WEBVTT - The Rich Are Getting Richer: What Do They Want From Wealth Managers? 0:00:02.720 --> 0:00:07.240 Bloomberg Audio Studios, Podcasts, Radio News. 0:00:16.400 --> 0:00:18.799 Welcome to Marin Talks to Your Money, the personal finance 0:00:18.920 --> 0:00:22.119 edition of Merin Talks Money. In these bonus podcasts, we 0:00:22.160 --> 0:00:24.240 talk about the best strategies for making the most of 0:00:24.320 --> 0:00:27.440 your money. I'm Merinsum, Supweb Editor at Last for Bloomberg 0:00:27.720 --> 0:00:32.680 UK Money. So this week we are talking about who 0:00:32.800 --> 0:00:36.599 is getting wealthier and where and how those people are 0:00:36.680 --> 0:00:40.480 reshaping the wealth management industry. What do they want from 0:00:40.479 --> 0:00:43.400 their management teams that they didn't want a decade ago? 0:00:43.640 --> 0:00:46.360 To talk about it, we've provided on Gareth Wilson, global 0:00:46.400 --> 0:00:50.280 banking industry leader and executive vice president of IT services 0:00:50.280 --> 0:00:53.920 and consulting group cap Gemini. Cap Gemini recently released its 0:00:53.960 --> 0:00:56.800 thirty years edition of the Institute's World Wealth Report. We 0:00:56.840 --> 0:00:59.280 talk about the growing appealab alternative as it's the folks 0:00:59.320 --> 0:01:02.279 on diversify portfolios. Stick around to hear more about this 0:01:02.520 --> 0:01:04.880 and about whether what you want from your wealth manager 0:01:05.200 --> 0:01:11.000 is excellent returns or empathy. Garrett, thanks for joining us today. 0:01:11.440 --> 0:01:13.800 Thank you, Maren. Great to be on Marin Talks Money. 0:01:14.360 --> 0:01:16.880 Right now, we are talking about rich people and very 0:01:16.959 --> 0:01:19.080 rich people. So before we start, because what we're going 0:01:19.120 --> 0:01:20.640 to do in this podcast, are going to talk a 0:01:20.680 --> 0:01:24.200 lot about high network people and ultra high network people. 0:01:24.240 --> 0:01:27.319 So can we just start by defining what we're talking about. 0:01:27.920 --> 0:01:29.800 Who is a high network person? What do you need 0:01:29.840 --> 0:01:32.000 to have to be referenced in this report? 0:01:32.760 --> 0:01:37.040 So, high net worth individual is an individual who has 0:01:37.160 --> 0:01:41.480 investible assets that's greater than a million dollars maren. 0:01:41.360 --> 0:01:44.400 Okay, and investable assets is everything's of your house. 0:01:44.680 --> 0:01:47.039 Everything except your house, everything except your house. And if 0:01:47.080 --> 0:01:49.920 you've got if you've got investible assets between one and 0:01:50.000 --> 0:01:52.880 five million, uh huh, we refer to you as a millionaire. 0:01:52.920 --> 0:01:56.640 Next door, if you've got assets between five and thirty, 0:01:57.200 --> 0:02:00.200 we talk about you as a mid tier millionaire. And 0:02:00.240 --> 0:02:03.720 then for the bracket of individuals who have assets and 0:02:03.840 --> 0:02:08.560 vestable assets of greater than thirty million dollars, high networth individuals. 0:02:08.240 --> 0:02:09.960 Okay, hang on, I've got to have a lot to 0:02:10.000 --> 0:02:12.200 be a high networth individual, you do? 0:02:12.480 --> 0:02:15.280 And ultra high networth individual. 0:02:14.880 --> 0:02:19.400 Soul, everybody here is a high net worth individual and HNW, 0:02:19.560 --> 0:02:23.400 but only those above what was it, thirty thirty, ultra thirty, 0:02:23.680 --> 0:02:25.799 ultra high networth, well thirty is not going to get 0:02:25.800 --> 0:02:28.080 you much. These days is it by the time you've 0:02:28.120 --> 0:02:31.400 got a holiday home and a boat and all that. 0:02:31.480 --> 0:02:35.040 And that's the interesting thing that we're seeing, Meren, the 0:02:35.160 --> 0:02:38.399 growth in terms of that population. So when you look 0:02:38.400 --> 0:02:41.839 at that full high networth individual population, yeah, I think 0:02:41.880 --> 0:02:45.640 we're talking about twenty five million people globally. Yeah, and 0:02:45.680 --> 0:02:48.440 we've added when we look at the year twenty four 0:02:48.560 --> 0:02:54.880 versus twenty five, we've added two million additional high networth individuals. 