Wealth managers faced an unsettling combination of practical disruption and enforced reflection during 2020. As the dust raised by the COVID-19 pandemic begins to settle, 2021 promises to be the year when clients financially de-clutter their lives and refocus on their most important priorities.
Our newly released 2021 EY Global Wealth Research Report (pdf), which surveyed wealth management clients in 21 geographies, confirms that the pandemic has had a far-reaching effect on wealth clients’ beliefs and world views.
Going beyond the appreciation for digital channels, clients are becoming more risk-averse and increasingly focused on achieving personal goals aligned to their purpose, and enhancing their financial protection, diversification, and security.
As they contemplate their providers, clients value an altered range of tangible and intangible factors. Our research highlights a new opportunity for wealth firms to deliver long-term value across three key dimensions of the wealth experience:
- The core services clients receive
- Clients’ engagement with firms
- Firms’ ability to implement purposeful legacies
Firms have an opportunity to develop an ecosystem model that delivers a consolidated network of financial products and services, diversifies risk and enhances protection. While clients are expecting more for free, they are still willing to pay extra for a tailored and more holistic experience.
The appetite to diversify financial products, most notably through the greater use of alternative investments, is strong. Nearly half of investors want to consolidate their financial activities, across private banking, insurance, wealth and investments, in one place. More than 75% of that group have yet to choose a single provider, creating a huge potential opportunity for wealth providers.