Press release

29 Apr. 2021

Australian wealth management clients want more personalised service, willing to share data and pay more: EY report

72% of Australian survey respondents are willing to share personal data to improve services with their primary wealth manager. 54% of Australian respondents want to consolidate all their financial relationships in one place – across private banking, wealth, insurance and investment services. Demand for purpose-driven investment is rising, with 72% of Australian respondents believing it is important to consider environmental, social and governance (ESG) parameters in their portfolios

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EY Oceania

Multidisciplinary professional services organization

  • 72% of Australian survey respondents are willing to share personal data to improve services with their primary wealth manager
  • 54% of Australian respondents want to consolidate all their financial relationships in one place – across private banking, wealth, insurance and investment services
  • Demand for purpose-driven investment is rising, with 72% of Australian respondents believing it is important to consider environmental, social and governance (ESG) parameters in their portfolios

Over half (55%) of Australian wealth management clients surveyed are willing to pay more for personalised service, according to new research from EY. The 2021 EY Global Wealth Research Report also found that, in exchange for greater personalisation, the majority of Australian wealth management clients (72%) are willing to share personal data with their primary wealth manager, a higher proportion than those willing to share such data with banks, insurers, retailers, technology firms and media platforms.

As a result of the COVID-19 pandemic, 32% of Australian respondents expect the relationship with their wealth manager or advisor to become less personal from a human interaction perspective. At the same time, technology use is also evolving, with 43% of Australian respondents planning to use more digital and virtual tools in future.

Based on a detailed survey of 2,500 wealth management clients in 21 geographies, including Australia, the 2021 EY Global Wealth Research Report uncovers what investors value in their wealth management relationships and how it changes across service models, engagement choices and value-aligned advice.

Continued focus on pricing and value

A majority (83%) of Australian respondents are aware of trading and product fees, yet 29% remain concerned about hidden costs when working with their wealth manager. While this is significantly lower than the global average, where 42% of clients are concerned about hidden costs, there is still some scope to continue to improve transparency and education locally.

Wealth management clients also want to change the way they pay for specific wealth and investment services. For discretionary wealth management, there is growing preference for performance-based fees (51%), which create a stronger perception of alignment between charges and value creation. However, for basic wealth offerings like life goals coaching and portfolio reports, 18% and 27% of Australian respondents respectively expect to receive them at no cost by 2024.

Rita Da Silva, EY Oceania Wealth & Asset Management Leader, says:

“Perceptions around the value of wealth management products and services are changing rapidly, and experiential factors are increasingly becoming key drivers of pricing. While clients are expecting access to more of their basic services for free, they are still willing to pay extra for a tailored and more holistic experience. Leading firms will provide curated interaction points, allowing clients to enter the advisor-digital spectrum at a point of their choosing, and customise communications according to their evolving needs.”

Clients place greater emphasis on purpose 

Beyond purely financial outcomes, the research also shows that wealth management clients are looking to build purposeful investment portfolios and wealth relationships. A majority (76%) of Australian respondents have personal sustainability goals, yet 41% feel their wealth manager falls short in understanding their values. At the same time, interest in specific environmental, social and governance (ESG) themes has increased over the past year.

In light of this, a major reallocation of investments could be on the cards – with 72% of Australian respondents believing it is important to consider ESG parameters in their portfolios and impact investing expected to grow 14% by 2024, reaching an average adoption level of 43% (higher than the global average of 35%).

“ESG factors are clearly becoming increasingly important to Australian wealth management clients in considering their investment portfolios, with climate change and carbon emissions (47%), better worker welfare and human rights (29%), and air and water pollution (24%) the top three ESG issues Australian respondents said would be important to have considered or integrated into their future investment portfolios,” Ms Da Silva said.

“Wealth managers should consider offering end-to-end ESG investing journeys underpinned by a broad choice of ESG investing options. Tailored guidance and advice, flexible educational options, supplemental research on important topics and clear accountability that links to their wider sustainability strategies will be key.”

Diversity and Inclusion (D&I) becomes increasingly important, as consolidation of relationships gains interest 

According to the research, half of Australians surveyed (54%) want to consolidate all their financial relationships in one place – across private banking, wealth, insurance and investment services – but 66% of those who would like to consolidate have yet to choose a sole provider. Even among investors who prefer multiple financial providers, 40% say they would pay more to access a consolidated view of their investment portfolios, pointing to a greater need to deliver an ecosystem of financial services.

One deciding factor in wealth manager selection is a firm’s diversity and inclusion (D&I) practices, with 57% of Australian respondents seeing D&I efforts as important when evaluating a wealth manager (higher than the global average of 48%). Firms that fail to demonstrate empathy will struggle to attract new clients and risk losing a significant proportion of existing ones, even as the wealth of women and other under-represented groups is growing globally.

“Wealth managers who are able to personalise products and services, enhance purpose and provide more tailored offerings will become increasingly popular as the demand for more holistic approaches to wealth management rises. The key to achieving this is through collaboration with other providers, from health insurers to competitors, in order to deliver an ecosystem for clients. This will have profound implications for wealth managers’ service models, who will need to decide between becoming a one-stop shop or a specialist provider,” Ms Da Silva said.

For more information on the 2021 EY Global Wealth Research Report, please visit ey.com/wealthresearch.

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Press Contact

Rebecca Aley
Ernst & Young Australia
+61 418 835 849
rebecca.aley@au.ey.com

Notes to editors

About EY

EY exists to build a better working world, helping to create long-term value for clients, people and society and build trust in the capital markets.

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Working across assurance, consulting, law, strategy, tax and transactions, EY teams ask better questions to find new answers for the complex issues facing our world today.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data and a description of the rights individuals have under data protection legislation are available via ey.com/privacy. EY member firms do not practice law where prohibited by local laws. For more information about our organization, please visit ey.com.

This news release has been issued by Ernst & Young Australia, a member firm of Ernst & Young Global Limited.

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2021 EY Global Wealth Research Report methodology 

EY Global Services Limited worked with Savanta to conduct a comprehensive survey of 2,500 wealth management end-clients in 21 geographies (North America – US, Canada, Latin/Central America including Argentina, Brazil, Chile, Mexico; Europe including France, Germany, Italy, Luxembourg, Switzerland, UK and the Nordics including Norway and Sweden; and Asia-Pacific including Australia, China, Hong Kong SAR, India, Japan and Singapore) to understand what they value most in their wealth management relationships across service models, engagement choices and value-aligned advice.

EY profiled wealth management end-clients not just by traditional segments, such as age, gender, wealth and location, but also by risk appetite, life stages, profession, sexual orientation, race and ethnicity and psychographic profiles. EY also asked respondents to rate their knowledge in managing their finances and divided them into low, average and high categories depending on their knowledge of common and complex financial products.