These changes call for advanced and specialised strategies from wealth managers who understand the intricacies of managing wealth in a globalised economy.

David Vacani, chief executive of Beacon Global Wealth Management and chairman of The Federation of European Independent Financial Advisers (FEIFA), provides insights into the current trends and considerations for wealth managers in this dynamic field.

Impact of global economic changes on HNW clients

The shifting global political and economic landscapes significantly affect HNW clients, who often have diverse financial interests across various countries.

They are especially vulnerable to market fluctuations and currency exchange rate volatility, heightened by geopolitical instability. Wealth managers catering to these clients must offer globally informed, personalised advice, addressing the unique investment needs and objectives of HNW clients in a complex financial world.

Investment dynamics in emerging markets

Emerging markets offer both potential opportunities and risks for HNW clients. These markets can yield higher returns but also come with the risks of political instability and economic unpredictability. Wealth managers must adeptly navigate these challenges, tailoring investment strategies to match their clients’ unique risk profiles and investment ambitions.

Challenges of evolving tax regulations

HNW clients often face complex tax scenarios due to their diverse assets and investments, further complicated by the ever-changing global tax landscape.

The introduction of new international tax regulations and cross-border agreements highlights the necessity for compliance and tax efficiency. Wealth managers must be proficient in international tax law to ensure their clients’ portfolios are compliant and optimised for tax efficiency.

Political changes and their influence on wealth management

Political shifts and changes in international relations significantly influence the investment decisions of HNW clients. Changes in global trade policies, tax treaties, and foreign investment regulations can substantially affect their wealth. Wealth managers must stay informed of these political changes and adapt strategies to protect and enhance their clients’ financial interests.

Adapting wealth management strategies for a global economy

In today’s dynamic global economy, wealth management strategies must be adaptable and flexible, particularly for HNW clients. Wealth managers must be capable of swiftly adjusting their strategies to accommodate the complexities of managing assets across different jurisdictions and market conditions.

Sustainable and responsible investing for HNW clients

Sustainable and responsible investing (SRI) is becoming an increasingly important aspect of wealth management. HNW clients are more interested in aligning their investments with their values, contributing to positive societal and environmental outcomes. Wealth managers need to be knowledgeable about SRI, integrating it into investment portfolios while achieving financial objectives and managing risks.

Continuing education and compliance in wealth management

Maintaining compliance with international financial regulations is crucial in managing the wealth of HNW clients. Ongoing education in global compliance standards, understanding diverse regulatory frameworks, and keeping up to date with changes in international tax laws and financial regulations are essential. Emphasizing continuous professional development and implementing robust compliance strategies are vital for ethical and legal financial management.

The role of technology in modern wealth management

Technology plays a vital role in managing the wealth of HNW clients. Digital tools and platforms are essential for effective, timely portfolio management and advice, especially for clients with global financial interests. Wealth managers must utilize these technological advancements to enhance traditional financial services, ensuring efficient and comprehensive wealth management.

Effectively managing the wealth of HNW clients requires a deep understanding of their unique challenges and needs in a globalized world. Staying informed about global economic trends, mastering complex international tax regulations, leveraging technology, and prioritizing ongoing education in compliance is critical for wealth managers. This ensures sophisticated, adaptable, and personalized services, offering significant opportunities for wealth managers adept at navigating this intricate landscape to guide their clients toward financial success.

This article was written for International Adviser by David Vacani, chief executive of Beacon Global Wealth Management and chairman of FEIFA.

Countries in Asia Pacific also share two demographic factors that impact the services provided by wealth managers: generational wealth transfer and a large expatriate population.

In order to thrive, wealth managers need to look beyond meeting the current needs of investors and focus on building long-term investment plans, brand familiarity and trust to win and retain the next generation of investors.

Additionally, the wealth management needs of Asia Pacific’s expat population should not be overlooked. Many prefer working with a financial institution they are familiar with. They want quick, simple access to their assets while working overseas and to receive the same client experience across locations. It is therefore important for regional wealth management firms to create a seamless client experience for clients who work in different locations. This will become all the more important, as younger investors are more likely to explore work opportunities abroad.

Preparing for the next gen

Markets in Asia Pacific are also experiencing sustained economic growth and rising household incomes, resulting in a larger middle class and a pool of newly mass-affluent investors. Private banks and wealth management firms need to act quickly to support the wealth creation taking place in Asia Pacific.

It is also vital that they properly guide and advise new investors to build loyalty and trust at an early stage, especially since some of these mass-affluent investors may be the ultra-high net worth investors (UHNW) of tomorrow.

