WEBVTT - How Do You Pick the Best Wealth Manager? 0:00:02.720 --> 0:00:18.240 Bloomberg Audio Studios, Podcasts, radio News. Welcome to Meren Talks 0:00:18.320 --> 0:00:21.240 Your Money, the personal finance edition of Merin Talks Money. 0:00:21.400 --> 0:00:23.880 In these bonus podcasts, we talk about the best strategies 0:00:23.880 --> 0:00:26.800 for making the most of your money. Now, this episode 0:00:26.840 --> 0:00:29.560 is slightly longer than usual. I'm speaking with Gareth Wilton, 0:00:29.680 --> 0:00:33.400 who's chief vice president at cap Gemini. They publish annually 0:00:33.440 --> 0:00:35.960 a World Wealth Report, which looked at where wealth is 0:00:36.000 --> 0:00:39.280 concentrated and where wealth is growing, why it's growing, and 0:00:39.320 --> 0:00:42.040 who's getting that money. Gareth, thank you so much for 0:00:42.120 --> 0:00:43.840 joining us today. We really appreciate it. 0:00:43.920 --> 0:00:45.640 Great to be a Maren. Thanks for invitation. 0:00:46.120 --> 0:00:48.800 Let's start by talking about this World Wealth Report. It's 0:00:48.800 --> 0:00:52.120 super interesting. It's jams all of fascinating findings. But tell 0:00:52.159 --> 0:00:53.800 me first, how is it put together? 0:00:54.320 --> 0:00:56.720 The cap Gemini World Wealth Report. This is actually the 0:00:56.760 --> 0:01:01.280 twenty ninth edition of this particular industry report that covers 0:01:01.360 --> 0:01:03.840 seventy one countries. When we look at the wealth management 0:01:03.920 --> 0:01:08.640 industry globally, we interview something like six and a half 0:01:08.640 --> 0:01:11.880 thousand high net worth individuals. We also talk to a 0:01:11.959 --> 0:01:15.440 number of wealth management executives across captureminised clients and other 0:01:15.560 --> 0:01:18.000 industry players as well as some of the kind of 0:01:18.040 --> 0:01:21.240 ecosystem by that I mean some of the technology companies 0:01:21.240 --> 0:01:24.280 that specifically support wealth management. And then we talk to 0:01:24.319 --> 0:01:27.760 some of the relationship managers. And again, relationship managers is 0:01:27.800 --> 0:01:30.600 one of the key rules that we talk about in 0:01:30.959 --> 0:01:33.880 our World Wealth Report twenty twenty five in terms of 0:01:34.000 --> 0:01:36.480 the role they have to play and the opportunity that 0:01:36.520 --> 0:01:38.160 is represented to them going forward. 0:01:38.959 --> 0:01:41.319 Okay, so let's start with these six and a half 0:01:41.319 --> 0:01:43.080 thousand people, and that's a lot of people to talk to. 0:01:43.319 --> 0:01:46.600 How are we defining high net worth ultra high networth? 0:01:46.640 --> 0:01:47.520 Who are these people? 0:01:48.240 --> 0:01:51.560 High net worth individual We look at them effectively in 0:01:51.680 --> 0:01:57.800 three classifications. So individuals who have investable assets over a 0:01:57.840 --> 0:02:01.680 million dollars and the millionaire next door marin that we 0:02:01.720 --> 0:02:05.240 all have, we have investible assets between one and five 0:02:05.280 --> 0:02:09.880 million dollars. The next category up, which we call mid 0:02:09.919 --> 0:02:14.240 tier millionaires, is between five and thirty million, and then 0:02:14.320 --> 0:02:17.040 you get into the ultra high net worth individuals with 0:02:17.160 --> 0:02:22.440 investible assets of greater than thirty million US dollars. Fundamentally, 0:02:23.000 --> 0:02:25.880 if you're above a million dollars, you're included in our 0:02:25.960 --> 0:02:27.960 high networth individual discussion. 0:02:28.360 --> 0:02:33.919 And investible assets is liquid cash, so that doesn't include property. 0:02:34.200 --> 0:02:38.440 It doesn't include property, It covers investments that individuals have. 0:02:38.919 --> 0:02:43.280 It obviously includes cash. It obviously includes some crypto currency, 0:02:43.280 --> 0:02:44.839 which is an increasing consideration. 