Advisors overestimate how well they understand rich clients

Advisors are too confident about how well they understand younger wealthy clients, finds the World Wealth Report 2015, by Capgemini and RBC Wealth Management.

The survey says 76% of wealth managers saying they understand the needs of younger rich clients, while only 61% of clients agree.

Of wealthy North American clients, 82% were satisfied with their advisors overall.

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Pressure to transform

Further, pressure from ongoing industry issues, such as regulation, rising costs, and new entrants to the market, is significantly changing the traditional wealth manager role.

There is strong interest for automated advisory services in emerging markets such as Asia-Pacific, outside Japan, (76%) and in Latin America (70%). Wealthy North American clients had the lowest interest in automated services, at 34%. Younger clients are also nearly twice as inclined to use automated advisory services as older ones (67% vs. 38%). But are still underestimating client interest in these services, as only 20% of managers believe their clients are interested in them, compared to 49% of clients would consider using them.

Read: Help clients build better financial plans

Rich clients value traditional investment advice but their expectations for advisors are expanding to include a broader range of advice and support, leveraging the full value of their firms, to help clients achieve their life goals.

Advisors’ long-term success will depend on the ability to understand and address client needs, empower clients through education and dialogue, and embrace a wider spectrum of financial planning and wealth management advice and solutions. Technology will play a critical role by enabling wealth managers to respond to specific client demands with tailored financial planning and services to compete with emerging disruptive players more effectively.

The most successful firms will be those that empower wealth managers, invest in training and education, and support full financial planning based on the comprehensive needs of their clients.

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Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.