The new generation of investors want to receive the same quality in wealth management services as their (U)HNW peers in terms of advice, performance and personalisation. There will be visible differences, and this is mostly due to the fact that these younger generations often have different expectations from their parents, including a greater preference for digital technologies as well as a more hands-off approach that may even favour discretionary portfolio management, especially in China and Hong Kong.

The need to attract long-term loyalty

From a wider Asia Pacific perspective, serving this growing pool of investors at scale can put a lot of strain on relationship managers and advisers. Given the current talent shortage in the industry, with relationship managers having to oversee an increasingly large number of clients, there are still major challenges ahead for the region’s wealth managers.

Technology will play a vital role in ensuring that wealth managers can offer investors a wide range of investment services and a smooth onboarding experience. On top of that, integrating artificial intelligence solutions, such as virtual assistant technology and generative AI, to support relationship managers is what will make a difference in client loyalty.

In addition, the cloud is a key enabler of digital transformation in the finance sector. It enables wealth managers to roll out new services more quickly, increase cost efficiency through flexible pricing models, and rapidly expand into new markets. For frontend applications such as web and mobile banking, cloud technology is essential to ensure constant availability across devices. This is a demand that we see globally – not just in Asia Pacific.

An optimistic outlook

While we are optimistic about the outlook for the wealth management sector in the APAC region, there are still challenges to overcome. For countries such as Japan, where there is an ingrained conservative approach to investing, wealth managers can still encounter resistance when it comes to shifting potential clients to managed investment solutions and gaining their trust.

However, from a broader perspective, wealth managers can leverage digitalisation and improve operational efficiency, which will ultimately help them to reach and server a greater number of clients while providing a more holistic and personalized wealth management offering.

This article was written for International Adviser by Pascal Wengi managing director for Asia Pacific, the Middle East and Africa at Avaloq.

Six Degrees is an independent wealth manager for UK-based families, entrepreneurs and business leaders which it says has a purpose driven approach, cutting-edge technology and a unique client-aligned fee structure.

Founders Waller and Saiman are committed to addressing the ‘High-Net-Worth Advice Gap’ in the UK while offering clients clear mobile visibility over their entire financial lives through the Six Degrees app.

To read more on this topic, visit: 1 in 30 HNW individuals relying 100% on their homes to fund retirement

The firm’s investment philosophy favours an evidence-based approach to index-investing and its pricing structure will significantly reduce clients’ costs it reported.

Alongside Waller and Saiman, Victoria Sena joins as chief operating officer who has previously worked for the Bank of England and a boutique asset manager.

Six Degrees has also appointed three members to its Advisory Council which includes Fleur Hicks, Ian McCaig and Matthew Truman.

The latest Saltus Wealth Index surveyed 2,005 people with investable assets of £250,000+ which found that on average respondents expected their property to contribute 44% to their retirement funds.

With house prices falling by 4.7% and the slowdown of the housing market in the last six months Saltus reported that this raises significant concerns about the retirement plans of many HNW individuals.

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Megan Jenkins partner at Saltus, said: “ These findings are alarming as relying solely on property for retirement planning is not a recommended strategy. The cost of purchasing a new home may eat into funds intended for retirement and the unpredictability of the market may result in the need to sell at a lower price than anticipated due to short-term market conditions out of their control.

“There is also a significant emotional aspect to consider, with an understandable attachment people often have to their homes making it difficult to downsize when necessary.

“The recent decline in house prices and challenging market conditions underscore the importance of diversified retirement planning, particularly for HNWIs. Relying solely on property to fund retirement carries significant risk and it is crucial for individuals to have a well thought out and diversified plan that takes into account both the financial and emotional aspects.”

Equanimity has 12 employees and offers advice predominantly to female, high-net-worth clients and business owners across financial planning, wealth management and financial protection.

Atomos will work closely with the IFA firm to focus initially on enhancing services for clients experiencing significant life changes.

The business will look to increase its offer to people who have not had access to financial advice in line with the FCA’s focus on improving outcomes for under-served or vulnerable customers.

Chris Kraft, chief commercial officer at Atomos, said: “This is a key strategic acquisition for Atomos and will allow us to leverage Equanimity’s expertise in specialist advice and roll it out nationally across our regional offices. In this way, we’ll be able to support more of our clients through specific life events and challenges.”

This comes almost a year after Atomos confirmed to International Adviser that it was in the final negotiation stage with eight financial advice businesses.