0:02:54.880 --> 0:02:58.160 So the population is growing, but their absolute wealth is 0:02:58.200 --> 0:03:00.760 growing as well, Meren. And it's growing at the fastest 0:03:00.840 --> 0:03:03.840 level when we compare twenty twenty four to twenty twenty 0:03:03.880 --> 0:03:06.120 five for the last five years. 0:03:06.440 --> 0:03:09.720 Interesting, have you got any analysis of the bit above that, 0:03:10.280 --> 0:03:13.520 like anyone over two hundred or how many billionaires, etc. 0:03:13.919 --> 0:03:15.760 Or a week stopping at thirty for the pepastes of 0:03:15.760 --> 0:03:16.200 this real world. 0:03:16.280 --> 0:03:19.720 Well, we've captured that ultra high net worth individual segment, 0:03:19.760 --> 0:03:22.000 if I could describe it that way, Maren, as above 0:03:22.080 --> 0:03:26.200 thirty million, So we haven't looked at bands within that. However, 0:03:26.720 --> 0:03:30.000 when we look at that group as well, it's something 0:03:30.080 --> 0:03:34.000 like one percent of those total high net worth population, 0:03:34.680 --> 0:03:37.680 and they own something like thirty five percent of that 0:03:37.800 --> 0:03:41.200 tall wealth. So there's a real concentration at the top 0:03:41.240 --> 0:03:45.120 of the pyramids. So one percent represents thirty five percent, 0:03:45.200 --> 0:03:48.920 So there's really individuals there that meet your definition at 0:03:49.280 --> 0:03:51.640 two three, four hundred million plus. 0:03:51.760 --> 0:03:53.760 Yeah, the bit where you really can have anything you want. 0:03:54.040 --> 0:03:55.360 Exactly. Yeah, indeed. 0:03:55.440 --> 0:03:58.240 Okay, So where is wealth growing the most? I think 0:03:58.240 --> 0:04:01.360 we probably all would get that. It's the US, which 0:04:01.360 --> 0:04:04.920 is where we're seeing the highest number of people entering 0:04:04.960 --> 0:04:07.960 the high net worth equation and growing the fastest. 0:04:08.800 --> 0:04:12.360 Yeah, exactly. Again, based on our cap Gemini analysis in 0:04:12.400 --> 0:04:15.640 our World Wealth Report, when we compare twenty twenty four 0:04:15.680 --> 0:04:20.160 to twenty twenty five, something like ten percent growth in 0:04:20.279 --> 0:04:24.440 terms of that high net worth individuals in the US, 0:04:24.920 --> 0:04:28.400 and that was growing the fastest globally. Asia Pacific was 0:04:28.440 --> 0:04:31.520 also pretty positive on that basis. And then when you 0:04:31.560 --> 0:04:35.200 looked at Europe and the UK still growing merin but 0:04:35.960 --> 0:04:37.599 and less less positively. 0:04:37.920 --> 0:04:38.200 Yeah. 0:04:38.240 --> 0:04:41.040 And then probably the Middle East was one example when 0:04:41.040 --> 0:04:44.000 we compared twenty four to twenty five where actually we 0:04:44.040 --> 0:04:46.840 saw a decrease in terms of some of that both 0:04:46.880 --> 0:04:50.520 population and wealth, but the US leading the way, followed 0:04:50.520 --> 0:04:51.440 by Asia Pacific. 0:04:51.880 --> 0:04:54.680 Okay, And if you look at Asia Pacific. We'll come 0:04:54.720 --> 0:04:57.080 back to the miseries of Europe shortly, but a lot 0:04:57.120 --> 0:04:59.479 of that presumably was based around the extraordinary rise in 0:04:59.520 --> 0:05:01.800 these create a stock market it. 0:05:01.839 --> 0:05:05.440 Was, yeah, indeed, Yeah, we're seeing positive, positive trajectory on 0:05:05.480 --> 0:05:09.039 that basis. And interestingly, to your point there, and for 0:05:09.080 --> 0:05:13.200 these high networth individuals, we also saw equities become more 0:05:13.240 --> 0:05:16.880 important in their portfolio. The stock market increases that we 0:05:16.960 --> 0:05:20.800 saw were certainly driving a proportion of that that wealth 0:05:20.880 --> 0:05:22.400 population and wealth growth. 0:05:22.680 --> 0:05:25.279 So when you look at who's growing wealthier ware across 0:05:25.480 --> 0:05:27.919 the world, you can pretty much see the correlation with 0:05:27.960 --> 0:05:31.600 domestic stock markets. It's interesting because it suggests that most 0:05:31.640 --> 0:05:33.000 places have a fairly hefty. 