Underserved and Oversold

By Elsa Pau
Publisher and Editor-in-Chief

Walking along Des Voeux Road in Central could give one an idea how much wealth is concentrated here, whether it is the spending or saving or investing, you’ve got a whole world of suppliers in your hand if you had the money.

Wealth is growing all over the world, especially in this region, with growing GDP, RMB internationalization and substantial money flowing into this part of the world, etc…and many promising factors that could persevere this growth. With the wealth accumulated by the beneficiaries of these favorable conditions, these individuals are seeking to grow and protect this wealth. However, these highly educated individuals, often referred to as the Mass Affluent with liquidity between US$ 100,000 and US$ 1mil, although considered well-off are not qualified for private banking services. As a result, they are offered off-the-rack investment and protection products intended for the retail market. On the same token, the mass affluent segement also comes in different sizes (of wealth) and colors (of hair), and importantly they have different needs.

Failure to recognize these needs for mobility, security and risk tolerance, and the breakdown of understanding of their lifestyle goals and purpose in life, means banks and insurance companies are not able to channel the right products and advisory services effectively.

Because these mass affluent individuals are highly educated and to some extent, opinionated, they are more likely to keep control of their investment, but still seek for professional advice which they can review and refute or validate. Communication and reporting is also important to them, but they prefer an arms-length advisory approach. They are also seeking the right platform, an integrated one where they can experience a one stop solution with the best investment range of products and transparencies that comes across in multi-channel technology, but also the most cost-effective.

Easily said than done, our mystery shopping experiences tell us that most of the premium and priority banking services fail to accomplish these objectives, or at least in an effective manner. Most of the relationship managers are not equipped to deliver a holistic and personal approach, and in most cases, customers in this category are objects for profiling – how old they are and how much money they make, the number of children and how soon do they need the money, etc…then there comes a model portfolio that was designed to fit this profile of a human being. I sympathize with the banks, because regulators have made it so difficult for managers to become personal and dedicated to their customers. It has become a box-ticking business, with the aim to avoid being challenged by the authority and subsequently face a fine or be reprimanded.

Given these circumstances, our Wealth Management Awards is dedicating a pillar to the Mass Affluent market beginning this year (entry opens on May 7), with the focus on awarding providers with targeted customers in the range between US$100,000 and US$1 mil.  This award is designed to assist Mass Affluent customers by identifying providers who put them in the forefront by adopting the highest commitment to governance, client servicing initiatives, product offerings and implementation of technology. You can find successful awardees in the past on www.WealthAwards.asia and upcoming categories that might be relevant to you.

The other pillar of these awards is for the Private Wealth category, where we would assist high net worth individuals to find providers who are best in legacy planning, estate and succession planning, and those with unique offerings for business owners and the widest range of investments. Stay tuned as we announce the opening for entries in September.