0:02:45.360 --> 0:02:49.639 Okay, you interviewed six and a half thousand. How many 0:02:50.040 --> 0:02:53.679 of these people are there across the board? What percentage 0:02:54.200 --> 0:02:57.640 of the population falls into this bit. 0:02:58.320 --> 0:03:04.359 When we look at high network individuals three categorizations, something 0:03:04.840 --> 0:03:09.560 like two point six percent of the world's population falls 0:03:09.600 --> 0:03:13.760 into this categorization. It does vary by geography. We've seen 0:03:13.960 --> 0:03:16.359 how that variation has evolved because, as I say, we've 0:03:16.360 --> 0:03:19.280 done this report for multiple years, and when we look 0:03:19.320 --> 0:03:23.160 at that two point six percent, six point two fall 0:03:23.240 --> 0:03:26.680 into that ultra high net worth. So six point two 0:03:26.720 --> 0:03:29.760 percent of the two point six percent have had investible 0:03:29.760 --> 0:03:32.520 assets of greater than thirty million dollars. 0:03:32.800 --> 0:03:36.280 Okay, And the richest populations are going to be, presumably 0:03:36.600 --> 0:03:38.360 in the US, where it's not going to be two 0:03:38.360 --> 0:03:40.800 point six percent, it's going to be very significantly higher. 0:03:41.400 --> 0:03:42.920 It is, and when we look at it, when we 0:03:42.920 --> 0:03:46.320 look at the population within North America, seven point three, 0:03:46.920 --> 0:03:50.240 so seven point three percent fall into this high net 0:03:50.280 --> 0:03:53.480 worth individual we look in Asia, it's something like two 0:03:53.520 --> 0:03:56.520 point seven, and we look at Europe it's two point one. 0:03:57.400 --> 0:03:59.160 Can you break that out for the UK at all? 0:04:00.120 --> 0:04:03.080 Not specifically the point I want to make here marinaction, 0:04:03.160 --> 0:04:07.320 let me just clarify that those figures in terms of 0:04:07.400 --> 0:04:09.840 population are in terms of growth. 0:04:10.000 --> 0:04:10.480 Okay. 0:04:10.840 --> 0:04:13.880 So when we look at North America, there's seven point 0:04:13.920 --> 0:04:17.599 three percent growth in terms of the high net worth 0:04:17.680 --> 0:04:21.960 individual population. Within Asia Pacific, it's two point seven percent 0:04:22.000 --> 0:04:25.520 growth when we compare twenty four to twenty three, and 0:04:25.640 --> 0:04:29.440 actually in the UK it's two point one percent decline. 0:04:29.800 --> 0:04:32.200 So we've seen a decline in terms of this high 0:04:32.279 --> 0:04:35.160 net worth individual population here in the UK for many 0:04:35.200 --> 0:04:38.000 of the reasons that you would expect. When we look 0:04:38.040 --> 0:04:41.320 at twenty twenty four, it's a year, but North America 0:04:41.400 --> 0:04:46.599 is growing apex growing Europe and the UK we've seen 0:04:46.640 --> 0:04:47.200 a decline. 0:04:47.400 --> 0:04:49.080 Okay, so I decline in Europe as well. 0:04:49.760 --> 0:04:51.279 Yeah, indeed, I know you said. 0:04:51.080 --> 0:04:52.480 You all know the reasons for this, but would you 0:04:52.560 --> 0:04:54.360 run us through them so we can just feel miserable 0:04:54.360 --> 0:04:55.320 about them all over again. 0:04:55.960 --> 0:04:57.920 We've seen a fall in terms of the kind of 0:04:57.920 --> 0:05:03.080 return on equity investments and fundamentally the stock market that 0:05:03.200 --> 0:05:07.680 was obviously contributed. We've seen declines in some of the 0:05:07.839 --> 0:05:11.400 investments with regard to private equity, and all of. 0:05:11.320 --> 0:05:13.960 This has contributed to this reduction. 0:05:14.600 --> 0:05:16.920 Okay, interesting, I thought you were going to say that 0:05:16.440 --> 0:05:19.880 that number was falling because people were leaving the UK 0:05:20.120 --> 0:05:22.680 and the EU and taking their investable assets with them 0:05:22.720 --> 0:05:24.480 to go else well, and we've seen a lot of talk, 0:05:24.520 --> 0:05:27.359 for example, about the well of leaving the UK for 0:05:27.400 --> 0:05:30.520 tax reasons. So I'm surprised that you put it down 0:05:30.600 --> 0:05:35.200 to falling returns from their investments, not to actual departures. 