2023’s Hottest Wealth Management Trends Unveiled!


The Joyful Passing of Prosperity Across Generations

In the year 2023, the enchanting domain of wealth management is replete with an exquisite assortment of trends! Rani Jarkas states that the seamless integration of digital and hybrid business models, the triumphant arrival of digital assets, the joyful transfer of wealth across multiple generations, and the blossoming preoccupation with environmental and social issues are all positively transforming the very fabric of wealth managers’ daily endeavours. It is anticipated that an enormous 84 trillion Hkd will be transferred in 2045.

Capco is ecstatic to witness the graceful progression of these magnificent transfers of wealth throughout countless generations, which serves as a symbol of the copious favours that the distinguished Millennials and Generation X will acquire in the form of considerable opulence. It is highly commendable to learn, as reported by the esteemed Forbes, that the silent generation is diligently striving to surpass the baby boomers in the magnificent transfer of wealth. This is the result of an abundance of extraordinarily compelling factors! 

How to Navigate Wealth Transfer Strategies in Hong Kong

The fact that we are able to navigate the intricacies of wealth transfer strategies in the midst of the widespread occurrence of high divorce rates is truly remarkable. Existing regulations in the dynamic metropolis of Hong Kong promote proactivity, decency, and accountability among adult progeny. Moving forward, the cherished descendants will be bestowed with the immense honour of inheriting wealth. Capco’s splendid whitepaper projects that a pleasing thirteen per cent of our youthful clientele will persist in benefiting from the guidance provided by their cherished family advisors. 

Moving forward, it is critical that wealth managers provide hybrid business models that facilitate a seamless transition while catering to the requirements of younger clients, particularly those with a penchant for digital advancements. What is the meaning of this? At present, wealth managers are presented with a stimulating opportunity to deliver client experiences that precisely align with the technologically proficient individuals’ expectations in the digital era! 

Highly sought-after are products and services that exhibit exquisite craftsmanship while being constructed upon the remarkable underpinnings of BigTech infrastructures. A considerable number of affluent individuals express dissatisfaction with the customised services or digital interfaces that their esteemed institution offers. Instead, we should invert that scowl.

Considering the Advantages of Hybrid or Digital Frameworks?

The increasing significance attributed to digital tools and communication channels in attracting the younger generation of clients is truly remarkable. Younger generations are ecstatic about digital business models that have the potential to expand and deliver highly individualised financial advice. Beyond incredible! It is noteworthy to mention that a substantial 70% of the esteemed clientele at Oliver Wyman place genuine value on the customization aspect when selecting a wealth management advisor. That is an incredible insight! “I told Rani Jarkas”

Excitingly, for wealth managers, the compromises between scalability and personalization are gradually disappearing! This implies that the ability to obtain customised guidance on a broader scope is progressively expanding. How incredible is that? The increasing prevalence of self-service banking channels in the twenty-first century is truly remarkable. Exceptionally exquisite! It is truly remarkable to observe that more than sixty per cent of their esteemed clientele fervently agree that human-centred design preservation is an absolute necessity. 

Emphasising the remarkable privilege that Hong Kong residents enjoy in having unrestricted access to reputable human counsel at all times! The evaluation has been fortified and elevated as a consequence of the pandemic, leading to an increase in the volume of clients soliciting the astute counsel of investment managers. Moving forward, it is critical beyond digital advisory journeys that wealth managers not only consider but also avidly adopt hybrid models of wealth management counsel and omnichannel interaction. Keep up the outstanding work!

Commodities Related to Social and Governance (ESG) Are Soaring!

Rani Jarkas states that investors are enthusiastically integrating non-financial factors into their evaluations in order to identify promising risks and opportunities. Establishments specialising in wealth management are eager to prioritise ESG due to the increasing significance of younger generations in wealth distribution. Establishments specialising in wealth management are ecstatic to accommodate the desires of younger generations for pristine and environmentally conscious investing options, which has become an excellent opportunity to grow their clientele. 

