apac gen y presentation to fund forum sharing uhnw and hnw investor insight

© Scorpio Partnership 2013 |1

Scorpio Partnership’s Asia’s Millionaires: catering to the future customer

Hong Kong, April 2013

CREATING A STRATEGY AROUND APAC’S WEALTHY GENERATION YIntegrating technology, relationships and finance

to cater for the future customer



Topics to cover

1. Who are Asia’s HNWs?

2. What do they want?

3. How do they want it?

4. Why do they want it?

5. When do they want it?

6. Who do they want it from – the FutureAdvisor?



The R&D edge of the world: FutureWealth, FuturePriority & FutureAdvisor



Meet the APAC HNW digeratti



Generation Y? More like Generation Y-not now…The debate over whether Gen-Y consume financial services differently is vigorous. The thinking is often they are a sub-set of a “normal” client.

We disagree. In fact, thinking about Gen-Y in isolation is a mistake…



The APAC client is on the move – catch them if you canAmbition:Considering your money goal, how much do you need in US dollars and how long do you think it will take you

to achieve this sum?

The wealth goals of the Asia region are similar to those of the wealthy round the world. They want to triple their wealth within a 10 year time frame.

It is worth noting this is not biased much by age…

Source: Scorpio Partnership



The APAC client is not irrational in their expectationsConfidence: Do you think your wealth will increase over the next 12 months?

The spotlight may be on Asia as the engine room for global growth.

But, in Asia, the wealthy are looking at the global situation and recalibrating their expectations.

The role of the advisor is key…




Their future plan for investments

75%

74%

75%

52%

46%

52%

15%

42%

19% 19%

1% 1%

76%

52%

73%

53%43%

32%

20% 20%23%

16%

1%

54% 54%

14%

16%18%

26%

22%

10%

16%

16%

6%

8%

64%62%

24%

34%

38%

26%

28%

14%

24%

6% 2%

6%

61%

73%

53%

47% 43%

43%

27%

24%

27%

19%

5%

1%0%

20%

40%

60%

80%

% o

f res

pond

ents

Cash Real Estate Equities Bonds Mutual FundsCash EquivalentsCommoditiesCollectables (Art, Antiques etc.)Private EquityNatural Resources Other None of these

China Hong Kong Indonesia Philippines SingaporeVehicles:In which of the following asset classes would you like to have investments in within the next five years

75%

74%

75%

52%

46%

52%

15%

42%

19% 19%

1% 1%

76%

52%

73%

53%43%

32%

20% 20%23%

16%

1%

54% 54%

14%

16%18%

26%

22%

10%

16%

16%

6%

8%

64%62%

24%

34%

38%

26%

28%

14%

24%

6% 2%

6%

61%

73%

53%

47% 43%

43%

27%

24%

27%

19%

5%

1%0%

20%

40%

60%

80%

% o

f res

pond

ents

Cash Real Estate Equities Bonds Mutual FundsCash EquivalentsCommoditiesCollectables (Art, Antiques etc.)Private EquityNatural Resources Other None of these

China Hong Kong Indonesia Philippines Singapore

Source: Scorpio Partnership, Sungard



Their future behaviours for investingWealth management in Asia in 5 years:How much more do you expect to do the following in 5 years’ time?

In general, APAC’s HNWs expect the internet will become more significant influence. As will financial advice…




Their preferred future investment fund advice channelsWealth management in Asia in 5 years:Who will you turn to as your primary decision making support for wealth matters in 5 years’ time?




Understanding the behaviour patterns of the APAC digeratti



The purpose of wealth managers to APAC’s wealth clients

Wealth management clearly has a role for wealthy people. In APAC, the trend is toward the wealth management firm being a centre of information, knowledge and access AS WELL AS basic market execution

?

Access to specific markets investments and markets: 49%

Lack of knowledge: 35%

Lack of time: 25%

Preference to delegate: 22%

Disinterest in investments: 8%

Other: 2%

APAC HNW clients are using their financial advisors for:




Getting to the heart of their wealth is through the digit(al)

91% 85% 85%

57% 42% 40% 23%

The most established micro-processing gear – the laptop and desktop computers remain the most important for Asian HNWs when conducting financial transactions but their bags are brimming with digital kit … .




The access to finance through apps are substantial

80%83%

75% 79%

68%72% 74% 77%

62%

73%

54% 52%

44%

51%47%

44%

64%

48%

25%

84%

50%

36%

42%38%

58%

20% 22%

12%16%

2%

70%

50%53%

38%

28% 28% 16%23%

0%

20%

40%

60%

80%

100%

China Hong Kong Indonesia Philippines Singapore

% respondents

Social

net

workin

gNew

s

Bankin

g

Mus

ic

Map

s/ Nav

igatio

n

Games

Wea

ther

Video/

Mov

ies

Shopp

ing/ R

etail

Trave

l

Inve

stmen

ts

Educa

tion/

Lea

rning

Lifes

tyle/

Hob

bies

Dining

/ Res

taur

ant

Health

Sports

House

hold

Portfo

lio m

onito

ring

I don

’t use

any

app

s

Usage of apps in Asia:Which of the following do you use apps for to enable your activities online?

