What HNWIs Expect in a New Era of Volatility Webcast_What H… · Hong Kong. Switzerland....

Copyright © 2017 FactSet Research Systems Inc. All rights reserved. Confidential: Do not forward.

Host: Greg King, FactSet

Speakers: Annie Catchpole and Tasha Vashisht, Scorpio Partnership

What HNWIs Expect in a New Era of VolatilityA FactSet Webcast

Webcast Housekeeping


Building Resilience

3Copyright © 2017 FactSet Research Systems Inc. All rights reserved. Confidential: Do not forward.

Against a context of volatility, one must question whether the existing frameworks for understanding and measuringrisk in the advisory relationship are sufficient.

FactSet & Scorpio Partnership


Annie CatchpoleDirector

Tasha VashishtSenior Manager



1123

688

434

177

442504

304203

156203

75 75 107

413 418

291

62

453

334274

0

200

400

600

800

1000

1200

Over

all

Male

Fema

le

Unde

r 35s

35-5

4

55 or

abov

e UK US

Cana

da

Sing

apor

e

Hong

Kon

g

Switz

erlan

d

Austr

alia

$500

k - $1

m

$1m

- $20

m

Over

$20m

Activ

e risk

take

rs

Mode

rate

risk t

aker

s

Risk

aver

se

Risk

mini

mise

rs

Gender Age Region Net worth Risk statements

Samp

le siz

eThe research audience

The average net worth of our sample was $2 million.

Our survey highlights four types of risk wealth managers need to address…

The Market Shock• Sudden and unexpected market events catch investors off guard• Clients need confidence and reassurance that their overall plans are robust enough to withstand cyclical movements

The Blind Spot• Investor education has missed the mark, despite HNWIs having so much information at their fingertips• The gap between advisor and client knowledge is growing dangerously wide

The Weak Link• Many HNWIs are tempted by knee-jerk responses to market events because they do not understand their own risk profiles• Firms have failed to make their risk profiling processes clear and transparent

The Achilles’ Heel• Regulation and margin compression have intensified the context in which wealth firms operate• Advisors are considered susceptible to slip-ups of communication and judgement


In an uncertain era, investors are starting to believe change may be the only sure bet…


0%

10%

20%

30%

40%

50%

60%

70%

80%

The impact ofunexpected

market events/ systemic risk

Politicaluncertainty

Cyber-security/ fraud and

identity theft

Changingregulatorylandscape

Receivingunsuitable

advice basedon my needs

and risk profile

Impact ofenvironmental

change

Access toknowledge orability to carry

out myfinancial plan

Unsuitable orunclear

financial plan

Notunderstanding

the advice Ireceive

Other None of theabove

% of

resp

onde

nts

UK US Canada Singapore Hong Kong Switzerland Australia Overall

Q: Do you have any major concerns about being able to grow your wealth?

… With decision paralysis the most common response to wealth creation opportunities

Q: How are you responding to these opportunities / threats in the context of your investment portfolio?

Advisors have overlooked a Blind Spot – HNWIs are confused by basic investing terminology


Q. Firstly, we’d like to determine how you assess risk in the context of a portfolio. Which of these portfolios carries the most risk?

13% 12% 3% 2%

77% 76% 81% 85% 85%

4% 5% 8% 3% 4%6% 7% 8% 10% 11%

0%20%40%60%80%

100%

% of

resp

onde

nts

Aggressive investors should only invest in this stockThe stock’s value will remain steadyThe value of the stock will fluctuate over a large range of valuesThe stock is guaranteed to have high returns

Q. If a stock has ‘high volatility’, what does this mean?

64% 20%

16%

Investor resources should use less jargon and highlight key actions to improve understanding


0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Highlight thekey points

Detail therisks faced by

specificproducts or

asset classes

Assessmentof how therisk in myportfolio

differs frommy riskprofile

Provide morecustomisedinformation

for myportfolio

Clarify whatactions

investorsshould take

Use lessjargon

Insight intothe portfoliocompositionof investors

like me

Accessupdatesdigitally

Use morevisual /graphic

depictionswithin content

Organisemore

frequentcirculation of

updates

Include moretechnical

commentaryfor advanced

investors

Other

% of

resp

onde

nts

Under 35s 35-54 55 or above Overall

Q: How could the information on risk provided to you by your wealth managers be made more useful?

Many HNWIs do not fully understand the significance of the risk profile assigned to them


0%

10%

20%

30%

40%

50%

60%

Career events(e.g.

retirement,redundancy)

Personalfactors (e.g.

marriage, birthof child,divorce)

My overallportfolio

changed (e.g.real estatepurchase,

inheritance,sale of

business)

Relocation to adifferentcountry

Market events(e.g. long-term

investmenttrends)

Political events(e.g. changesin leadership

or policy)

I felt that myinitial riskprofile no

longeraccurately

reflects my risktolerance

My financialadvisor

recommendedthat I change it

I switched to adifferentprimaryfinancialadvisor

Other I don't know / Iprefer not to

say

Anticipated Non-anticipated Financial advisor-related Other

% of

resp

onde

nts

Yes - it is constantly changing Yes - it has changed once or twice

Q. Has your risk profile changed since your initial risk profiling assessment? / What has prompted the change(s) to your risk profile?

0%

10%

20%

30%

40%

50%

My preferences aresubject to

interpretation by myrelationship

manager

The information Ireceive may not be

fully accurate

My relationshipmanager may be too

busy to respondpromptly to my

requests

If my relationship manager left the firm, I don’t think

anyone else at the firm would properly

understand my needs

Our conversationsmay not be properly

recorded

I could doubt theintegrity of myrelationship

manager

Other There are no risksassociated with ahuman personal

advisor

% of

resp

onde

nts


Financial technology could help Wealth Managers augment their advisory relationships…


Q: What risks do you associate with working with a human financial advisor?

0%

10%

20%

30%

40%

50%

60%

Cyber-attacks System errors /technology glitches

My needs will not befully understood

Relevance andaccuracy ofinformation

Relevance of advice Poor userexperience

Other There are no risksassociated with the

online wealthmanagementexperience

% of

resp

onde

nts


…But they must also reassure clients that technology solutions are robust and secure


Q. What risks do you associate with your online interactions with your wealth management firm?

10 Ways to Build Resilience in Wealth Management

1. Deploy digital solutions to stimulate investment execution

2. Use technology to complement KYC efforts

3. Clarify the significance of risk profiling for investor activity

4. Address investor blind spots through interactive education

5. Customize content to demographic demands

6. Demonstrate that wealth plans are shock-resistant

7. Provide full visibility of portfolio composition

8. Harness systems that can quickly communicate the “house view”

9. Introduce behavioral data to understand client sentiment

10. Proactively initiate discussions of investor concerns


Questions?



Thank-you

Date post:	28-Jul-2020
Category:	Documents
Upload:	others
View:	1 times
Download:	0 times

What HNWIs Expect in a New Era of Volatility Webcast_What H… · Hong Kong. Switzerland....

Documents