transformation itself. Below, we analyze
Clients in Asia are evidently prepared to these obstacles and explore how the region’s
pay for advice, as long as it is on their terms. wealth managers can overcome them.
Our survey suggests that clients would
prefer a fee system that is linked to what And, as they navigate this journey, it is worth
they get—in other words, investment understanding how matters have played
performance—and what they use, in terms out elsewhere—not least in North America,
of the number of transactions, as illustrated says Scott Reddel, Managing Director, North
in Figure 10. This preference is most evident America Wealth Management Lead, Accenture.
in Japan, China and Singapore, where
performance fee models are preferred by more “Asia can learn a lot from North America,
than 30 percent of investors. However, it is which evolved from a high-growth and young
likely that for fee models to change sustainably, society with an investing focus geared towards
regulations would need to play a part. equity transactions, and which is now evolving
towards goals-based advisory as investors
seek more certainty on retirement outcomes,”
Reddel says. “Key areas to get right from the
US experience will be the creation of a more
personalized, digitally enabled experience.”
“Asia can learn a lot from North America, which evolved
from a high-growth and young society with an investing
focus geared towards equity transactions, and which is
now evolving towards goals-based advisory as investors
seek more certainty on retirement outcomes. Key areas
to get right from the US experience will be the creation
of a more personalized, digitally enabled experience.”
Scott Reddel
Managing Director, North America
Wealth Management Lead, Accenture
26 The future is calling: How advisory will define wealth management in AsiaFigure 10: What clients would prefer to pay for
100% 100%
Combination of below 6% -1pp 5%
Time-based 7% 0pp 7%
17%
-7pp
Asset-based 24%
20%
+5pp
Fixed fee 15%
22%
0pp
Transaction-based 22%
+4pp 29%
Performance-based 24%
Actual Client expectations
Source: Accenture’s Asia Relationship Manager Survey, Q1 2022 and Accenture Asia Affluent Investor Survey, Q1 ’22
Questions asked: What is the primary way that your client base pays for wealth-related services?
In an ideal world, how would you like to pay your relationship manager for wealth-related services?
(Figures may not sum due to rounding.)
27 The future is calling: How advisory will define wealth management in Asia3
Why firms struggle
to deliver next-
generation advisory
Many wealth management firms in Asia are on an advisory
journey, but industry-wide the penetration of advisory
mandates remains relatively low, with very few firms offering
such services (and these mostly being in the higher-wealth
private banking arena). Where these are offered, they attract
an average of only 5-10 percent of client assets.
One of the more successful examples is a Approaches like this are perhaps less of
leading European private bank that has long an option for universal banks in Asia, which
been on the advisory journey. When it comes serve a diverse range of clientele—including
to next-generation advisory, it plans to shift sizeable client bases in the segments below
to hyper-personalization via a hybrid model US$5m in investable assets—and need to
that couples human RMs with increasingly embed digitalization more deeply to offer
advanced iterations of the bank’s modular advisory at scale. They should consider
and customizable portfolio creation system. other approaches. One large regional bank,
Ultimately it envisages a “Netflix”-style system for example, breaks the investment universe
that pushes and pulls information relevant into clusters such as cash, equities and
to investors’ day-to-day interests. alternatives, and then maps these to
clients’ risk appetites and time horizons.
Other institutions, such as a boutique private This generates a model portfolio for the
bank, see prioritizing the human touch and RM to take to the client. Another uses
offering deep investment solutions as their portfolio advisory tools that assess the
key differentiator—for instance, by offering risk/return efficiency frontier and make
different tiers of RM and investment advisor recommendations to clients to rebalance
(IA) access, and building their propositions to their portfolios in line with this optimized
introduce clients to private market solutions, methodology, in consultation with those
which are less accessible to retail investors clients. Indeed, this bank sees the future
than other asset classes. Such offers help model as being enabled by true, goal-
to cement this kind of highly personalized, based, omni-channel advisory.
human relationship.
