More than 50% of HNWIs are interested in wealth management services offered by BigTech firms such as Amazon, Google and Alibaba. This could result in around $12 trillion of asset flows to BigTech wealth offerings, according to a report by Capgemini.
Capgemini’s World Wealth Report 2018 (WWR) revealed that the interest in BigTech wealth propositions was highest among HNWIs in Latin America at 87.8%. Asia-Pacific excluding Japan followed suit with 81.5% of HNWIs in the region found interested in this type of offerings.
Inclination towards BigTech wealth offerings was most pronounced in HNWIs aged under 40 years, with 75.8% in this segment found open to these services. On the contrary, only 21.9% of HNWIs aged 60 and above were found open to these offerings.
The study also found wealth firms speeding up move to hybrid in anticipation of BigTech entry.
Around 57.1% reported a hybrid transformation programme underway this year, a 3.4% rise over last year.
Importance for hybrid advice was most evident among HNWIs in Latin America (76.1%). Importance placed on hybrid advice by HNWIs in Asia-Pacific excluding Japan, North America, Europe, and Japan was 68%, 55.2%, 48.4%, and 29.3%, respectively.
In order to drive hybrid transformation, firms were also found to make investments in innovative technologies such as intelligent automation and artificial intelligence.
However, Capgemini believes that the transformation plans are not fast enough, considering the decrease in HNWI satisfaction level with hybrid advice.
Capgemini financial services strategic business unit head and member of the group executive board Anirban Bose said: “We are seeing that returns alone cannot sustain a wealth management business. Hybrid models are gaining popularity because HNWIs can tap into financial planning services in a modular, pay-as-you-go manner and take control of their wealth management journey. Depending on their needs, they can choose from automated self-service delivery, a wealth manager-led approach, or a combination of the two.”