0:05:32.760 --> 0:05:33.240 Home buy it. 0:05:34.120 --> 0:05:37.719 Yes, yeah, very much so. And we saw a little 0:05:37.720 --> 0:05:40.360 bit of a movement away from some of the more 0:05:40.440 --> 0:05:45.160 conservative asset classes. So where we saw equities increase by 0:05:45.200 --> 0:05:49.680 something like three percent, we saw cash reduce by two percent, 0:05:49.760 --> 0:05:50.440 So some of that. 0:05:50.400 --> 0:05:52.560 Kind of Yeah, I'm always interested by when I look 0:05:52.600 --> 0:05:54.800 at your chats every year, I'm always interested by the 0:05:54.880 --> 0:05:59.240 extent of which the high network people keep so much 0:05:59.320 --> 0:06:02.000 money and can your cash equivalents. It always knocks around 0:06:02.040 --> 0:06:04.760 pretty substantially over twenty percent twenty three, twenty four to 0:06:04.839 --> 0:06:07.080 twenty five percent, and that seems an awful lot of 0:06:07.120 --> 0:06:09.560 your assets to hold in cash, your cash equivalents. I'm 0:06:09.560 --> 0:06:12.480 pretty sure that if you looked at mid ranking wealthy 0:06:12.520 --> 0:06:16.000 people before they quite get you your millionaire next door, 0:06:16.040 --> 0:06:17.919 they'd be holding much less of that in cash your 0:06:18.000 --> 0:06:18.719 cash equivalents. 0:06:18.839 --> 0:06:20.479 Yeah, I think, I think, I think you're right, and 0:06:20.480 --> 0:06:23.000 I think it's we always use it as a little 0:06:23.000 --> 0:06:26.960 bit of a barometer in terms of risk appetite, conservatism, 0:06:27.440 --> 0:06:32.080 and in markets that are growing, were individuals the greater 0:06:32.279 --> 0:06:36.799 value in terms of stop and equity markets, they're obviously 0:06:37.240 --> 0:06:41.320 taking on a greater risk position. Fixed income we also 0:06:41.360 --> 0:06:44.040 saw increase when we looked at twenty four versus twenty 0:06:44.040 --> 0:06:47.599 five Merrin so again by something like two percent these points. 0:06:48.040 --> 0:06:52.599 And interestingly, alternative investments we saw a little bit of 0:06:52.640 --> 0:06:54.880 a decline, So there was a move away from some 0:06:54.960 --> 0:06:59.520 of the alts into fixed income and equities. But I 0:06:59.520 --> 0:07:03.560 think you point. I think those higher worth individuals were 0:07:03.560 --> 0:07:08.239 really following where they saw the performance and the value 0:07:08.480 --> 0:07:10.040 in twenty twenty five. 0:07:10.400 --> 0:07:12.160 And when you say alternatives, what do you mean you're 0:07:12.160 --> 0:07:15.040 talking about private equity and the main private equity, private credit, etc. 0:07:15.480 --> 0:07:19.360 Private equity, private credit, some of the hedge hedge funds. Yeah, 0:07:19.480 --> 0:07:22.520 and again not all of those investment asset classes are 0:07:22.560 --> 0:07:25.200 available to everyone. You know, and I know you've discussed 0:07:25.200 --> 0:07:28.200 this in the past in terms of both the liquidity 0:07:28.240 --> 0:07:33.400 associated with private assets but also in terms of accessibility. 0:07:33.680 --> 0:07:37.280 But again, I think that breadth of asset class and 0:07:37.320 --> 0:07:41.880 those breadth of investments is something we're seeing greater appetite for. 0:07:42.760 --> 0:07:44.880 I was interested to see that two thirds of your 0:07:44.920 --> 0:07:47.360 respondents said that they were interested in increasing their exposure 0:07:47.400 --> 0:07:50.720 to private equity, which seems to me so slightly extraordinary 0:07:50.720 --> 0:07:52.840 at the moment when it hasn't been a great performer, 0:07:52.880 --> 0:07:55.080 and there's an awful lot of debate about the extent 0:07:55.120 --> 0:07:58.320 to which it's historical record about performance is real or not. 0:07:58.440 --> 0:07:59.840 But still everyone says they want more. 0:08:00.560 --> 0:08:02.640 I think they want more access to it, Marin. That's 0:08:02.680 --> 0:08:05.040 not necessarily going to say they're going to commit, but 0:08:05.160 --> 0:08:08.040 having the option, and I think this for high net 0:08:08.080 --> 0:08:13.760 worth individuals, access to products and services