APAC HNWs uptake of apps for wealth management is TWICE that of America or Europe




4.1 hours

3.5 hours

2.6 hours

3.7 hours

1.8 hours

1.6 hours

1.9 hours

3.9 hours

3.7 hours

3.5 hours

2.8 hours

2.4 hours2.2 hours

1.9 hours

3.9 hours

3.8 hours

3.5 hours 3.1 hours

2.8 hours 2.8 hours

2.2 hours

4.8 hours 4.4 hours4.2 hours

3.4 hours

2.5 hours 2.4 hours

3.2 hours

.0 hours

1.0 hours

2.0 hours

3.0 hours

4.0 hours

5.0 hours

% o

f res

pond

ents

News Social Media Investments General research Online purchasing Gaming Banking

$1m to $2m $2m to $4m $4m to $6m More than $6m

The activity online increases not decreases with fortunes China HNWs top the charts for use of digital for banking and investments. HK and Philippines are close 2nd …




The wealth digeratti lead the way globally in terms of techno-talkChannels of dialogue with the wealth advisorOver the next few years do you expect to be using these communications more or less or the same when interacting with your financial provider




Their needs are also very clear and technology enables them/usThe purpose of online for wealthWith reference to your personal finances, when it comes to your devices, in five years how much do you expect to use them for the following:

The digital gateway is part of the future wealth advice model for APAC’s HNWs.

Wealth managers are adapting, but perhaps not quick enough …




Can APAC wealth management adapt to the technology?



In terms of hitting the value notes so far so good in Asia, but is it?The value of the industryHow would you rate the industry in terms of value for money today?

?




The advisors are stretched in terms of demands on their abilitiesExpectations upon the APAC wealth advisorIn your opinion, what do your private clients value from providers of wealth management services?




Aligning the future wow factors in wealth is now the challengeTop influences when selecting a wealth management in AsiaWhat are the main influences in making a decision to choose a wealth manager?

Client response

Advisor response




The advisors are hunting for new business and classic pools are dry

Answering emails

(5.1 hours)

Client meetings(4.9 hours)

Looking for new clients(4.7 hours)

Phoning clients

(4.2 hours)

Research on markets(4.3 hours)

Non-client meetings(3.7 hours)

Compliance paperwork(3.5 hours)

General paperwork(3.4 hours)

Client reporting(3.1 hours)

Training(2.2

hours)

Time management of the wealth advisorHow are you allocating your time in an average 40 hour week on these activities?

China RM manage an average of 118 clients while in Singapore it is 75 per RM. All RMs feel stretched in terms of client service delivery




The advisors are aware they can let the clicks do the talkingThe rise of the technology elements for an APAC wealth advisorWhich of the following devices do you think you will use MOST within five years to help you carry out the following activities?




But wealth management firms digital surfboard needs some R&DThe challenges of the technology elements for an APAC business modelDo you feel your main financial provider delivers appropriate technology to do the following?




While the wealth world is shifting on the engagement wave lengthThe changing face of digital interactionWhat qualities would you LIKE TO SEE in your main financial providers use of technology

Digital Wealth Management now

Digital Wealth Management future




Thinking about the Asia HNW client revolution



Conclusions: so why should we care?

1. Who are Asia’s HNWs?

2. What do they want?

3. How do they want it?

4. Why do they want it?

5. When do they want it?

6. Who do they want it from?

1. An attractive global clientele

2. Sustained wealth creation

3. Efficiently and locally

4. Ambition and preservation

5. Within a decade

6. Wealth managers have a role



Questions – was it worth it for you?



The R&D edge of the world: biggish data



@whatwealthneeds http://on.fb.me/11o5VD2http://linkd.in/ZSdor7

Come and say hello, we’d love to meet you via…



Scorpio Partnership is the leading consumer insight and strategy consultancy to the global wealth industry. We specialize in understanding and researching a cross section of wealthy clients, turning financial research into actionable consumer insight to stimulate UHNW client engagement.

Scorpio partnership has been voted best global consultancy to the wealth management industry for three consecutive years (2007-2009), runner up for Agency of the Year two years in succession (2010-11) and was the 2012 runner up for the Judges Award for financial services insight. The firm is currently in the final shortlist for the 2013 Thought Leadership of the Year in Asia.

The firm is independent and owned by managed.

You can find our other reports, UHNW consumer insight and HNW financial research in the Knowledge bank of our website: http://www.scorpiopartnership.com/knowledge.php

apac gen y presentation to fund forum sharing uhnw and hnw investor insight

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