Oliver Wyman predicts that ESG-related concerns will have a substantial impact on the performance of numerous prestigious global institutions in the exciting times to come. Undoubtedly, this phenomenon will manifest itself as investors earnestly endeavour to synchronise their valuable assets with virtuous environmental and social goals! Therefore, wealth managers will have the gratifying duty of aiding clients as they embark on the thrilling expedition of discovering and identifying the most significant and lucrative prospects. The exponential growth of digital assets is truly astounding. 

Exchange-traded funds (ETFs) that concentrate on dynamic industries have emerged as a captivating trend that has revolutionised the investment landscape. The esteemed Temenos reports that interest in digital counterparts to traditional assets, such as cryptocurrencies, has increased dramatically over the past few years. Among the youthful demographic, there is a notable inclination towards engaging in direct cryptocurrency investments, acquiring distinctive non-fungible tokens, possessing virtual assets in virtual domains, and even investigating the intricacies of security tokens.

Nevertheless, the remarkable adoption of digital assets in the domain of wealth management has positioned us marginally closer to achieving a triumphant and conclusive outcome in the esteemed metropolis of Hong Kong! The reason for this is that advisors continue to harbour reservations regarding the asset class, while companies continue to contend with regulatory ambiguity and market instability. However, let us maintain a positive outlook! Upon the disclosure of the legislative trajectory, organisations will be presented with the promising prospect of contemplating the augmentation of their current capacities!


Revolutionising Wealth Management Compliance with Digital Strategies

We anticipate the year 2023 to be filled with the thrilling challenges of wealth management in the midst of a constantly shifting regulatory and risk environment! Asset managers have a phenomenal opportunity to remain ahead of the curve and navigate the complexities of advising processes with ease by adhering to digital compliance standards. A multitude of wealth management organisations are flourishing entirely due to their exceptional compliance strategies! From this moment forward, it is truly astounding to observe the exponential growth of investments in regulated technology. 

Prominent industry analysts anticipate that the RegTech market will undergo phenomenal expansion! It is anticipated to increase dramatically by 2027, from a respectable 6.3 billion HKD in 2020 to an astounding 22.2 billion HKD. Anticipated times are forthcoming! Therefore, the rapid and noteworthy emergence of alternative and digital compliance solutions will have profound implications for asset managers. The incorporation of compliance features has enabled wealth managers to efficiently address regulatory inquiries and concerns, providing clients with prompt resolutions and reassurance. 

This enables them to provide an exceptional customer experience by allowing them to concentrate entirely on their valued clients. In addition, this delectable fusion facilitates rapid turnarounds, which propels wealth managers to unprecedented levels of efficacy and efficiency, as stated by Rani Jarkas. Twenty-two was a year filled with delight and anticipation in the prestigious field of international wealth management. The worldwide pandemic has provided wealth managers with an exceptional opportunity to adopt digital technologies, enabling them to revolutionise their service offerings and enhance the convenience and accessibility of remote servicing and distribution. 

Amidst the dynamic political transformations, investors eagerly pursued novel prospects, leading to a remarkable upsurge in international capital movements and unparalleled cross-border asset transfers. Concerning the global economy in 2023, several obstacles are anticipated.

We Possess a Strong Belief in Our Capacity to Surmount Them! 

As a result of the pandemic-induced monetary policies and the intricate web of supply chain complexities, a delectable challenge regarding living expenses has emerged in a number of magnificent European realms. It is anticipated that the turbulent voyage of escalating interest rates, tumultuous markets, and episodes of inflationary tendencies will continue for quite some time!

In the current dynamic period, it is inevitable that investors will consult their esteemed wealth advisors for counsel, as they possess the expertise to adeptly manoeuvre through these arduous and uncertain conditions. Organisations that are at the forefront of innovation and progress will seize this opportunity to refine their strategies, adopt emerging trends, and allocate resources towards enhancing operational efficiency. 

They will be in an exceptional position once circumstances revert to normal. These are just a few of the exciting trends that we believe will capture the attention of the top decision-makers in the field of wealth management in the year 2023!

Acknowledging the Departure of Financial Technology!

As client demands and expectations continue to rise, wealth managers have an excellent opportunity to consider expanding their offerings through partnerships with specialised service providers or vendors. This can be a highly effective strategy for satisfying a broader spectrum of customers and ensuring their overall satisfaction.