28 The future is calling: How advisory will define wealth management in Asia29 The future is calling: How advisory will define wealth management in Asia
Accenture’s Next-Generation Advisory The framework maps the components of a
Framework demonstrates how firms can wealth management proposition, such as
use such a model to provide them with a client segmentation and communication
target for innovation that could help them channels, to 13 key areas to get right—
meet their clients’ advisory needs—from labelled A through M in Figures 11-13.
mass and emerging clients to UHNW, We highlight some of these key areas
across the range of client personas, and below, but for an in-depth look at the
with a full suite of propositions available framework, please see Appendix 2.
across all channels (see Figure 11).
Figure 11: Accenture’s Next-Generation Advisory Framework
M
C D E
Clients and personae Proposition Channel
A Invest Structure
UHNW Unsure Branch
Financial Planning Tax B
HNW Retirement Legal Advisors (RM, ICs)
Transactor Investments Personal Insurance
Invest and Trust and Legacy
Affluent Family Call Center
Purpose Beyond
Validator Business
Emerging Philanthropy
Events Mobile (App) Mobile (Msg)
Lifestyle and Travel
ESG and Sustainability
Delegator Health and Wellness
Mass Passion (Art, Wine, etc.) Web Banking
Learning and Education
Investment Research and Strategy e.g. CIO view creation, content format, distribution F
Processes e.g. E2E customer journey mapping, streamlining G H
Policies e.g. risk frameworks, overall governance, pricing I
Enablers
Platforms and Tools e.g. systems, RM and customer tools
People e.g. incentives, training J
Data and Insights e.g. on- and off-us data, information and analytics K L
Key areas to get right
A Financial education at scale F CIO insights and engagement K Leverage open banking
B RM selection G Wealth continuum lifecycle (client and RM) L Insight automation (client and RM)
C New products and offerings H Sales and marketing innovation M Embedding personalization
and hybrid advice
D Partners and ecosystem I Preparing for regulatory change
E Portfolio construction J Re-skilling talent for digital advisory
Source: Accenture Analysis, 2022
30 The future is calling: How advisory will define wealth management in AsiaThere are gaps between how clients and
firms perceive next-generation advice
Our surveys indicate that clients As Figure 12 shows, firms are focusing
see the value in next-generation on certain next-generation initiatives
advisory services. They also show, such as portfolio construction,
investment insights and new products,
however, that firms themselves
whereas Asia’s investors see a wider
do not appreciate its potential application of next-generation advisory.
in the same way their prospective
and existing clients do.
Figure 12: Firms are focused on some areas of next-generation advice, clients on many more
Clients interested in all aspects But firms focused on only
of next-generation advisory a handful of themes
E Portfolio construction 61% +13pp 74%
CIO insights
F 59% +21pp 80%
and engagement
B RM selection 59% -39pp 20%
C New products and offerings 59% +26pp 85%
G Wealth continuum lifecycle 57% -32pp 25%
A Financial education 57% -2pp 55%
Embedding personalization
M 55% -20pp 35%
and hybrid advice
L Insight automation 54% -9pp 45%
D Partners and ecosystem 54% +1pp 55%
K Leverage open banking 53% -38pp 15%
H Sales and marketing innovation Not applicable 26%
Preparing for regulatory
I Not applicable 95%
change
Re-skilling talent for
J Not applicable 30%
digital advisory
Sources: Accenture’s Asia Affluent Investor Survey, Q1 2022 and Accenture’s Asia CXO Industry
Benchmark Survey, Q1 2022
Question asked: How important are the following wealth advisory service components to you?
Left chart shows the percentage of investors responding “important” and “extremely important.”
Right chart shows the percentage of firms stating their focus on the area.
31 The future is calling: How advisory will define wealth management in AsiaOne of the areas where there is a large gap A third large gap is apparent when it comes
between clients and firms is RM selection. to leveraging open banking, a platform that
Here, next-generation advisory offers allows banks and third parties to share data
scope for discovering best-fits between in order to make financial planning simpler
individual clients and RMs. Currently, the and easier. Although this is currently a reality
process is top-down, with no client input, only in Singapore through SGFindex, other
an approach that can lead to mismatches. regional countries are following its lead.