0:05:35.600 --> 0:05:38.640 Your point is valid, Marin in terms of the kind 0:05:38.680 --> 0:05:43.799 of globalization of this particular segment of the society. They're 0:05:43.800 --> 0:05:49.799 definitely looking at opportunities to invest globally. They're certainly looking 0:05:49.839 --> 0:05:53.839 at some of the benefits of tax jurisdictions outside. 0:05:53.400 --> 0:05:54.440 Their domestic market. 0:05:54.880 --> 0:05:58.600 In our report this year, we've seen growth in locations 0:05:58.640 --> 0:06:02.560 like Singapore. We've seen growth in locations like Hong Kong, 0:06:03.080 --> 0:06:06.600 the BI seems to be a well known location for 0:06:06.839 --> 0:06:10.520 the relocation of wealth, but also Saudi Arabia. 0:06:10.960 --> 0:06:12.600 We should say, just to be clear, although I think 0:06:12.600 --> 0:06:15.479 probably is clear that this is last year's information, and 0:06:15.520 --> 0:06:17.480 obviously there's been a big change in the way the 0:06:17.520 --> 0:06:19.240 markets have moved so far this. 0:06:19.200 --> 0:06:22.000 Year twenty four versus twenty three. The shift here is 0:06:22.000 --> 0:06:23.320 based on the twenty four data. 0:06:23.720 --> 0:06:26.760 Okay, let's talk about the main theme and one of 0:06:26.760 --> 0:06:29.000 the big themes of this year's report, which is all 0:06:29.000 --> 0:06:31.839 about the great wealth transfer. The number that you put 0:06:31.920 --> 0:06:34.280 in there is there'll be a wealth transfer of eighty 0:06:34.400 --> 0:06:38.000 three point five trillion dollars to a new generation of 0:06:38.040 --> 0:06:41.600 investors or rich people, whatever related called by twenty forty eight. 0:06:41.600 --> 0:06:42.960 And that's that's real money. 0:06:43.520 --> 0:06:46.599 Is a huge shift in wealth from one generation to 0:06:46.640 --> 0:06:51.000 the next, eighty three point five trillion dollars by twenty 0:06:51.040 --> 0:06:54.279 forty eight. Now that twenty forty eight signs a long 0:06:54.279 --> 0:06:56.400 way away, Maren. But actually, when you look at the 0:06:56.400 --> 0:06:59.640 short term, thirty percent of that wealth will actually transfer 0:06:59.720 --> 0:07:03.240 before twenty thirty over the next five years, and a 0:07:03.320 --> 0:07:06.800 further sort of thirty percent transition before twenty thirty five. 0:07:06.880 --> 0:07:10.160 So it's a big number, but it also is an 0:07:10.200 --> 0:07:14.360 imminent consideration for the individuals, obviously, particularly if you're about 0:07:14.400 --> 0:07:17.320 to receive or inherit that wealth. But also it's an 0:07:17.320 --> 0:07:23.440 important consideration for the wealth management organizations in terms of effectively, 0:07:23.880 --> 0:07:28.000 how do they mean relevant to their client's kids generation 0:07:28.280 --> 0:07:30.280 in a way that they've being relevant to their to 0:07:30.320 --> 0:07:31.200 the parents' generation. 0:07:31.720 --> 0:07:34.040 Yeah, And one of the interesting things about this is 0:07:34.080 --> 0:07:37.000 the extent to which that wealth, as it's passed down, 0:07:37.520 --> 0:07:40.640 stays in the market and the extent of which it 0:07:40.720 --> 0:07:44.680 is removed for living costs, particularly down at the lower end. Right, 0:07:44.760 --> 0:07:46.800 do you inherit a million dollars or two million dollars 0:07:46.840 --> 0:07:48.680 and you're in your thirties or forties, what are you 0:07:48.720 --> 0:07:50.280 going to do? You're probably going to buy a house 0:07:50.720 --> 0:07:52.800 and maybe paid for school fees, that kind of thing. 0:07:52.840 --> 0:07:56.760 So there is this dynamic where you can't necessarily expect 0:07:56.880 --> 0:08:00.160 that eighty three point five trillion to hang around in 0:08:00.240 --> 0:08:03.280 stock markets and private equity and crypto exactly. You can 0:08:03.320 --> 0:08:07.240 expect it to be taken out for living on dadlie, that. 0:08:07.240 --> 0:08:07.920 Will be the case. 0:08:08.040 --> 0:08:13.680 I think everybody's situation is fundamentally different. However, when we 0:08:13.840 --> 0:08:18.320 look at the gen X to those of us who 0:08:18.320 --> 0:08:21.360 are between there are forty four and fifty nine years 0:08:21.400 --> 0:08:24.320 of age, we have one perception in terms of what 0:08:24.360 --> 0:08:28.000 that inheritance will mean. The millennials the famous millennials who 0:08:28.040 --> 0:08:30.400 are all sort of between their late twenties and early 0:08:30.440 --> 0:08:33.320 forties in twenty twenty five have a different outlook and 0:08:33.360 --> 0:08:37.679 to your point, is very relevant, and Maren, that's where property. 