Paul Charmatz
LSEG’s latest sponsored research looks at the changes that are impacting the wealth industry today and unpacks the views of respondents across the globe.
- In late 2023, LSEG sponsored detailed research to better understand changing preferences and emerging trends within the wealth industry.
- We asked investors across the globe about how changes in the wealth industry are impacting them.
- This Insight looks specifically at some key attitudes and opinions of respondents in APAC.
Accelerating digitalisation continues to re-shape the wealth industry, with a range of implications for all stakeholders, from wealth firms and advisors to self-directed investors and those offering digital investment products and services.
The research was broad and asked respondents to answer questions relating to how the role of financial advice is evolving; the impact of experience on investor behaviour; attitudes towards AI in investment; and gaps in the sustainable investment space.
To better understand the changes that are unfolding, LSEG sponsored detailed research across the wealth industry. Conducted by ThoughtLab, the research included two global surveys, one of 2,000 investors across countries, wealth levels, ages, lifestyles, occupations, genders and other characteristics, and the second of senior executives at 250 investment providers.
Alongside several global insights and conclusions, we have also distilled some key regional insights, and here we unpack the three key take-aways relating to APAC.
Key take-aways for APAC
Our research reveals three key insights relating to APAC:
1. Respondents in APAC are the most diversified in their investments globally
Respondents in APAC are significantly more likely than those in other regions to work with more than 4 providers, with 32% in APAC saying they do so, as opposed to 26% in EMEA and just 23% in North America.
Moreover, APAC investors are the most likely to be concerned with not being properly diversified in the next three years, with 15% expressing this as a concern.
2. They appear to be the most interested in shopping around
Almost two thirds (64%) of APAC respondents are considering switching from one investment provider to another over the next three years, and a third (33%) of respondents actually did make a change during the past three years. This figure rises further still to 39%, for respondents in Japan.
APAC respondents are the most willing to pay for financial advice when there is market volatility and complexity, with 56% - against an average of 51% overall – agreeing that this is the case. Given the opportunity, 56% would invest through big brand retailers or tech companies.
3. They have high expectations of their providers
Those in APAC are significantly more likely than those in other regions to expect their providers to offer them digital experiences that are on par with leading born-digital companies.
Three quarters (75%) of respondents expressed this view, with the percentage rising sharply to 82% for respondents in China. These figures compare to somewhat lower percentages in EMEA (68%) and North America (63%.)
Drilling down, APAC respondents are the most likely to want their providers to deliver better digital tools so they can manage their investments directly, with 62% - rising to 68% in Japan – of this opinion.
The pivotal issue of trust is underscored by responses within APAC, with a substantial 72% saying that they believe that, for the rest of the decade, working with trusted financial brands will be important to ensure reputable, professional support.
Turning to data security within the region, respondents in China are significantly more concerned with data security and privacy (61%) and financial fraud and scams (58%) than the rest of APAC (49% and 44% respectively).
What does this mean for industry participants?
Our findings show that respondents in APAC have a high propensity for dividing their wealth amongst a range of providers. Many have switched providers over the past few years and still more are entertaining the idea of switching providers in the next few years. For providers this is a clear call to deliver in line with high investor expectations within the region.
% of investors, categorised by region, who would follow their current advisory team to another firm
These investors are also the most willing to pay for financial advice when volatility and complexity are at play. Trusted financial brands are favoured and this presents advisors and providers with an opportunity to tap into the desire for trust within the industry – and to deliver the trusted data, insights and advice that investors value.
For platforms catering to self-directed investors, there is also much opportunity, given the strong desire within the region for digital experiences that are on par with leading born-digital companies. By offering trusted data, leading edge tech and seamless digital experiences, companies can deliver in line with investor preferences within the region.
About the research
The research covered four regions – Asia Pacific, Europe, the Middle East, and North America. By wealth level, the largest shares comprised mass affluent (25%) and high net worth (25%), followed by very high net worth (18%). By age, the largest share consisted of Gen X (31%), followed by Baby Boomers (30%).
The study also included a benchmarking survey of senior executives from a cross section of 250 wealth management firms, from independent wealth advisors and private banks to wealth management divisions within regional and international banks.
[1] Areas include: research products and services, portfolio analysis, asset allocation, tax loss harvesting, portfolio re-balancing, executing transactions, getting consolidated views of accounts across financial institutions, receiving investment advice, tracking performance against life goals, tracking performance against financial benchmarks, reviewing account information, updating personal account information.
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