According to a study the worlds wealthiest are more comfortable with digital communications than their less affluent counterparts and have integrated them with greater ease into their daily lives
LONDON – According to a study released by SEI, Standard Chartered Private Bank and Scorpio Partnership the world’s wealthiest are more comfortable with digital communications than their less affluent counterparts and have integrated them with greater ease into their daily lives.
The research, entitled The Futurewealth Report: Stepping into the Communication Age, explores preferred methods of communication among 3,477 of the world’s wealthy, worth USD1.9 million on average. It reveals that those worth over USD4 million spend 28 hours a week using digital channels compared with the 19 hours among this wealthy group as a whole.
Indeed, the wealthiest are using digital channels like email, web portals, social networking, SMS messages, instant messaging and VOIP calls almost as much as more traditional channels such as face-to-face meetings, written communications and telephone calls. They are also pioneering niche forms of digital communication. Those with over USD4 million spend nearly 5 hours a week using instant messaging compared to the 1.6 hours spent on this activity by those with net worth under USD500,000.
The report highlights that it is the world’s wealthiest individuals have a strong appetite for digital communication and they expect their financial providers to follow suit. This has important ramifications for businesses looking to communicate efficiently with their wealthiest customers. In particular, they will expect to receive information through a wide range of channels more in the future emphasising the need or a well-planned, multi-channel communication strategy when engaging with these valued clients.
“Wealth managers must not over-emphasise the importance of face-to-face contact with their most prized clients,” says Catherine Tillotson, Managing Partner at Scorpio Partnership. “Our findings show is that the wealthiest individuals want a more dynamic relationship; they want to be able to engage with their wealth provider using the same tools that they are already actively using in their everyday lives.”
The study also finds a distinct regional split with High Net Worth individuals (HNWs) in the Asia Pacific countries already spending more time on communication channels than their Western counterparts. Significantly, many more HNWs in the Asia Pacific region expect to increase their usage of digital forms of communication in the next five years than their peers in Western markets.
The report also examines the reasons behind the future growth of digital communications among global HNWs. The world’s wealthy find digital communication tools offer a wide range of benefits: they are efficient, easy to access, flexible and offer good value for money. Certain digital channels are particularly useful in a wealth management context because they are secure, personal and help with record-keeping.
By contrast, the more traditional channels of communication, such as telephone calls, face-to-face meetings and written communications tend have particular advantages, for example, providing visual contact or a personal connection.
“The second Futurewealth report reinforces the important role technology plays in the communication habits of the wealthy,” says Al West, Chairman and Chief Executive Officer of SEI. “These studies show us which communication tools the wealthy are using, how they are using them, in what capacity, and importantly, how wealth managers need to adapt and evolve to meet their expectations.”
The wealthiest of the sample are the most active communicators all round, spending 43 hours a week on communication tasks. This compares to the 30 hours spent on communication by the group as a whole.
Among the respondents, 35% expect to use digital channels of communication “much more” in five years’ time, compared with 26% who expect to use traditional channels “much more”.
This trend also applies to their financial relationships. With a five year view, email and secure web portals will become increasingly important channels of communication between the world’s wealthy and their wealth managers. Financial professionals also need to be mindful that wealthy clients see instant messaging, SMS, social networking and VOIP calls as “distinctly evident” in their future engagement.
Once again it is the wealthiest respondents, those worth over USD4 million, who have the highest expectations for digital delivery from their service providers. They are the clients who will be demanding more advanced forms of communications from their wealth advisors in the future.
There is also a geographic variation which shows that Asia Pacific HNWs are more communicative than those in the West. Those HNWs who live in the Asia Pacific countries already spend more time on communication tasks than HNWs in the Americas and Europe across all channels.
Looking ahead, more than half (56%) of Asia Pacific-based respondents plan to use email much more in five years’ time compared to just 41% in the Americas and 33% in Europe. Almost half also plan to increase their usage of web portals, social networking and instant messaging in the next five years as well. Indeed, those in the Asia Pacific region are already highly active social networkers spending over four hours hours each week on social media sites, which is an hour and a half more than their Western counterparts.
The research also finds that Asia’s millionaires expect much more digital and non-digital communication in their financial relationships, meaning their wealth managers should review systems and structures to ensure they are communicating effectively with the world’s fastest growing community of HNWs.
This report is the second in a four-part series of studies as a component of the larger Futurewealth Project, which aims to better understand the ambitions and consumer attitudes of the world’s up-and-coming wealthy. Each report focuses on a different aspect of the theme of how technology and digital communications can be used to engage the next generation of wealthy. The next report will focus on Helpful Investment Technology looking at what wealthy technology customers expect from their financial provider.
To read the full report please visit www.scorpiopartnership.com