0:08:37.400 --> 0:08:39.360 School fees, lifestyle will be. 0:08:39.760 --> 0:08:42.240 And then you have Gen Z's, which are really only 0:08:42.600 --> 0:08:44.480 teenagers in their early twenties. 0:08:44.800 --> 0:08:46.880 But there also will be a recipient for this wealth. 0:08:46.920 --> 0:08:49.240 So I think we'll see different behaviors depending on the 0:08:49.320 --> 0:08:53.439 generations and obviously by individual, but fundamentally the point we're 0:08:53.480 --> 0:08:58.920 making here is how can the wealth management industry take 0:08:58.960 --> 0:09:02.640 advantage of this transfer but also mitigate the risk that 0:09:02.679 --> 0:09:06.840 it represents because there's a chance that the wealth management 0:09:06.880 --> 0:09:08.920 firms will lose some of those assets. 0:09:09.360 --> 0:09:12.559 Let's put the decumulation point aside for the moment. The 0:09:12.640 --> 0:09:16.280 secondivetic thing, as you say, is this idea that it's 0:09:16.280 --> 0:09:19.600 something of a threat to the wealth management business, partly 0:09:19.640 --> 0:09:22.320 in terms of that flow out, but also in terms 0:09:22.360 --> 0:09:25.280 of the different expectations and needs that the younger generation 0:09:25.360 --> 0:09:28.679 will have. One of the terrifying statistics for wealth management 0:09:28.679 --> 0:09:30.880 companies the put in this report is it eighty one 0:09:30.880 --> 0:09:33.760 percent of those who inherit a likely to shift wealth 0:09:33.800 --> 0:09:36.000 management company within one or two years. Can it really 0:09:36.000 --> 0:09:39.120 be that much? Can people really be that non apathetic? 0:09:39.640 --> 0:09:42.280 I think they can, and that statistics definitely support that 0:09:42.400 --> 0:09:45.120 potential risk. Now, of course, there's things that we can 0:09:45.160 --> 0:09:47.840 all do to mitigate that. You know, do we really 0:09:47.960 --> 0:09:53.120 understand what the inheriting generations want to achieve in terms 0:09:53.120 --> 0:09:55.840 of their objectives? And as I say, the baby boomers 0:09:55.880 --> 0:09:57.840 have somewhat been in a little bit of a wealth 0:09:57.880 --> 0:10:02.560 preservation mindset. I think when we look forward into the millennials, 0:10:02.679 --> 0:10:05.679 it's all about long term growth and that's where some 0:10:05.760 --> 0:10:08.960 of these maybe higher risk assets come into the frame. 0:10:09.400 --> 0:10:14.000 We've talked about cryptocurrencies, We've talked about private equity, you know, 0:10:14.320 --> 0:10:18.560 a movement towards some of these types of investments in 0:10:18.600 --> 0:10:23.480 a portfolio potential consideration. I think this global diversification. I 0:10:23.480 --> 0:10:26.719 think future generations will look at the world in its 0:10:26.880 --> 0:10:30.080 entirety and think, well, quite franky. If they want to 0:10:30.120 --> 0:10:32.840 invest in markets in Asia, they want to invest in 0:10:32.960 --> 0:10:34.880 censors like Singapore, then. 0:10:34.760 --> 0:10:36.400 Again much more open to do so. 0:10:37.080 --> 0:10:40.960 And then thirdly, I think that nature of the services. 