18/09/20

WEALTH MANAGEMENT: Family offices and other wealth managers face multiple threats, according to report.

As published on wealthprofessional.ca, Thursday 17 September, 2020.

The sudden gear change that 2020 has brought new challenges for the those managing wealth for the super-rich; but there is overall optimism for what’s ahead.

That’s according to a new report on the ultra-high-net-worth (UHNW) wealth management market, which focuses on the impact of the pandemic along with other trends fuelled by generational and demographic trends.

The report from KnowLedger says that Technology is becoming a key part of the story, despite a lag in adoption by family offices and other wealth management firms, especially those serving the wealthiest clients.

"Family offices and other wealth management firms are facing threats on several fronts," said Ryan Kerry, the accounting tech firm’s CEO. "Major demographic shifts and rapidly changing customer expectations, coupled with serious competitive threats, are pushing these firms to level-up legacy systems and processes to provide a more seamless customer experience."

Citing Knight Frank data, the report puts the population of UHNW individuals at 513,244 globally. The definition used was those with assets of more than US$30 million.

A recent report shows how these wealthy people have changed their spending during the pandemic.

The report notes that family offices and other wealth managers working with these clients are under pressure to address “the new face of global wealth” which includes younger investors – super-rich millennials – and more women controlling large self-made fortunes.

It also reaffirms the need for wealth management firms to embrace digital transformation. The industry has been slower than some others to do so and the family offices sub-sector even more so.

Although no two family offices are the same, Kerry says there are some common challenges, but many firms are only just starting to address them.