2021 year was a period of tremendous wealth accumulation around the world: recovering economies boosted by stock market gains pushed the global HNWI population and global wealth totals to grow by 7.8% and 8%, respectively.
Equity markets drive North American leadership in wealth and HNWI growth
North America continued its streak of highest HNWI population and wealth growth with 13.2% and 13.8% growth. A key contributor was the US, where a robust tech sector propelled powerful wealth performance, especially later in the year. Looking elsewhere around the globe, The Eurozone came in with next highest growth rates – 6.7% in HNWI population and 7.5% in wealth growth; as a result, growth rates in the Asia- Pacific region sat in third place, followed by the rest of the regions defined in our research.
And when looking at segments within the total HNWI population, Ultra-HNWIs led the wealth and population growth, despite a deceleration in growth rates in 2021 as compared to the earlier period.
HNWIs want new investment choices and better experiences
Globally, HNWIs maintained their traditional asset class status-quo in their 2021 asset allocations. However, they demonstrated measurable interest in emerging asset classes – especially ESG and digital – and vocalized their desire for better digital and personalized offerings from WM firms. Family offices witnessed increased demand from HNWIs due to better life-stage understanding and emotional connections.
New HNWI growth segments need focus
The rise of several new customer segments – millennials, women, tech-wealth, LGBTQ+ individuals, and the mass affluent – creates
enormous growth opportunities for WM firms. But to capture this growth, firms will need new business models and new and improved ways of delivering more personalized and responsive service, augmenting overall client experience (CX). Customized journeys across financial and personal lifetimes are critical to earning and keeping the trust and confidence of these emerging client segments.
Leverage technology and customer-centric strategy to achieve stronger engagement
Firms that leverage cloud, AI/ML, and digital technologies to strengthen their core and augment capabilities will be well-positioned to personalize client experiences across channels and products. Effective engagement across the customer lifecycle – from acquisition to retention – begins with a data ecosystem and adopting a digital-first strategy.
Client engagement is pivotal to delivering superior CX and boosting clients’ likelihood to recommend the WM firm and its products and services. And in another new development, WM firms are creating a Chief Customer Officer role that incorporates the skills of a customer strategist and engagement orchestrator to deliver on superior client engagement strategy, service performance, and heightened client experience expectations.
The world is moving quickly and despite wealth gains during 2021, multiple challenges, lie ahead. For success, it will be ever more important for WM firms to develop and implement a comprehensive four-dimensional engagement strategy to win, retain, and grow their client relationships:
• Embrace new business models to become a human-centric, customer-first organization.
• Build an inclusive ecosystem to capture emerging segment investors early in their life stages.
• Enhance advisor capabilities to boost producti- vity and deliver outstanding CX that clients will recommend.
• Adopt a one-stop-shop approach to build an ecosystem of offerings for HNWI clients.
