1. The future of wealth management: CFA institute and changing values in private wealth management
Bob Dannhauser, CFA
Head, Global Private Wealth Management
24 October 2017
CFA Society Victoria

2. Who did we speak to? 1.6 million data points 150,705 data points
CHARTERHOLDER
WEALTH PROFESSIONALS
PRIVATE CLIENT
892 respondents in total…
…of whom 688 were from the USA and 203 were from Canada
84% of the sample was male
Over half of respondents were aged between 35 and 54
476 were serving HNW clients (USD1 million+), while 384 were working with mass affluent clients
639,035 data points 4
478 respondents in total…
…of whom 315 were from the USA and 163 were from Canada 243 were serving HNW clients (USD1 million+), while 213 were working with mass affluent clients
150,705 data points
4000 mass affluent or HNW individuals took part…
… 2985 were wealth management clients, while 1015 were not
The median net worth of the sample was $2 million, reflecting the 2,802 HNW individuals who took part
76% of the sample was from the US, with the balance from Canada
833,025 data points
1.6 million data points

3. What advisers are thinking about
What do you view as the main challenges and priorities for your business?
Most advisors view the generational shift favourably and believe that building a differentiated proposition will be a critical opportunity for business growth. However, they remain concerned about how to navigate the evolutions in the context for doing business: from a market, competitor and recruitment standpoint.
Source: Charterholder survey

4. A large proportion of HNW and mass affluent clients stay with a retail proposition
Which of the following institutions is your PRIMARY wealth management firm?
HNW and mass affluent clients are very aligned in the firms that they turn to for wealth management.
Source: Private client survey

5. Charterholder qualities appear not to be effectively marketed to prospects
Which methods do you currently use to source new private clients? / If you required a new wealth management relationship, how would you source a suitable provider?
Charterholders overwhelmingly rely on a traditional strategy of client referrals to source new customers. The client response however, indicates that providing moments of engagement can be influential in the decision-making process.
Source: Charterholder survey, Wealth professionals survey, Private client survey

6. Personal engagement is the client experience champion
In each of the following areas, how would you rate your wealth management business’ ability to win private client assets?
Charterholders see the value in building engagement through relationships with clients.
Source: Charterholder survey

7. Practitioners do not realise the extent to which digital is core to their value
In each of the following pairs of statements, which sentence most closely aligns with your view about the core value of wealth management?
The client perspective is that wealth management is increasingly becoming about supporting tools, rather than professional expertise. The challenge for charterholders, will be to prove relevance in this new digital environment.
A core value of wealth management is the access to skilled professionals at any time
A core value of wealth management is the strength and breadth of the digital offering made available to the client
CFA Canadian (Under 35)
CFA Canadian (35-54)
CFA Canadian (55 and over)
Wealthy Canadian (Under 35)
Wealthy Canadian (35-54)
Wealthy Canadian (55 and over)
Source: Charterholder survey, Private client survey

8. All Wealthy Canadian Individuals
Clients expect their advisors to offer access to enhanced digital tools
How important to you is it that a wealth management firm offers a specific robo-advice capability?
Clients – and particularly younger clients – are increasingly calling for supporting digital tools to support their advisory relationships. As these new propositions take hold, questions over advisor value will need to be more substantiated.
All Wealthy Canadian Individuals
Source: Private client survey

9. Strategic expertise is paramount, but charterholders may be too specialized…
In your opinion, what levels of professional expertise are required in the following areas to be considered an effective private client advisor that will attract new business? / In your opinion, what levels of professional expertise are required in the following areas to be considered an effective wealth advisor?
Charterholder expertise is aligned to clients’ interests where they matter most, but their focus is not broad enough.
Source: Charterholder survey, Private client survey

10. … but those without the cfa charter may be underestimating required expertise
In your opinion, what levels of professional expertise are required in the following areas to be considered an effective private client advisor that will attract new business? / In your opinion, what levels of professional expertise are required in the following areas to be considered an effective wealth advisor?
Across every single product or solution area, wealth professionals without the CFA underestimate the expertise required to deliver an optimum service to clients.
Source: Wealth professionals survey, Private client survey

11. Most advisors are planning to build on their current expertise areas…
Which of these following expertise areas do you anticipate will become more important for private client advisors in the next five years?
Most advisors believe that continuing to prioritize expertise in financial planning, tax planning and inheritance planning will be important. Interestingly, older advisors are perhaps more visionary about future areas of focus for clients, such as philanthropic strategy, sustainable investing and management of family enterprises.
Source: Charterholder survey

12. … but many need to play catch-up with the wider wealth proposition
In your opinion, what levels of professional expertise are required in the following areas to be considered an effective private client advisor that will attract new business? Which of these following expertise areas do you anticipate will become more important for private client advisors in the next five years? In your opinion, what levels of professional expertise are required in the following areas to be considered an effective wealth advisor? / And which of these expertise areas do you think will be most important to you in the next five years?
Source: Charterholder survey

13. A majority of advisors are motivated by enjoying what they do
Please indicate which factors have the highest impact on your personal performance evaluation and compensation. What is your career priority?
A secondary concern is cultivating an optimum work/ life balance…
Source: Charterholder survey

14. what’s ahead from cfa institute
Content to keep practitioners on the leading edge of practice
Helping members succeed
Getting our messaging right

15. what’s ahead for the profession
consider how your offering matches the larger wealth management proposition
reconsider your differentiation and marketing strategy
think about digital strategically
@robdnn