SINGAPORE - Asia’s population of affluent individuals is growing rapidly and the region’s wealth management sector remains extremely ambitious, but the latter’s ability to realise their targets may fall short unless they improve their quality of service.

This is according to a report titled Future Of Asia Wealth Management, by global consultancy Accenture.

Based on a survey done in December 2022 and January 2023, the paper published on July 28 notes that Asian wealth managers – which refer to mainly private bankers and financial advisers – have targeted increasing assets under management (AUM) by 1.6 times and plan to grow revenue 1.4 times by 2026.

But many firms – if not most – are falling short due to their inability to deliver improved client experiences.

According to Accenture, two vital areas that need attention are digital offerings and quality of advisory services provided by relationship managers (RMs).

Accenture noted that investors ranked digital and mobile offerings for wealth management very highly, but less than half (47 per cent) of those surveyed expressed satisfaction with their firm’s mobile app performance.

This is despite the fact that a “high-quality channel experience” was cited as the most important consideration when selecting a wealth management firm – even outranking its reputation, track record, RM quality or recommendations from family and friends. 

“The mobile app is the most common channel clients use and is of fundamental importance to nearly all investors in our research, regardless of demographic, market and wealth band,” the report said.

“However, most existing mobile apps score poorly with our survey respondents due to (among other things) bad journey design, capability coverage, bugs and speed, a lack of personalisation, and missing asset classes.”

It added that proactive wealth management firms needed to rethink their mobile app to provide the kind of services clients want, including hybrid mobile-RM support.

Mr David Wilson, Accenture’s wealth management lead for growth markets, said that a well-designed, reliable mobile app with a wide array of features and functionality is “imperative” to the growth and retention goals of wealth management firms in Asia.

“Poor digital experiences not only frustrate investors, (but they also) place an undue burden on relationship managers to pick up the slack of tasks that can and should be automated, limiting their time to handle more high-value client work,” he said.

The second area where wealth management falls short is the quality of services provided by RMs.

Accenture noted that RMs are key to firms’ growth ambitions, and clients value their hands-on counsel. But only about half of the clients surveyed expressed satisfaction with the service quality of RMs.

“RMs continue to struggle with low productivity and spend most of their time on non-revenue-generating tasks, according to our Asia Relationship Manager Survey,” Accenture noted.

“The root causes are mostly straightforward: Their job scope is too broad, and they lack the digital tools and empowerment to meet clients’ expectations.” 

It added that in 2022, most firms struggled to provide a suitable next-generation advisory offering, and this has continued into 2023.

The consultancy said that giving RMs the necessary digital tools and automating non-revenue-generating work or offloading it to other staff would “fix the broken RM model”.

In doing so, wealth management businesses could unlock higher loading ratios, boost productivity and generate a potential 50 per cent saving on RM costs, which usually comprise 60 per cent to 70 per cent of the overall cost base.

“It could also see an up to 20 per cent rise in the client service experience… which correlates directly to higher AUM capture,” the report said.

The report was based on a survey of some 3,700 affluent and high-net-worth individuals and investors across 12 markets: Australia, China, Hong Kong SAR, India, Indonesia, Singapore, Japan, Malaysia, Thailand, United Arab Emirates, Vietnam and Saudi Arabia. It also incorporated feedback from 655 relationship managers and investment professionals, and more than 20 C-level executives at wealth firms and private banks.

According to Accenture’s Market Sizing Model, about 75 per cent of Asia’s affluent individuals have between US$100,000 (S$133,000) and US$1 million in investible funds, and collectively control US$163.5 trillion in assets. They number some 854 million individuals, or 99 per cent of the total Asian wealth segment.

Another 15 per cent have between US$1 million and US$30 million. The remaining 10 per cent control in excess of US$30 million in investible funds.