0:10:41.360 --> 0:10:43.880 I think our senses and the report very clearly draws 0:10:43.920 --> 0:10:50.360 out that concanerge services, trust planning, property management are willingness 0:10:50.360 --> 0:10:53.320 to have a more encompassing relationship that's not just purely 0:10:53.360 --> 0:10:57.000 based on the scale of your wealth and the growth 0:10:57.040 --> 0:11:00.360 of that particular portfolio, but with a set of cervices 0:11:00.400 --> 0:11:03.440 are wrong that really contribute to a lifestyle. Our report 0:11:03.520 --> 0:11:07.160 draws out that this idea of luxury, certainly for those 0:11:07.200 --> 0:11:11.200 high networth individuals, is becoming an increase in consideration in 0:11:11.280 --> 0:11:13.800 terms of where they spend their wealth. How can the 0:11:13.800 --> 0:11:18.520 wealth management firms bring some of those lifestyle concierge support 0:11:18.720 --> 0:11:21.679 services to bear to make sure that they're bringing that 0:11:22.240 --> 0:11:25.280 all encompassing relationship for the future generations. 0:11:25.760 --> 0:11:28.920 Okay, let's go back a bit to this idea of 0:11:29.000 --> 0:11:33.320 that young wanting a different class of assets and risk 0:11:33.400 --> 0:11:38.120 a class of assets. So crypto okay, private equity. I 0:11:38.160 --> 0:11:41.800 mean again, there's a rising evidence that in fact, private 0:11:41.840 --> 0:11:44.880 equity is not a higher return asset class at all. 0:11:45.040 --> 0:11:47.719 As we say these days, it's not magic, it's debt, right, 0:11:48.120 --> 0:11:50.640 And as interest rates rise, and we've seen over the 0:11:50.679 --> 0:11:53.200 last couple of years, it's huge difficulty that private equity 0:11:53.360 --> 0:11:57.120 companies are having and exiting any of their positions. So 0:11:57.280 --> 0:12:00.520 it's possible that private equity may not be one of 0:12:00.559 --> 0:12:04.040 the asset classes that the young end up looking at. 0:12:04.160 --> 0:12:06.280 But I'm really interested in the idea that they might 0:12:06.800 --> 0:12:10.720 want to invest in a more global way, because we 0:12:10.920 --> 0:12:13.400 have had over the last couple of decades, even global 0:12:13.440 --> 0:12:17.400 has meant the US right in the six seventy percent 0:12:17.440 --> 0:12:20.520 of world industries are still America. So even if people 0:12:20.559 --> 0:12:23.440 say I want to be globally diversified, they still end 0:12:23.520 --> 0:12:26.199 up basically invested in the US and more or less 0:12:26.240 --> 0:12:28.920 invested in those top tech companies. But you think that 0:12:28.960 --> 0:12:31.840 over the next couple of decades we'll see a shift 0:12:32.480 --> 0:12:35.600 driven by people genuinely wanting to be more international. 0:12:36.320 --> 0:12:37.240 Yeah, yeah, we do. 0:12:37.440 --> 0:12:42.200 It's partly driven by some of those favorable tax regimes, 0:12:42.360 --> 0:12:49.400 but also the access to those particular sort of financial ecosystems, 0:12:49.920 --> 0:12:56.760 the stability political stability within those particular regions are all considerations. 0:12:57.000 --> 0:12:59.560 But I think when I look at the long term benefits, 0:13:00.000 --> 0:13:01.320 I'm going to bring you back to your point by 0:13:01.400 --> 0:13:03.400 private equity, I think when you look at private equity 0:13:03.440 --> 0:13:06.440 in the long term, it's a very valid options, as 0:13:06.480 --> 0:13:09.560 with crypto, as with the kind of globalization piece. 0:13:09.800 --> 0:13:11.360 Yeah, I have to have to stop you there. I've 0:13:11.360 --> 0:13:13.840 got to stop you there because first, on private equity, 0:13:13.840 --> 0:13:16.360 there is no real long term because the scale of 0:13:16.400 --> 0:13:19.960 it has only relatively recent, right, so we don't know yet. 0:13:20.320 --> 0:13:21.920 I'll give you that if you look at the numbers 0:13:21.920 --> 0:13:24.560 of the private equity industry, gives you it looks like 0:13:24.840 --> 0:13:27.400 maybe this outperforms over the long term. But this is 0:13:27.440 --> 0:13:30.880 a tiny industry until relatively recently. It's only become a 0:13:30.960 --> 0:13:33.959 giant industry during the low interest rate period. We have 0:13:34.080 --> 0:13:39.120 no idea how at this scale it will perform in 0:13:39.160 --> 0:13:41.000 a higher interest rate environment. So I'm not giving you 0:13:41.000 --> 0:13:44.160 that one Cryptocurrency again, I can't give you that because 