Client-centric strategies will help Asia-Pacific (APAC) wealth managers to capture a share of the US$200billion global revenue opportunity, according to Ernst & Young's 2016 global wealth management report.
These managers will also need to navigate diverse practices and balance disparate regulatory and tax policies to tap this revenue source.
The top drivers of client experience in Singapore are investment performance (67 percent); understanding of financial goals (35 percent); and transparency in fees and portfolio management (34 percent).
Singapore clients also want fee transparency as presently they are being charged based on transactions (42 percent), with a smaller proportion on a fixed fee (13 percent).
However, in their preferred fee structure, these clients want a fixed or annual structure.
"Singapore clients are becoming more savvy about fees. They want to know what they are paying for and seek clarity in fees. As such, it is not surprisingly that they are turning to digital channels and automated advice, where demands of meeting financial goals can be met with a better customer experience and clear explanation of the fees being paid," said Mark Wightman, partner, Wealth & Asset Management, Ernst & Young Advisory Pte. Ltd.
Dealing with regulatory compliance
Findings of the report indicates APAC to have the highest percentage (15 percent) of clients with relationships at more than five wealth management firms.
However, wealth managers in APAC are still bogged down in regulatory compliance, with managers expecting to invest 42 percent of their strategic budgets on regulatory compliance.
Wealth managers in APAC are also facing tremendous pressure from new competitors that are driving fees down.
More than half (57 percent) of APAC managers expect personal interactions with clients to remain their primary channel, compared with just 32 percent of clients whose preferences are instead shifting to digital.
None of the APAC firms rated their social media footprint as effective with 70 percent rating it as ineffective or very ineffective.
"More than 60 percent of APAC clients consider transparency in fees and performance critical to trusting their wealth manager, more than 30 percent would like to rate their advisor and 50 percent would like to share their experience with peers," added Wightman. "Our findings provide a clear road map for those managers that want to differentiate on experience and capture market share."
Sign up for CIO Asia eNewsletters.