is a real 0:08:13.840 --> 0:08:19.400 driver and the ability to the ability to diversify your portfolio, 0:08:19.480 --> 0:08:22.800 whether it be in terms of asset classes, are also 0:08:23.080 --> 0:08:26.280 geographically Again, I think you and I have touched on 0:08:26.320 --> 0:08:29.280 this in the past. We've seen high net worth individuals 0:08:29.360 --> 0:08:34.880 want to diversify into different markets. We've seen significant growth 0:08:34.880 --> 0:08:37.720 and attraction in Asia and the Middle East in the past. 0:08:38.160 --> 0:08:41.200 So I think to your point about two thirds of 0:08:41.240 --> 0:08:44.960 our respondents wanting to have access to the alternative investments, 0:08:44.960 --> 0:08:48.000 I think that's true. Whether or not they'll commit is 0:08:48.040 --> 0:08:50.280 dependent on that point in terms of where they see 0:08:50.360 --> 0:08:52.319 value and where they see growth and. 0:08:52.280 --> 0:08:54.160 What about crypto, And one of the things that you 0:08:54.200 --> 0:08:55.920 talk about in the report is how important it is 0:08:55.960 --> 0:08:58.600 for wealth managers to be able to offer their high 0:08:58.600 --> 0:09:03.120 networth investors' access to all investment classes and crypto. Again, 0:09:03.200 --> 0:09:06.080 is that a class that I'm loath to call it 0:09:06.080 --> 0:09:07.800 an asset class to be honest, But is that a 0:09:07.840 --> 0:09:10.400 group of possible places where you might put some money 0:09:10.600 --> 0:09:12.560 about that investors are more interested in? 0:09:12.640 --> 0:09:16.319 Now more interested is a subjective statement, but again I 0:09:16.360 --> 0:09:19.280 would put it in the same class as alternative investments. 0:09:19.880 --> 0:09:24.760 If you're wealth manager can give you access to digital assets, 0:09:24.840 --> 0:09:28.160 to crypto, and they can do it through a platform 0:09:28.320 --> 0:09:31.520 that's easily accessible, then I think that is kind of 0:09:31.559 --> 0:09:36.000 meeting these high net worth individuals their expectations and giving 0:09:36.000 --> 0:09:39.440 them the option to choose that within their portfolio, whether 0:09:39.520 --> 0:09:41.640 or not they take that decision, I think, as I say, 0:09:41.679 --> 0:09:42.640 it's a different point. 0:09:42.720 --> 0:09:43.600 It's a different matter. 0:09:44.080 --> 0:09:58.880 Yeah. 0:09:59.480 --> 0:10:01.560 One of the things you're saying this new report is 0:10:01.559 --> 0:10:05.320 that we are, at your words, clear inflection point for 0:10:05.360 --> 0:10:09.040 the wealth management industry. What does that mean and why now? 0:10:09.360 --> 0:10:12.120 I think the inflection point I think that's probably founded 0:10:12.160 --> 0:10:15.040 on three perspectives here, Maren. I think the first point, 0:10:15.040 --> 0:10:18.600 I would say is just growing this growing wealth. And 0:10:18.679 --> 0:10:21.720 I think we've seen this trajectory over thirty years. Actually 0:10:21.720 --> 0:10:24.080 we've been writing this report for thirty years, which yeah, 0:10:24.120 --> 0:10:25.920 makes us all feel a little bit dated, but. 0:10:26.080 --> 0:10:28.280 The way dated, but expert dated, but. 0:10:28.320 --> 0:10:33.160 Expert and d experienced. But I think the wealth management 0:10:33.200 --> 0:10:37.760 industry obviously continues to grow to service this growing population 0:10:38.080 --> 0:10:41.160 and say it grew by seven point eight percent globally 0:10:41.200 --> 0:10:45.880 in twenty twenty five. But also the expectations of those individuals. 0:10:46.160 --> 0:10:49.839 And we started this conversation by defining high net worth individuals. 0:10:50.040 --> 0:10:54.480 The expectation is that we can bring very personal, a 0:10:54.600 --> 0:10:59.160 very personal relationship, a very personal experience, and we can 0:10:59.240 --> 0:11:01.920 also bring the breadth of products and services that those 0:11:01.960 --> 0:11:05.080 individuals require. So I think there's a real kind of 0:11:05.120 --> 0:11:08.240 call to action for the wealth managers to move away 0:11:08.280 --> 0:11:11.920 from some of this kind of standard wealth band segmentation 0:11:12.600 --> 0:11:16.360 to bring very kind of personalized products and services. 