Wealth managers are helping high net-worth individuals rake in huge and increasing investment returns — and that trend could well continue with the potential entrance of big technology firms into the investment advisory space.
“No one knows yet what the future holds. Will Google and Facebook want to come in?” David Wilson, head of Asia wealth management at financial advisory Capgemini Global Financial Services, told CNBC’s “Squawk Box.”
However, the future of wealth management will “absolutely be based on artificial intelligence,” he said.
And that’s exactly the tech giants’ game.
“The depth of data that they have … their retailing experience, their social experience, and being able to blend that to put very customized propositions in place” could meet high net-worth individuals’ demand for quality wealth advisory, according to Wilson.
But that does not mean that the sector will be fully automated, he said. While technology can help meet the demand for quality financial advice, high net-worth clients are demanding more than just great returns — and that’s where the human touch comes in, according to Wilson.
High net-worth individuals have seen “astronomical returns” on portfolios overseen by wealth managers, Wilson said. According to a World Wealth Report by Capgemini this week, asset managers of wealthy clients reaped returns of 24.3 percent on average. In Asia, excluding Japan, those returns were at 33.0 percent.
The magnitude of those returns is surprising even as investors have, at large, profited from the year’s global rally, Wilson said. According to the report, over half of high net-worth individuals said they were open to having their wealth managed by big tech firms like Google and Facebook.
Major tech giants have hinted about moving into financial services and some have already moved into the mobile payments space. Facebook and Google were not immediately available for comment when asked about any future plans by CNBC.
Despite asset managers’ expectation-beating results on investments, high net-worth clients said that they were only “modestly satisfied” with the performance of their advisors, Wilson said.
“The big reason, I believe, is the lack of personalization in some instances of the experience,” he said, adding that the ideal model would be a hybrid that blends “the best of digital and personalization, with the ability to tap into the human advisor in a more modular way.”
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