Wealth management strategies focusing on the next 5 years highlight succession planning as the important topic du jour. And with a growing number of HNWIs and relationship managers approaching retirement age – it’s easy to see why.

The transfer of assets to the next generation therefore needs to be considered from both of these angles – the customer’s personal wealth and the relationship manager’s book of clients.

Embedded in these conversations is the need to reach out to and connect with the next generation of HNWs. Perhaps unsurprisingly, given the media buzz, many of today’s conversations focus on Millennials as the next frontier for customer acquisition. Wealth managers recognise their demanding digital expectations, their shrinking patience, and even their fickleness in jumping from one provider to another. But are they really the ‘next’ generation of HNWIs?

Research from Scorpio Partnership shows that although all HNW age groups experience pivotal life events, one group in particular – the 40 to 55 year old Midults – stand out the most (see Figure 1).

This is because it is within this age range that the highest number of life changing events occur; many are complex in nature, require discretion, sensitivity and technical expertise. So as a consequence, Midults show greater propensity than other segments to seek advice, and are the real ‘next’ generation of wealthy individuals.

Figure 1: Pivotal life events of HNWIs  

Midults are time poor, often juggling a demanding career with educating their children, paying off the mortgage on their home (or two), looking after elderly parents (current wealth clients), while trying to maintain their own sanity and some semblance of a personal life. They grew up without digital, but have had to embrace it – some better than others.

While their expectations are not as demanding as those of Millennials, for example, their satisfaction scores tend to be much lower than those of either the impatient Millennial, or more experienced Baby Boomer clients – suggesting the real unrecognised opportunity is actually in this space.

Understanding the under 55s is therefore increasingly critical. And given their busy schedules – ‘ease’ will be the biggest driver of client engagement.

Capturing the attention of these individuals means re-examining the key factors of the client journey that are important to them, and ensuring that the firm and its advisers are aligned in delivering their proposition to this key segment. This applies not only to the service delivery once a HNW becomes a client, but also to the factors that attract a Midult in the first place.

Advisers need to be equipped with the knowledge and expertise necessary to win the hearts and minds of these individuals, as well as understanding of the kind of service and communication Midults actually want. For example, it will not be a case of adopting either digital or face-to-face; it will be about finding a blend of channels that are most appropriate – in some cases literally down to the time of the day that the Midult wishes to address their finances.

Given that Midults’ servicing demands are lighter than those of other segments, yet satisfaction scores visibly lower, wealth managers would be wise to narrow this gap and pay particular attention to this generation.

Thought for the week:

“Every day is a bank account, and time is our currency. No one is rich, no one is poor, we’ve got 24 hours each.” Christopher Rice

News from the world of wealth:

Bank of America tech chief describes changing views on AI and FinTech – Forbes

Esoteric securitisation returns to Europe – FT

Robos add socially responsible investment – Wall Street Journal

Bank of England tells banks to push on with ring fencing – Reuters

EU may require reporting of tax-cutting advice – MLex


Author: Caroline Burkart, Director at Scorpio Partnership

Expertise: Caroline is responsible for the execution of assignments drawing on her detailed market and business management experience in private banking over 23 years. Her project work has covered a diverse range of assignments across the globe.

Background: Formerly a senior private banker with Credit Suisse in London, Caroline has comprehensive business management experience gained as Head of International Private Clients in London. Caroline’s time is stretched through flexing her management and negotiating skills with her three children! In her spare time (?) her interests used to focus on travelling, photography and the equestrian world.

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