0:11:16.480 --> 0:11:21.240 Why because most people, as far as I see it, 0:11:21.360 --> 0:11:23.839 most people, until you get up into your thirty, forty, 0:11:23.880 --> 0:11:27.640 whatever million dollar band, most people require the same things 0:11:27.679 --> 0:11:30.679 from their wealth manager. They don't mind some talking in 0:11:30.720 --> 0:11:34.120 your report about the importance of empathy led advice. And 0:11:34.160 --> 0:11:36.360 I can't think of anything worse than my wealth manager 0:11:36.400 --> 0:11:38.559 giving me empathy led advice. What I'd like him to 0:11:38.640 --> 0:11:42.200 do is to make me absolute returns in excessive inflation 0:11:42.320 --> 0:11:45.000 every single year without making a fuss about it. And 0:11:45.080 --> 0:11:47.440 that seems to me that is what everybody wants from 0:11:47.480 --> 0:11:53.280 their wealth manager. Not endless communication and empathy and complicated portfolios. 0:11:53.280 --> 0:11:54.040 What am I missing? 0:11:54.320 --> 0:11:56.520 We might have to agree to disagree here, Marion, because 0:11:56.520 --> 0:11:59.920 I do think that model where success is purely bag 0:12:00.120 --> 0:12:05.200 some performance and it's purely denominated by your annual portfolio review, 0:12:06.280 --> 0:12:10.040 is not the expectation in terms of the pace with 0:12:10.080 --> 0:12:12.880 which the markets in the world is moving. And I 0:12:12.880 --> 0:12:17.079 think high net worth individuals want to have the ability 0:12:17.160 --> 0:12:21.960 to be able to optimize products and services on a 0:12:22.080 --> 0:12:24.840 very kind of timely and a very real time basis. 0:12:24.920 --> 0:12:27.600 What does that What does that mean? Gareth? What does 0:12:27.640 --> 0:12:31.080 that mean? Optimize products and services on a real time basis? 0:12:31.360 --> 0:12:34.480 Surely you employ a wealth manager to manage your money 0:12:35.040 --> 0:12:39.480 without constant reference to you, because it's a delegated activity. 0:12:39.840 --> 0:12:41.480 But the way you seem to be looking at is 0:12:41.480 --> 0:12:44.640 though it is a non delegated activity, but more of 0:12:44.679 --> 0:12:48.880 a regular conversation in that when previously when we've talked 0:12:48.880 --> 0:12:51.120 to we've talked about wealth management on the podcast. What 0:12:51.160 --> 0:12:52.840 we do is we say to people, look, if you 0:12:52.840 --> 0:12:54.880 don't want to manage your own money, get some guy 0:12:54.920 --> 0:12:56.800 to go do it for you. Then you can sleep 0:12:56.800 --> 0:12:58.240 at night and you don't have to think about it. 0:12:58.760 --> 0:13:01.959 So is the suggest here that high networth individuals are 0:13:02.040 --> 0:13:05.640 changing from that idea of I give my money to 0:13:05.679 --> 0:13:07.840 this guy or woman and they're going to take care 0:13:07.880 --> 0:13:09.160 of it and I don't have to do anything. I 0:13:09.160 --> 0:13:10.920 can sleep at night because I know this guy's a 0:13:10.920 --> 0:13:14.080 pro and he's got it under control. What you're talking 0:13:14.120 --> 0:13:19.680 about seems to be a regular communication that involves empathy. 0:13:19.880 --> 0:13:23.360 There's definitely the need for more of a kind of 0:13:24.040 --> 0:13:28.680 proactive and regular management of your portfolio. Now, I suppose 0:13:28.720 --> 0:13:30.760 the point I'm making here is if you want to 0:13:30.840 --> 0:13:34.680 delegate that and leave that on a twelve month schedule, 0:13:35.320 --> 0:13:39.960 then that's obviously one requirement. However, I think there are 0:13:39.960 --> 0:13:44.160 individuals who want to have opportunities to present it to 0:13:44.200 --> 0:13:47.480 them in a very kind of immediate fashion. So as 0:13:47.600 --> 0:13:50.280 things are changing, whether that be changes in the market, 0:13:50.520 --> 0:13:54.720 changes in the geopolitical situation, changes in terms of their 0:13:54.920 --> 0:13:58.800 kind of personal situation, meren, they're looking for their wealth 0:13:58.840 --> 0:14:03.600 managers to be pro and to predict what's required based 0:14:03.640 --> 0:14:07.640 on their requirements and objectives and intervene on that basis. 