Wealth management is an industry with established rules and traditions. For example, one of the first private banks that provided asset management services – the British Coutts – has been operating since 1692.

However, recently even this conservative industry is experiencing significant changes. The work of asset managers is complemented by technologies, in particular AI. A number of processes are automated; they become faster and standardized. Even now, generative AI allows you to create "co-pilots" for financial consultants – routine, but time-consuming tasks, such as opening accounts, checking legal documents, etc., are automated.

The fintech industry and its wealthtech investment offshoot are rapidly gaining momentum. According to FT Partners, as of June 2023, more than four trillion dollars were under the management of technological solutions (by investment platforms and robo advising). Like many markets, in the field of wealth management, the question became relevant: how quickly will robots replace humans?

However, not everything is so linear in capital management. The market is changed not so much by technology, but by new requests and needs of the target audience. Moreover, it is these new requests that push the technology of the financial market. Awareness of the current portrait of the target audience (capital owners) and its needs allows predicting where Wealth Management will move.

Who is the modern rich and what do they want?

To begin with, it is worth understanding who the main representatives of the target audience are. The authors of the Capgemini World Wealth Report Series 2023 distinguish several main categories of rich people according to the size of their capital: High Net Worth ($1m to $5m), Very High Net Worth ($5m-$30m), Ultra High Net Worth ($30m+).

Recently, I got my hands on an interesting study “DEFINING A NEW U/HNW ECOSYSTEM POSITIONING & LIFESTYLE STORY” by Ten Lifestyle Group company, dedicated to describing the portrait and current requests of the VHNW and UHNW categories.

The representatives of these categories are mainly entrepreneurs, whose average age is 65.4 years, and the amount of capital is about $77.7 million. 85 % of these people have earned money on their own; and for them the question of passing on the inheritance to their families was now relevant. The authors of the study note: the greater the fortune of an entrepreneur, the stronger is his desire to pass on his inheritance and the less morally prepared they are for it. For 53% of the surveyed rich, ensuring the well-being of their families is the most important motivation. At the same time, 73% are actively looking for safe and secure ways to preserve and pass on their wealth to the next generation.

Increase in digital literacy

UHNWs invest in various asset classes, while maintaining complex, diversified investment portfolios. They are actively interested in the industry of modern technologies – not only as investors in technology companies, but also as consumers of fintech services.

89 % of wealthy people surveyed by the authors of the study admitted that they spend at least three hours of personal time online every day. UHNWs have a high level of digital literacy and are interested in various innovations in the field of wealthtech. According to British 11FS Company, by the end of 2024, up to 25% of the asset management process will performed through applications. Already today, companies providing Wealth management services have intensified cooperation with the developers of such applications in order to satisfy clients' requests for digitalization of the investment process. Some applications enable investors to get access to the best investment offers from a partner network of a large number of asset managers from various companies, as well as cover the needs related to trust service, tax residency, inheritance planning, and receive legal support for individual transactions.

The trend towards digitization of lifestyle

The interests of the very rich extend far beyond investment and classical finance. According to research by Ten Lifestyle Group, more and more Ultra High Net Worth individuals are looking for safe places and conditions for themselves and their families due to high turbulence and uncertainty in the world. This involves moving, settling in new cities and even on new continents, purchasing real estate, organizing education and leisure, quick and harmonious integration into local communities of people equal in wealth, values and interests, etc.

For UHNW, it is important that the management of these processes, as well as the execution of financial transactions, become convenient and fast – ideally, it can be reduced to a few clicks in a mobile application. Currently, products that partially satisfy these requests are already being developed. Among these are applications that allow the client to manage his payments and use the services of a virtual concierge, make cashless payments despite limits and restrictions, get access to elite events in new cities, plan trips, invest in art and luxury items.

By the way, an important touch to the portrait of the modern client of Wealth Management is the active growth of demand in the luxury goods market – in 2023 it reached 1.5 trillion euros, which is 13% higher than in 2022. More than a quarter of the wealthy surveyed by the Ten Lifestyle Group named this category of investments as one of their priorities. It is interesting that 40% of global sales of goods in the luxury segment are accounted for by only 2% of the rich.

Almost every second UHNW collects art. Digitization has affected this process as well. In particular, the auction house Sotheby`s is actively working on improving its application, which allows the client to follow auctions and lots, make bids in real time and make payments online.

“Money shouts – wealth whispers”, emphasize the authors of the Ten Lifestyle Group. While millionaires continue to flaunt wealth, brands and various attributes of luxury life, ultra-rich multi-millionaires and billionaires gravitate towards silence, protection of personal data, a wide range of services in the field of cyber security, an individual approach in everything and communication exclusively in closed communities.

In the context of technology development, their main request is the maximum digitization of not only wealth management, but also life organization and maintenance affordable be their wealth. These varies from elementary procedures to complex and multi-component actions that require a deep understanding of the individual needs of a particular client. Despite multiple technological solutions in this area, many of them fail because they cover only part of the spectrum of needs of the target audience.

Ultimately, the winner will be the one who can build an ecosystem where wealth management and lifestyle intertwine, creating synergy between financial well-being and quality of life.