Open banking offers advisory propositions
A next-generation approach might be for a that leverage off-client financial data, greatly
client to input their preferences and interests increasing their potential depth and breadth.
into the system, which would then match
them to RMs based on their capabilities, Then there is insight automation, which
capacity and overlapping personal interests, uses data and analytics to suggest optimal
allowing the client to then contact the next-best investment ideas to clients, either
RM he or she deems the best fit. This has directly or via RM intermediation (as the
the potential to forge more productive Early Look sidebar on RM empowerment
relationships: when clients have more in on page 52 below investigates).
common with an RM, they tend to do more
business and are more likely to refer them. Lastly, firms seem to be embedding
personalization into the client journey.
Another gap relates to the wealth continuum Client demands are increasingly shaped
lifecycle, where again clients see scope by their experiences in other industries
for innovation. Given the macroeconomic such as technology and hospitality, where
growth and demographics of Asia as a region, personalization is built into the client
many young clients with limited resources experience across proposition, channels
at the beginning of their banked lives have (across information gathering sales, and
high future wealth potential. Firms need to service) and even pricing. However,
ensure that the client proposition and the firms appear to be struggling to allocate
RMs that serve these clients grow in line sufficient mindshare and focus to enabling
with the clients’ burgeoning prosperity, in this key next-generation theme.
terms of the products and services being
offered and the career paths of the RMs.
Although many firms have such plans Firms are focusing on next-
these would need to become reality for generation applications such
clients and RMs to perceive the value.
as portfolio construction,
investment insights and new
products, whereas Asia’s
investors see a wider application
of next-generation advisory.
32 The future is calling: How advisory will define wealth management in AsiaEarly Look
Digital assets: Unclaimed territory
This “Early Look” sidebar is (see Figure DA1). While younger investors are
derived from the research that more exposed to digital assets the trend is
Accenture undertook in early consistent across markets, wealth bands
and genders.
2022 and is a summary of an
in-depth separate report on
Digital assets are going to become far
digital assets investing in Asia. more popular. Currently, 52 percent of
affluent investors in Asia hold digital assets of
Digital assets21 are a top-five asset class some sort. Accenture’s research indicates this
for investors in Asia. On average, affluent could reach 73 percent by the end of 2022.
investors in Asia allocate seven percent
of their portfolio to digital assets—more
than forex, commodities or collectibles
Figure DA1: Current percentage allocation of investable financial wealth across asset classes
Other investments
1% Foreign exchange
1% 0% 2% 1% 1% 1% 0% 1% and currencies (excl.
2% 4% 3% digital assets)
4% 3% 5% 3% 5% 4%
4% 2%
3% 5% 6% 5% Commodities
6% 6% 3% 6% 5%
4% 5% 3% 4% Collectibles
4% 6% 6% 5%
6% 8% 3% 5% Private equity
4% 6% 5% and venture capital
6% 6% 4% 6%
4% 5% 6% 13% 5% Hedge funds
6% 6% 8%
7% 6% 7% Digital assets
13% 7%
7%
7%
15% 9%
9% 14%
15% Real estate (inc. REITS)
15%
16%
20% 36% 15%
13%
16%
13% 16% Cash/cash equivalents
13%
12% 12% 14%
14%
18% 17%
14% 16% Fixed income
16% 19%
18% 12%
29% 24%
22% 19% 21% 19% 22% Equities
15% 18%
Overall
Source: Accenture’s Asia Affluent Investor Survey, Q1 2022
Question asked: We are particularly interested in how you have invested your money. What percentage does each
of these asset classes approximately represent in your current investable financial wealth (excl. primary residence)?
(Figures may not sum due to rounding.)