0:14:07.760 --> 0:14:09.839 So I think we are seeing a demand for a 0:14:09.920 --> 0:14:14.600 much more active relationship rather than a periodic relationship. And also, 0:14:15.040 --> 0:14:18.520 I think this idea that we're operating in a very 0:14:18.559 --> 0:14:21.480 kind of real time environment. You and I have become 0:14:21.840 --> 0:14:26.080 very comfortable with the immediate experience, the real time experience 0:14:26.160 --> 0:14:29.560 of being able to order an Amazon being delivered within 0:14:30.240 --> 0:14:33.600 X number of ours if required. Again, I think in 0:14:33.640 --> 0:14:39.000 a wealth management context, marin clients want to have that 0:14:39.200 --> 0:14:42.800 level of insight they want their wealth managers to understand 0:14:43.440 --> 0:14:47.280 their expectations and their objectives and to respond on that basis. 0:14:47.320 --> 0:14:50.320 And the other thing I would say from our analysis, Maren, 0:14:50.360 --> 0:14:54.840 we've seen if you're able to provide the level of 0:14:54.840 --> 0:14:59.880 personalization that we're talking about here, those individuals will recommend 0:15:00.040 --> 0:15:04.960 and you to their peers and to their friends, even. 0:15:04.800 --> 0:15:07.320 If you're charging more than the robo advisor down the road. 0:15:07.920 --> 0:15:10.880 And the other time now that we're saying is individuals 0:15:10.920 --> 0:15:16.000 are having multiple relationships with their wealth managers. Five years ago, 0:15:16.120 --> 0:15:21.240 six years ago, in twenty nineteen, something like thirty nine 0:15:21.280 --> 0:15:25.000 percent of all individuals had a relationship with one wealth 0:15:25.040 --> 0:15:28.480 management organization. When we look at that figure nine in 0:15:28.520 --> 0:15:32.280 twenty twenty five, that's reduced to nineteen percent. So my 0:15:32.360 --> 0:15:37.920 point is, Maren, individuals are looking towards multiple organizations to 0:15:38.360 --> 0:15:40.880 provide access to the products and services they need. 0:15:41.240 --> 0:15:42.920 That is one of the numbers that jumped out as 0:15:42.960 --> 0:15:46.000 me as well. And I think you may look at 0:15:46.000 --> 0:15:48.320 that and say, maybe they're not satisfied with one and 0:15:48.360 --> 0:15:51.280 so they're moving to another. But that doesn't Necesslily argue 0:15:51.320 --> 0:15:57.040 against the idea that you want a personalized, empathetic wealth manager, 0:15:57.080 --> 0:16:00.000 because if you have four different wealth managers, they definitely 0:16:00.080 --> 0:16:02.480 do not have oversight of your full portfolio or of 0:16:02.520 --> 0:16:05.080 your full lifestyle because you've got three other guys as 0:16:05.080 --> 0:16:10.600 well who are doing something else. If you want that personalized, 0:16:10.720 --> 0:16:15.880 empathetic one on one understand my family, understand my generational shifts, 0:16:15.960 --> 0:16:18.480 understand my wealth, understand how I feel, etc. 0:16:18.760 --> 0:16:18.920 Etc. 0:16:19.360 --> 0:16:22.400 You'd want one wealth manager. This is like having four therapists. 0:16:22.560 --> 0:16:24.480 The kind of argument to that, I would say is 0:16:24.520 --> 0:16:28.600 that if you can provide the full breadth of products 0:16:28.640 --> 0:16:32.760 and services that's required under a single umbrella, under a 0:16:32.800 --> 0:16:37.120 single umbrella, then I think you can maximize the strength 0:16:37.160 --> 0:16:39.480 and quite frankly, the stickiness of that relationship. 0:16:39.760 --> 0:16:43.240 Okay, shift, this shift represents the failure of the industry. 0:16:44.400 --> 0:16:50.560 I think this shift represents that demand from clients for 0:16:51.480 --> 0:16:56.720 a greater personalized relationship with empathy and also a greater 0:16:56.960 --> 0:16:59.880 access to products and services because no one firm has 0:16:59.880 --> 0:17:04.000 been providing that. And we've also seen merin to your point. 