0:13:44.200 --> 0:13:46.760 there is no long term. We have no idea. There 0:13:46.840 --> 0:13:48.680 is no long term. We only have the short term here. 0:13:49.000 --> 0:13:51.880 We can only guess about the future, right Which doesn't 0:13:51.920 --> 0:13:54.079 mean that if you have a high risk appetite, shouldn't 0:13:54.080 --> 0:13:55.600 be in it. But no one can tell you that 0:13:55.640 --> 0:13:58.360 cryptocurrency has a great long term performance record because there 0:13:58.440 --> 0:14:00.960 is no long term, right Nless, your definition of long 0:14:01.000 --> 0:14:01.920 term is different to mine. 0:14:02.360 --> 0:14:04.760 I'm not going to argue with you on that point. 0:14:04.920 --> 0:14:09.520 We're seeing organizations invest Goldman Sachs to give an example. 0:14:09.840 --> 0:14:14.079 You know, they have their GMFRA product proposition, which is. 0:14:14.120 --> 0:14:17.640 Enabling that b N Y melan. They have what they call. 0:14:17.520 --> 0:14:19.840 All bridge, which is looking at what we talk talk 0:14:19.880 --> 0:14:21.440 about alternative investments. 0:14:21.680 --> 0:14:23.120 So as I say, we. 0:14:23.120 --> 0:14:25.720 Can argue the pros and cons, but ultimately I think 0:14:25.760 --> 0:14:29.240 as an industry, I think my key point is important 0:14:29.280 --> 0:14:33.520 to be cognizant of those those alternative investments and our 0:14:33.560 --> 0:14:36.600 sense of capt geminis those will be more relevant going forward, 0:14:37.040 --> 0:14:42.400 and I think the regulation of those particular products, you know, 0:14:42.560 --> 0:14:48.080 crypto as an example, I suppose they're also increasing let's 0:14:48.120 --> 0:14:51.440 just say the acceptance of the opportunity they represent. 0:14:51.840 --> 0:14:53.840 Let's go back to crypto because I get in a 0:14:53.920 --> 0:14:56.560 lot of trouble from the bitcoin bros all the time 0:14:56.640 --> 0:14:59.960 about confusing bitcoin and crypto because they're different things. Right, 0:15:00.200 --> 0:15:02.960 So when you say crypto and you say that the 0:15:03.000 --> 0:15:05.320 young or the younger generations would like to include crypto 0:15:05.360 --> 0:15:08.040 as an asset class inside their portfolios, what do you mean. 0:15:08.280 --> 0:15:11.680 Anything that qualifies as a digital asset, Maren, including bitcoin? 0:15:12.080 --> 0:15:14.200 Can I just interrupt to give my usal message was 0:15:14.280 --> 0:15:16.240 if any of you would like to send hate mail 0:15:16.360 --> 0:15:20.360 about the differentiation between crypto or bitcoin, NFTs, etcetera. Please 0:15:20.400 --> 0:15:22.120 can you send them direct to Gareth. I'll give you 0:15:22.120 --> 0:15:23.440 his contact details at the end. 0:15:23.920 --> 0:15:25.320 Thank you, thank you, My. 0:15:25.400 --> 0:15:26.400 Pleasure, My pleasure. 0:15:26.800 --> 0:15:28.800 Get enough everyone, Everyone should share the. 0:15:28.800 --> 0:15:30.880 Joy exactly exactly. 0:15:31.080 --> 0:15:35.280 I think fifty six percent fifty percent of gen zd's 0:15:36.160 --> 0:15:42.760 and millennials view alternative investments as a valid part of 0:15:42.800 --> 0:15:43.560 their portfolio. 0:15:44.240 --> 0:15:48.160 Alternative investments, we're putting crypto, we're putting private equity. What 0:15:48.200 --> 0:15:49.360 else are we putting. 0:15:49.720 --> 0:15:51.880 ETFs for example? Yeah? 0:15:51.960 --> 0:15:53.920 Yeah, yeah, is that alternative? 0:15:54.040 --> 0:15:56.800 Depends on the product type? Yeah, yeah, all right. 0:15:57.360 --> 0:16:02.840 The other thing about the future generations is the digital 0:16:02.840 --> 0:16:06.320 experience very much moving away probably from the classic face 0:16:06.360 --> 0:16:08.520 to face. When you look at the millennials, they really 0:16:08.560 --> 0:16:14.160 want the mobile interface. They want personalization. So they want 0:16:14.280 --> 0:16:16.320 us to use their data. When I say us, the 0:16:16.400 --> 0:16:19.400 banking industry, the wealth management industry, they want us to 0:16:19.440 --> 0:16:23.080 use their data to bring proactive propositions that are relevant 0:16:23.120 --> 0:16:27.240 to their investment strategy. And fundamentally, they probably also want 0:16:27.280 --> 0:16:30.360 to see only for these high network of individuals their 0:16:30.400 --> 0:16:32.600 extensive wealth in one place. 