Optimism for the future has declined among high-net-worth individuals (HNWs), despite an improvement in their economic performance last year, a survey by Scorpio Partnerships, Standard Chartered Bank and SEI has found
Optimism for the future has declined among high-net-worth individuals (HNWs), despite an improvement in their economic performance last year, a survey by Scorpio Partnerships, Standard Chartered Bank and SEI has found.
According to the 2012 Futurewealth Report, which surveyed 3,300 HNWs with an average net worth of $2.5 million, confidence for the future fell 10 points on a 100-point confidence scale despite improved wealth creation last year. Despite robust wealth creation in the Asia-Pacific region, confidence has fallen back seven points among Asian HNWs.
This stands in contrast to previous surveys, when the high levels of confidence of HNWs surprised the reports’ authors given the depth of the financial crisis.
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The report focuses on the attitudes of the ‘future wealthy’, those who are worth around $2 million today and aim to triple or quadruple their earnings in the next ten years. As prized customers for those in the wealth management or luxury industry, the survey aims to offer insights into capturing future wealthy customers.
It notes that the future wealthy are discerning customers, who take an average of 43 days before making a big purchase, in which they spend an average of $17,300. They pay an average of $16,200 a year on wealth management fees, and take 50 days on deciding whether to open an account with a private bank. Private banks are advised to take inspiration from leading technology firms like Apple, and to focus their efforts on promoting brand loyalty and delivering efficient care.
Private banks and luxury brands aiming to tailor their service to their clients are advised that the biggest determinant of HNW attitudes is age, followed by clients’ behavioural profile and their geographical location. Younger HNW clients, for instance, are more likely to see the benefit of events and corporate hospitality, whereas older clients value personal contact and smooth transaction processing more highly.
The survey outlines four behavioural profiles: whether HNWs are ‘quietly confident’ about their wealth, whether they are ‘headliners’ who seek the limelight, ‘life surfers’ —diplomatically described as those who ‘enjoy a good measure of fun and enjoyment in their lives’ or ‘family activists’, those who cite their family as the greatest motivator for success. These affect attitudes towards private banking: for instance, the ‘quietly confident’ are more likely to value much of what a private banking relationship can bring, while the ‘headliner’ is harder to please, and is likely to respond negatively to ‘schmoozing’.
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Less important determinants of HNW client attitudes are their level of wealth, followed by gender and whether they run their own business.
The Futurewealth survey is now in its third year and has interviewed over 8,000 HNWs on their attitudes towards wealth since 2009.