0:17:04.160 --> 0:17:07.640 We've seen the advent of the robo advisors. We've seen 0:17:07.680 --> 0:17:11.080 growth in that kind of digital only model. We at 0:17:11.080 --> 0:17:13.359 the other end of the scale, we've seen growth in 0:17:13.440 --> 0:17:16.080 terms of the family offices. So again, if you look 0:17:16.080 --> 0:17:21.080 at the traditional wealth management organizations, there's competition from family offices. 0:17:21.440 --> 0:17:26.359 There's competitions from the kind of robo advisors and in 0:17:26.400 --> 0:17:30.320 the model where they're not able to deliver the experience 0:17:30.440 --> 0:17:34.280 or the products and services that's required. That's meaning assets 0:17:34.720 --> 0:17:38.800 are flowing away from the traditional wealth management firms to 0:17:38.960 --> 0:17:42.199 the competition. And again in our report we quantify that 0:17:42.240 --> 0:17:46.639 as something like one point five trillion of new assets 0:17:46.800 --> 0:17:50.920 that have moved into that competitive sphere. So there's an opportunity, 0:17:51.160 --> 0:17:52.840 but obviously there's clearly a threat as well. 0:17:52.960 --> 0:17:55.560 Yeah, and you're focusing the highest growth rates for the 0:17:55.640 --> 0:17:58.479 robo advisors over their traditional the family offices, which makes 0:17:58.480 --> 0:18:00.640 sense because the lower base, etc. But that is where 0:18:00.680 --> 0:18:01.959 you're expecting to see the growth. 0:18:02.560 --> 0:18:04.439 It is. But again you've got to look at this 0:18:04.560 --> 0:18:07.720 at an individual basis, because again when we look at 0:18:07.760 --> 0:18:11.480 those ultrahi networth individuals with investable assets of greater than 0:18:11.560 --> 0:18:15.520 thirty million, the rule of the family offers not just 0:18:15.560 --> 0:18:18.720 the financial services that they're bringing marin, but some of 0:18:18.720 --> 0:18:24.480 those non financial services around estate planning, inheritance likewise becomes 0:18:24.480 --> 0:18:27.680 increasingly important. When we look at products and services. Of course, 0:18:27.720 --> 0:18:31.120 we can talk about asset types, we can talk about crypto, 0:18:31.240 --> 0:18:33.960 we can talk about alternatives. But I also think there's 0:18:33.960 --> 0:18:36.120 a rule for the wealth management firms here to bring 0:18:36.200 --> 0:18:39.720 those broader services to bear again in a way that's 0:18:39.720 --> 0:18:41.160 directly relevant to their clients. 0:18:41.440 --> 0:18:45.560 Yeah, okay, so most marintalks money listeners I think are 0:18:45.560 --> 0:18:48.160 probably at the top end of your millionaire next door, 0:18:48.200 --> 0:18:49.720 maybe the bottom end of your million next door, or 0:18:49.800 --> 0:18:53.280 maybe soon they'll be your millionaire next door. What should 0:18:53.280 --> 0:18:55.160 they be looking for in a wealth manager? 0:18:55.400 --> 0:18:57.800 First and foremost, I think they should be looking for 0:18:58.560 --> 0:19:02.920 performance manager that gives them the return that they aspire 0:19:02.960 --> 0:19:07.199 towards in terms of their objectives. I also think they 0:19:07.200 --> 0:19:09.680 should be looking for a wealth management firm that gives 0:19:09.720 --> 0:19:14.840 them access to the products and services which they believe 0:19:14.920 --> 0:19:18.400 will be relevant for them and their family going forward. Yeah, 0:19:18.440 --> 0:19:20.239 and then the final thing I would say is a 0:19:20.240 --> 0:19:24.240 wealth manager where they don't have to repeat themselves. Part 0:19:24.280 --> 0:19:28.119 of our analysis suggested that individuals forty two percent of 0:19:28.119 --> 0:19:31.080 the individuals in the high network that we interviewed have 0:19:31.200 --> 0:19:34.960 to restate their objectives and requirements. Can you have a 0:19:35.000 --> 0:19:39.640 relationship with an organization? He Here's your requirements once understands 0:19:39.680 --> 0:19:43.600 them and actively manages those going forward, this idea of 0:19:43.640 --> 0:19:47.440 personalization but also access to products and services. 