0:16:33.120 --> 0:16:35.760 Yeah, and I'm really interested in this idea that a 0:16:35.840 --> 0:16:39.800 wealth manager should also provide a sort of luxury concierge 0:16:39.920 --> 0:16:47.760 service that does travel and does bespoken experiences, education, medical, cybersecurity, 0:16:48.080 --> 0:16:51.160 all these things in a wanna that would love. That 0:16:51.280 --> 0:16:53.880 sounds great. Do you think that the next generation has 0:16:54.080 --> 0:16:58.480 different expectations of how they will spend to the current generation. 0:16:58.600 --> 0:17:00.440 And one of the things that we've talked but again 0:17:00.520 --> 0:17:02.600 quite a lot on the podcast, is the way, particularly 0:17:02.640 --> 0:17:05.280 in travel and people with a much lower level of 0:17:05.280 --> 0:17:10.200 wealth than the luxury travel industry previously have expected are 0:17:10.240 --> 0:17:13.080 spending very large amounts of money on luxury travel. 0:17:13.960 --> 0:17:15.440 I think it's the experienced generation. 0:17:15.560 --> 0:17:20.440 I think, I think fundamentally and with this this segment, 0:17:20.800 --> 0:17:24.959 next generation high networth individuals, it probably just amplifies that Meren. 0:17:25.080 --> 0:17:29.640 You know, travel experience, passion. You know, we talk about 0:17:29.640 --> 0:17:33.199 passion investments. I can see you look steering. 0:17:33.960 --> 0:17:36.680 It's not physical, it's a snare. 0:17:37.520 --> 0:17:43.600 But you know, art art wine cars. And again in 0:17:44.000 --> 0:17:46.600 our cap Gemini report last year, we talked about the 0:17:46.680 --> 0:17:47.720 roll of the family offers. 0:17:48.000 --> 0:17:49.360 This is an extension merin in. 0:17:49.359 --> 0:17:53.359 Terms of bringing some of those non financial services to 0:17:53.400 --> 0:17:56.400 bear in a way that I see is very much 0:17:56.440 --> 0:18:01.280 in line with the client expectations and their desire for experiences. 0:18:01.760 --> 0:18:04.679 Yeah, I guess that what I object to slightly is 0:18:04.720 --> 0:18:07.040 idea that something is a passion investment. I kind of 0:18:07.040 --> 0:18:11.080 feel either it's a passion or it's an investment confusing too, 0:18:11.119 --> 0:18:14.480 and it's a root to low returns or disaster. So listen, 0:18:14.520 --> 0:18:16.840 here's the real question for you. Right, we have a 0:18:16.840 --> 0:18:19.199 lot of listeners out there. Maybe they're going to inherit, 0:18:19.320 --> 0:18:21.160 maybe they're not. Maybe they already have money or whatever, 0:18:21.200 --> 0:18:23.359 and they're sitting listening to this and they're thinking themselves, 0:18:23.359 --> 0:18:25.159 do you know what, Why haven't I got a wealth manager? 0:18:25.200 --> 0:18:27.240 I should have a wealth manager. This is what I need. 0:18:27.440 --> 0:18:29.720 And maybe they're inheriting. They're thinking, I don't want my 0:18:29.760 --> 0:18:31.919 mum and dad's wealth manager. I never liked them anyway. 0:18:32.000 --> 0:18:35.080 Fusty old people, pursuits, ties, blasts, lunch at Christmas. Don't 0:18:35.080 --> 0:18:38.520 want any of that nonsense. How do you look for 0:18:38.560 --> 0:18:41.280 a wealth manager? What are the main things that you 0:18:41.280 --> 0:18:43.359 should be looking for when you go out trying to 0:18:43.400 --> 0:18:46.720 find somebody to do exactly this, not just run your money, 0:18:46.880 --> 0:18:50.640 but effectively manage your long term, long term income and lifestyle. 