This week we launch our Delio Insights blog series. In our first article, “The increasing demand for private assets and why wealth managers should care”, we explore what motivates high net worth individuals when allocating increasing portions of their wealth toward private asset investments, and why they are choosing to do so via direct investments rather than through funds.
At Delio, we believe it is not just about a “chase for yield” in a low return environment and that the factors are far more nuanced. Today’s wealth creators are increasingly entrepreneurial, hands-on, "DIY" investors who want to be engaged and want to influence their investments much like they do on a day to day basis; it is as much about passion and intellectual stimulation as increasing their returns.
Our first article will move beyond exploring these factors and look at why today's wealth managers should care.
Wealth managers are already seeing the first tentative signs of losing the battle to appeal to the next generation. The average age of a HNW individual has gradually fallen to 57 (60 for UHNW) yet the average age of a wealth management client has modestly increased to 62. They are trying to solve this through digitisation but the answer also lies in evolving the proposition itself and an increasingly relevant private asset proposition is where the solution can lie.
A private asset offering can help build closer relationships with clients, appealing to these emotional drivers. There are very tangible financial benefits for institutions too, which are increasingly needed in an industry suffering heavily from margin compression.
There are lots of challenges to consider when building this type of proposition but banks and wealth managers are well positioned to move in to this space, with access to enviable volumes of deal flow and their choice of innovative technology that is making the hurdles (not just regulatory) easier and easier to overcome.
In subsequent articles we will look at these challenges, but we will also explore what clients are investing in, how they are sourcing and selecting their investments and how this can help shape how financial institutions respond.
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For those who wish to keep abreast of our insights in to the challenges of building a private asset proposition please email firstname.lastname@example.org to be added to our mailing list.
Articles will delve more in to such topics as what the wealth management industry is currently doing and where it is going, what private assets the UHNW and family office population are investing in and how they are making their decisions.
To find out more about how we are helping organisations to build direct private asset propositions that enhance their offering, please get in touch via our website or email email@example.com to arrange an initial conversation.