Wealth management firms told to target social media as they face fintech challenge

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The UK was found to be the fifth biggest nation by population of high-net-worth individuals (Source: Getty)

Wealth management firms are being encouraged to up their game on social media to better cater for the digital needs of high-net-worth individuals (HNWIs).

Capgemini’s 20th World Wealth Report also warned fintech companies are “making inroads along the entire expanse of the wealth management lifecycle”.

“Firms need to be making progress on all aspects of digital maturity to ensure they remain relevant to clients who may be wooed by technology-driven competitors,” the report said. “Nothing less than a high level of digital maturity will be adequate in the face of digitally native competitors.”

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Capgemini, which surveyed more than 5,000 high-net-worths and around 800 wealth managers and financial advisers, suggests firms need to “take bold steps to overcome resistance to change”.

“When we asked wealth managers what the number one digital capability they want from their firms is, I was actually quite surprised that prospecting through social media is their number one demand,” Capgemini’s David Wilson told City A.M. “It is also the area that had the biggest satisfaction gap for wealth managers.”

Elsewhere, the report found the UK was the fifth largest country for number of HNWIs, with 553,000. This was up one per cent between 2014 and 2015, a slower rate of growth than the four countries above in the table: the United States, Japan, Germany and China.

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Looking forward, though, and the UK’s role was more significant.

Respondents to the study named the UK as the fourth most important country for driving HNWI wealth growth before 2025, behind China, the US and India.

Wilson said: “Considering how small the UK is in terms of overall population compared to those other three super-powers, I think it's quite a telling point that the UK is very much in there, is seen as a market-driver.”