0:19:47.840 --> 0:19:50.159 Yeah, I guess that robo advisory you do only have 0:19:50.240 --> 0:19:50.720 to tell. 0:19:50.560 --> 0:19:55.000 Once indeed, and also a robo advisor can take advantage 0:19:55.000 --> 0:20:00.040 of some of the artificial intelligence data and information and 0:20:00.160 --> 0:20:03.640 that's increasingly available to optimize that relationship. 0:20:03.680 --> 0:20:05.560 Maron, Well, I suppose that is one of the questions 0:20:05.560 --> 0:20:07.480 ever thinking about how do you find a wealth manager? 0:20:07.480 --> 0:20:09.520 What are you looking for in a wealth manager? The 0:20:09.760 --> 0:20:11.959 questions you're going to ask are taught me through your 0:20:11.960 --> 0:20:14.560 performance and show me how that works relative to the 0:20:14.600 --> 0:20:17.040 performance from other wealth managers, which I know is information 0:20:17.080 --> 0:20:19.680 that is not always easy to get hold of. And 0:20:19.720 --> 0:20:22.000 then what products and services are you providing? Can you 0:20:22.040 --> 0:20:25.720 show me the whole suite and outside actual products? Do 0:20:25.840 --> 0:20:28.760 you have a tax advice et cetera, et cetera legal 0:20:28.840 --> 0:20:32.520 environment department? And then maybe this last question is can 0:20:32.520 --> 0:20:34.600 you explain to me how you are using AI to 0:20:35.200 --> 0:20:36.400 enhance your productivity? 0:20:36.760 --> 0:20:39.280 Yeah, well, you know, I think a lot of that 0:20:39.400 --> 0:20:42.480 is focused on that role of the relationship manager, which 0:20:42.520 --> 0:20:46.040 is still very key role across the industry. And again 0:20:46.080 --> 0:20:48.199 when we looked at when we looked at the relationship 0:20:48.200 --> 0:20:50.160 managers that we met and we talked to, I think 0:20:50.200 --> 0:20:52.160 we talked to something like thirteen hundred of them as 0:20:52.200 --> 0:20:56.000 part of our report. Maren still about forty percent of 0:20:56.040 --> 0:21:02.000 the activity they do they consider as operational administration. Can't 0:21:02.040 --> 0:21:05.800 you use AI to somewhat automate that and then ensure 0:21:05.880 --> 0:21:10.720 that the relationship managers are spending their time bruly invested 0:21:10.760 --> 0:21:13.320 in their clients and their clients wealth and their clients' 0:21:13.359 --> 0:21:17.960 portfolios using artificial intelligence around things like know your customer, 0:21:18.560 --> 0:21:22.560 some of the tools and techniques around managing meetings, and 0:21:22.600 --> 0:21:25.119 some of the kind of communication on that basis, and 0:21:25.200 --> 0:21:29.520 portfolio optimization. We still believe the relationship manager is key, 0:21:29.920 --> 0:21:33.040 and even in the world of AI Maren, we still 0:21:33.080 --> 0:21:36.720 believe there's a role for the human element, the human 0:21:36.800 --> 0:21:40.640 judgment within the wealth management industry and that that relationship. 0:21:41.200 --> 0:21:44.680 Using AI to support the relationship manager, but also using 0:21:44.680 --> 0:21:47.720 AI to understand more about you as a client. Okay, 0:21:47.760 --> 0:21:49.719 what do we know about Maren and the things that 0:21:49.760 --> 0:21:51.200 she's doing Beyond. 0:21:51.080 --> 0:21:53.600 Maren wants to make two or three percentage points above 0:21:53.640 --> 0:21:57.120 inflation every year and not be bothered. That's what Maren wants, 0:21:57.520 --> 0:21:59.640 and I still think that's what most people. 0:21:59.359 --> 0:22:01.639 Well, you know, I think what we're talking about here 0:22:01.680 --> 0:22:05.360 will hopefully not only meet your expectations, Maren, but exceed them. 0:22:05.840 --> 0:22:08.320 Okay, excellent. Can I ask you one last question before 0:22:08.320 --> 0:22:11.280 we've finished, which is about family offices. We're seeing the 0:22:11.440 --> 0:22:13.520 rise and rise of the family office. How much money 0:22:13.560 --> 0:22:15.639 do you need for that. I'm not talking about a 0:22:15.640 --> 0:22:17.800 single family offices. I'm sure some of my listeners are 0:22:17.840 --> 0:22:20.080 rich enough for a single family office, but a multiple 0:22:20.080 --> 0:22:21.920