33 The future is calling: How advisory will define wealth management in AsiaFor wealth management firms, digital assets advisory-led proposition that includes all these
are a US$54bn revenue opportunity— digital asset types. For their part, RMs say firms
that most are ignoring. Transaction fees can help to overcome their client hesitancy
represent US$40bn of this potential revenue by providing more insight and content.
pool, with the rest shared equally between
advisory fees and custody fees. Yet two- Digital assets represent a rare, clear
thirds of wealth management firms in Asia industry white space with significant
have no plans to offer any form of digital business opportunity. There is no excuse
asset proposition (see Figure DA2). Most of for firms to lack a strategy and plan to
those that do are targeting the relatively small enter this space. To succeed, firms need
US$7bn custody element only. to first ask themselves questions in five
key areas that could shape their digital
This lack of engagement by firms means many assets proposition: clients; products
clients are seeking advice about digital assets and services; competition; value-chain
on unregulated forums, including peer-to- ownership; and regulatory constraints.
peer advice on social media. Yet clients—
and their RMs—want firms to provide more Having answered the questions in those five
support in the digital asset space. areas, most firms use one of two archetypes:
an end-to-end (E2E) ecosystem or modular
Wealth management firms are holding back adoption. There is no one “best” solution,
for various reasons. Among firms’ barriers to and each has advantages and disadvantages.
action are a lack of belief in (and understanding
of) digital assets, a wait-and-see mindset, While many firms are hesitant to enter the
and—given that launching a digital assets digital assets space, and for a range of
proposition is operationally complex— reasons, their competitors have shown that
choosing to prioritize other initiatives. success is possible. Barriers to client adoption,
like price volatility and the safekeeping of
Clients want their firms to support their digital assets, can be overcome—and indeed they
asset pursuits. While cryptocurrencies and need to be, because clients and RMs want
custody support are important, clients want a digital assets proposition. Firms that
their firms to go even further and offer an do not act risk being left behind.
Figure DA2: Most wealth management firms in Asia are not focused on digital assets
Initiative Focus
9% (where yes/planned) Proposition Focus
24%
Custody High
Most Asian
wealth firms do
not have a plan Advisory Medium
for digital assets
Transaction Low
67%
Unknown (Planning) High
Already offering No plans Planning
Source: Accenture’s Asia CXO Industry Benchmark Survey, Q1 2022
Questions asked: Does your firm currently, or does it plan to, have initiatives that focus on digital assets?
If so, which services is it targeting?
34 The future is calling: How advisory will define wealth management in AsiaEarly Look
Good to grow: The rise of ESG investing in Asia
This “Early Look” sidebar is derived At the same time, client-demand for
from the research that Accenture ESG investing is rising. Although wealthy
undertook in early 2022, and is a investors in Asia lag their peers elsewhere,
with just 32 percent currently investing
summary of an in-depth separate
along ESG lines, Accenture’s research shows
report on ESG investing in Asia. penetration will likely more than double in
Asia in 2022 (see Figure ESG1). However, firms
The regulatory push towards mandatory
should know that clients want better ESG
disclosure of ESG risks by corporates is key
investment solutions—in particular, funds,
to understanding why ESG investing is poised
ETFs and fixed income solutions that are
to take off in Asia. However, this regulatory
delivered via an end-to-end advisory offering.
push means wealth management firms need
to enact wholesale changes to their product
offerings and operating models.
Figure ESG1: ESG investing among affluent investors in Asia will likely more than double in 2022
Demand is high Demand is especially driven
amongst clients by Southeast Asia and India
~70% 70–82%
of clients in Southeast Asia
77%
of clients in India
of all clients have invested or have plans have invested or have plans to invest
to invest in the ESG in the next 12 months in ESG in the next 12 months
82% 81% 77% 74% 73% 70%
Currently investing 33%
38% 22% 57%
41% 36%
Not currently investing 48% 35%
37%
but plan to invest in the 37% 38%
56%
next 12 months 44% 21%
41% 38% 36%
No plans for investment 24% 19% 16%
21%
in the next 12 months
Not sure 8%
Currently investing
Not currently investing but plan
to invest in the next 12 months
Source: Accenture’s Asia Affluent Investor Survey, Q1 2022
Question asked: Are you planning to invest in ESG in the next 12 months?
(Figures may not sum due to rounding.)
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