Three of the key factors by which HNWs select their managers show neither model has an edge
While the investment community focuses on the World Wealth Report 2013’s regional trends, I’m more intrigued by the HNW polling.
Entitled the Global HNWI Insights Survey, the poll of 4400 HNWs reveals exactly what kind of institution – banks or independents – have the edge in beauty parades at the moment.
First up, 41 per cent of HNWs said that they had a strong preference for institutions that meet the full range of financial needs, relative to 14 per cent who showed a strong preference for various firms with specific areas of expertise. One-nil to the banks, you might say, as they have multiple business lines under one roof in contrast to the private-client investment houses who focus on liquid portfolios.
Second, 34 per cent of HNW respondents in the Global HNWI Insights Survey favoured institutions which offer single point of contact service, more than the 24 per cent who insist on multiple experts. We’ll call that one-one, as the independents operate a model whereby the investment and relationship management roles are combined whereas the banks separate them.
What’s most surprising, however, is the third question. 28 per cent of HNWs said that they were uncomfortable with institutions who recommend mostly in-house products, yet 28 per cent were also comfortable with the reverse — a tie in a battle that you would have expected the independents to win given that they are free to choose the best performing products based on performance and not loyalty.
The Global HNWI Insights Survey therefore shows that in 2012 beauty parades, three of the key factors by which HNWs select their managers show neither model has an edge and so the personality of the adviser is likely to be the crunch factor. That's why Spear's always focuses on individual advisers in our Indices…