WHERE WILL YOUR WEALTH TAKE YOU NEXT?

Here at Scorpio HQ in London, our colleagues come from all four corners of the globe: Tasha was born in Ireland, Ruohan lived in Canada, Caroline in the Middle East, Jenny in Ukraine and New York, and AJ in Canada and Barbados. Elizabeth spent 6 years in Nigeria, Val is from Siberia, Laura from Italy, Liz from Malaysia, and Denisa from Slovakia. And you may know, Nik recently moved from London to work for our team in Singapore.

As you can see – relocating to live and work is now part and parcel of modern life. And notably, this is a growing trend for high net worth individuals (HNWIs) with many relocators finding themselves, on average, EUR1 million wealthier than those who stay at home.

Our latest research, in conjunction with OneLife, indicates that one in four HNWIs have moved at least once from their country of origin, and a further 13% intend to relocate in the future. Digging deeper, we see the share of current (43%) and future (20%) relocators rise among the under 35s – suggesting there is increasing urgency, and indeed opportunity, for wealth managers to develop solutions and services that better meet the needs of the internationally mobile wealthy.

This however is no easy feat as their financial requirements span the complexity spectrum – from transactional elements like day-to-day banking through to more intricate strategic areas like managing international tax commitments.

As such, their wealth management wish list also reflects the breadth and depth of this. Tax advice, for example, is deemed requisite for an international wealth proposition among almost half of the relocator segment and is especially important for over 55s (see Figure 1).

Meanwhile, younger HNWIs place more emphasis on products which can facilitate their tax efficiency. Indeed, when compared with the HNW average (27%) and over 55s (18%), we see a significantly larger proportion of millennials (39%) believing life assurance is a necessity for an international wealth management proposition.

Figure 1: Which specific products and services would you EXPECT to be available to you through an international wealth management proposition?

Relocation figure 1

Source: OneLife and Scorpio Partnership, “#Success in #Relocation: The Relocation Journey”

In spite of these proposition preferences, there is a sense that wealth managers are currently falling short when it comes to serving the international wealthy – both in the run up to their move and during the process.

For example, only one in three HNWIs say they discussed their financial concerns with their wealth advisor prior to the international move, and just 40% feel that their investments are as tax efficient as they need to be.

And while older HNWIs are more likely to stay with their pre-existing financial advisor following an international move; the same cannot be said for under 35s – 41% of who have no reservations about changing to a new institution.

What’s more, approximately a third of them believe that their current wealth manager would not understand their international financial needs and that the digital services currently on offer are incapable of helping them manage wealth remotely.

To improve the offering to this growing group, wealth managers need to reconsider both their international advisory capabilities and the delivery model.

This is critical because even though an international lifestyle may not be perceived as having a material impact on wealth creation – the relocators we surveyed are wealthier than those who stayed at home.

Firms who develop the right proposition, advice and delivery model for wealth’s wanderers could therefore stand to be richly rewarded.

This research, undertaken by Scorpio Partnership and OneLife, considered the views of 770 HNWIs from Belgium, Denmark, Finland, France, Portugal, Spain, Sweden, Switzerland and the United Kingdom. The average wealth of participants was EUR2.76 million.

 

Thought of the week:

“Life is like riding a bicycle. To keep your balance, you must keep moving.” – Albert Einstein

 

News from the world of wealth:

HSBC appoints ex-Google engineer as WM CIO– Finextra

Blockchain gets a Wall Street win – Bloomberg

Singapore and Abu Dhabi extend cross border banking operations – Private Banker International

The changing role of ETFs in private client portfolios – Professional Wealth Management

Top banks create third-party risk management company – Finextra

 

Annie Catchpole Scorpio Partnership

Author: Annie Catchpole, Director at Scorpio Partnership.

Background: Annie works on the research team at Scorpio and leads projects with a marketing and market insight focus. She runs the Futurewealth insight programme, a research and thought leadership initiative on the needs of the global HNW.

Education: Her passion for research was cultivated while undertaking a Master’s degree in History from Durham University with a special focus on the early modern period.

And at the weekends: Annie enjoys hunting out London’s weirdest culture; ranging from crawfish boils to poetry slams, stand-up comedy to gin tasting. She is also a sports fan and plays netball every week.

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