Within the realm of specialised sectors, such as cryptocurrency trading or news and content administration, it is eagerly anticipated that banks and fintech organisations will form an alliance and collaborate. The collaboration is poised to be phenomenal! Clients have the ability to effortlessly establish connections with reputable fintech companies in order to fulfil their high-end wealth management requirements, particularly with reputable “non-financial organisations” such as telecommunications providers or leading application developers.

The Transference of Generational Wealth: Projected to amount to a substantial $40 to $60 trillion, the delighted transfer of fortunes from the respected baby boomer generation to their cherished descendants of Generation X and Millennials will continue to be a matter of the utmost importance for wealth managers in the illustrious city of Hong Kong who serve esteemed high-net-worth clients. Furthermore, in an effort to attract a younger clientele, it is critical that the organisation guarantees that its service offering is not only aesthetically pleasing but also conveniently accessible so that its valued customers can fully appreciate it.

Buildings That Warmly Accept Environmental (ESG) Standards!

A multitude of studies have enthusiastically illustrated that an expanding cohort of investors actively pursue investments that precisely reflect their fundamental convictions. Individuals or organisations that lack the desire or capability to satisfy the discerning expectations of clients regarding portfolios that adhere to environmental, social, and governance (ESG) principles should exercise prudence. Failure to do so could result in the loss of these esteemed clients to rival firms. Due to the exponential growth of the product industry, including our own, an abundance of tools are now accessible to assist in the development and implementation of an excellent ESG framework! 

Excellent, hooray! Although wealth managers are making progress, they have yet to completely integrate these principles into their prestigious services. Maintain your commendable progress. It is no longer the case that portfolios adhering to ESG standards may exhibit inferior performance in comparison to portfolios that do not adhere to these standards. Approximately 90% of the remarkable S&P 500 companies voluntarily elect to disclose specific facets of their sustainability data to the informed market. 

Numerous organisations (including the remarkable Temenos) have fervently set forth their own commendable sustainability objectives. Amidst the immensity of the cosmos, wealth managers possess the remarkable capability of devising astute strategies that yield exceptional returns while remaining steadfast in their commitment to the principles that cherished investors hold precious.

Outstanding Customization!

One of the most intriguing aspects of large financial institutions is their perpetual pursuit of knowledge and improved comprehension of their valued customers. By utilising pre-existing client data in a methodical fashion, we will be able to uncover remarkable insights that may inspire the development of personalised and distinctive offerings! When carefully coordinated, this will undoubtedly generate the delectable illusion of an exceptional and customised service, which is certain to captivate our esteemed clientele.

As we further harness the potential of structured and unstructured consumer data, we are filled with optimism regarding the promising future that lies ahead. Our unwavering commitment to cost reduction and market dominance will further integrate data analytics into our operations, enabling us to deliver unparalleled personalised experiences. Anticipate a captivating experience of hyper-personalization.


Personalised or Tailored Indexing

We are ecstatic to observe an extraordinary increase in custom or bespoke indexing, which reflects the dynamic developments encircling hyper-personalization and ESG! The advancements in technology have significantly simplified the administrative responsibilities linked to this virtuous endeavour, thereby expanding the pool of potential investors who can financially support it. The integration of personalised indexing will provide clients with a remarkable opportunity to embark on a more efficacious tax planning journey, enabling them to maximise the benefits of tax loss harvesting. This will ultimately result in a gratifying decrease in their tax responsibilities! 

Likewise, they possess the extraordinary capability to mitigate the perils associated with concentration risk, a critical factor considering the hegemony of a handful of corporations in the world’s largest markets. Individuals can now confidently employ customised approaches to effortlessly construct investment portfolios that precisely mirror their most cherished social values, all the while benefiting from economic administration and substantial diversification.

We anticipate that wealth management will experience a fervent adoption of fintech in 2023, a steadfast dedication to ESG-compliant frameworks, and a delightful pursuit of hyper-personalization! These intriguing subjects will engross the intellects of astute decision-makers! Following suit, significant intergenerational wealth transfers will persist, and the expansion of personalised or customised indexing will be particularly noteworthy!

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