0:18:50.680 --> 0:18:51.479 What are we looking for? 0:18:52.520 --> 0:18:55.600 Really, really good question. I'll probably think about it in 0:18:55.640 --> 0:18:56.360 three ways. 0:18:57.119 --> 0:19:01.680 I think, first and foremost, a wealth manager or wealth 0:19:01.720 --> 0:19:10.280 management organization that fundamentally understands your aspirations, so I think 0:19:10.480 --> 0:19:13.600 they have to be one hundred percent aligned with what 0:19:13.640 --> 0:19:15.960 you want to achieve. I think the second thing I 0:19:16.000 --> 0:19:19.960 would say, Marin is I think a wealth manager that 0:19:20.040 --> 0:19:24.600 gives you access to the breadth of products, services, and 0:19:24.640 --> 0:19:28.600 experiences you're looking for for you and your family. And 0:19:28.640 --> 0:19:31.040 then finally, I think with anything in life, there has 0:19:31.080 --> 0:19:34.760 to be a degree of chemistry. I think fundamentally having 0:19:34.760 --> 0:19:39.480 a very real time relationship that's supported by digital and 0:19:39.520 --> 0:19:42.399 we've talked about this demand for a digital platform, but 0:19:42.600 --> 0:19:47.879 also that's enabled through a relationship because fundamentally we're talking 0:19:47.880 --> 0:19:52.800 about the very important conversations for you as an individual 0:19:52.880 --> 0:19:55.399 and your and your future and your family's future. 0:19:55.800 --> 0:19:59.680 Okay, and crucially, what should I pay and how should 0:19:59.720 --> 0:20:02.120 I pay? Is there been any shift in the charging 0:20:02.280 --> 0:20:04.840 structure for wealth management or are we still just going 0:20:04.880 --> 0:20:07.840 to pay one percent advalareum forever one and a half 0:20:07.840 --> 0:20:09.240 whatever it is depending on my eiger. 0:20:09.880 --> 0:20:14.280 Obviously it varies very much by organization. Don't comment on 0:20:14.440 --> 0:20:18.480 the kind of pricing models for specifics. But again, I 0:20:18.520 --> 0:20:21.800 would say, in a world where we're looking to achieve 0:20:21.840 --> 0:20:28.200 outcomes and experiences, why not link the investment to those outcomes, 0:20:28.240 --> 0:20:30.200 and that will be as a client, that will be 0:20:30.240 --> 0:20:32.160 the angle that I would always be looking to take 0:20:32.200 --> 0:20:35.240 in terms of how can we get some surety in 0:20:35.320 --> 0:20:37.960 terms of the long term investment and how can we 0:20:38.040 --> 0:20:40.840 link fees, costs, et cetera on that. 0:20:40.840 --> 0:20:43.880 Basis, So you would suggest that people find a way 0:20:43.960 --> 0:20:45.840 to link what they pay to the performance of the 0:20:45.880 --> 0:20:47.840 assets that they left for the wealth manager rather than 0:20:47.880 --> 0:20:48.919 pay a flat advalorem. 0:20:49.359 --> 0:20:52.920 I think if you're able to make sure that all 0:20:52.960 --> 0:20:55.320 aspects of the kind of investment are aligned to the 0:20:55.840 --> 0:20:57.960 to the ultimately ams, that would be that for me 0:20:58.000 --> 0:21:01.359 would be a preferable model. The relationship manager model as well. 0:21:01.560 --> 0:21:01.919 Maren. 0:21:02.080 --> 0:21:05.200 Let's just think about that, because the other dynamic we're 0:21:05.240 --> 0:21:09.560 seeing here is relationship managers are also considering their long 0:21:09.640 --> 0:21:13.200 term future. You know, many of them are approaching retirement age. 0:21:13.320 --> 0:21:16.000 You know, we've seen a significant proportion of relationship managers 0:21:16.000 --> 0:21:18.719 that will leave the industry. So there's quite a lot 0:21:18.720 --> 0:21:22.199 of volatility in terms of the relationship manage your community 0:21:22.280 --> 0:21:25.240 as well. So again This is another consideration for the 0:21:25.600 --> 0:21:29.040 wealth management organizations. How do they retain and grow that 0:21:29.119 --> 0:21:33.320 talent that also evolves with their client base. 0:21:33.840 --> 0:21:36.679 How has it happened that the relationship managers in this 0:21:36.720 --> 0:21:40.480 business have not recruited at a younger age? Why have 0:21:40.520 --> 0:21:41.760 we got an aging industry? 0:21:42.320 --> 0:21:45.359 I think undoubtedly they are, But the key challenge is 0:21:46.280 --> 0:21:51.000 can you retain and excite that talent, give them the 0:21:51.040 --> 0:21:55.439