Emerging high net-worth individuals (HNWI) want more sophisticated products from financial advisers, as they look to emulate their sole-HNWI counterparts, according to Merrill Lynch and Capgemini Financial services.
Emerging-HNWIs have US$750,000 in investable assets, compared to sole-HNWIs who have US$1 million or more.
Emerging-HNWIs are currently given basic products and services from planners, Capgemini senior manager Wayne Li said at a briefing yesterday.
In future they will want products including exchange-traded fund-of-funds, and hedge funds, like their sole-HNWI counterparts, prompting advisers to boost their suite of offerings for emerging HNWIs.
“What we have noticed is that as wealth management providers are able to better service [emerging HNWI’s], they are able to help their clients move up into a higher wealth tier,” Li said.
HNWIs themselves are forecast to have 11 per cent of their asset allocation in alternative investments, including foreign currency, private equity and structured credit, by 2009, according to a Merrill Lynch and Capgemini survey.
That is up from 8 per cent at the end of 2007, the data showed.
Money poured into fixed-income will also climb to 24 per cent in 2009, from 21 per cent in 2007 – while real estate investment will drop to 13 per cent in 2009, from 20 per cent in 2007.
The number of emerging-HNWIs climbed 6.4 per cent in 2006/2007, while sole-HNWIs increased 7.1 per cent in the same period, according to the Capgemini Lorenz 2008 curve analysis data.
