Advisor.ca | How 2008 Changed Wealthy Investors
After the financial crises in 2008 and 2009, high-net-worth (HNW) individuals are cautiously returning to the markets. And, as they do, they are pushing the envelope, increasing their expectations of their wealth managers, requesting more information, more transparency and more specialized advice.
And wealth managers are keenly listening. This emerged during a meeting this week where 80 Chartered Financial Analysts (CFA) gathered in Toronto to learn how to stay competitive in a rapidly changing environment and develop skills and solutions to successfully attract and serve high-net-worth clients.
The CFA designation is the gold standard in the wealth management industry around the world.
“High-net-worth individuals have a cautious pursuit to returns,” says Petrina Dolby, Vice President, CapGemini. Dolby presented findings from the World Wealth Report, a global benchmarking study that monitors HNW investor behavior. They talk to investors advisors from around the world. Dolby says there is a significant difference in investor behavior coming out of the financial crisis.
The biggest change since 2008 is HNW investors are far more engaged in their financial affairs, says Dolby. They’re more conservative, having been personally affected by the financial meltdown. Emotion drives their investments decisions, not so much logic. As a result, they’re not relying solely on their wealth managers anymore. They doing more upfront research, reading product disclosures, asking more focused, educated questions. They know more about fees. They’re not just relying on wealth managers for advice. They’re forcing advisors to do more homework before meeting them. This will raise the bar on client service in the financial services industry.