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Hall Road Highlights - Bain & Co's Wealth Management Update




General Advice Disclaimer: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is suitable for you and your personal circumstances. All calculations and data presented are deemed to be accurate as at the time of presentation. Any projected pro forma returns or figures on investment are intended for the purpose of illustrative projections to facilitate analysis and are not guaranteed. Past performance is not an indicator of future results


Firm: Bain & Co


Author: Markus Habbel, Daniel Jones, Christine Weber-Vossen


Hall Road Highlights:


  • Financial services firms should look to Wealth Management as the new revenue driver

  • Customers continue to surge, expecting assets & revenue to double in next 10 years

  • Adviser efficiency is key – Morgan Stanley as the model over last 10 years.

  • Where will growth come from? APAC & US Gen Y & Z.

  • Profile of this new client – self-directed and self-educated (70% over $500K fit this profile).

  • Digital/Human hybrid model preferred for this new client base (fig 2)

  • New products for wealth firms to concentrate on: ESG offerings (75% cited need) via Direct Indexing. Private Markets (via Wealthtech implementation), Digital Assets (1-5% of AA), Retirement Solutions (innovative decumulation)

  • New delivery models – reach them at critical moments via technology and high touch model (notes the luxury good industry as example of digital engagement, Gucci Prada etc)

  • Adviser focused to customer first is the new model as digital tools can mean greater impact when a human is needed (complex or critical moments) “Adviser for tricky decisions” is the new term. The new adviser will need clarity on the client’s situations accurately and timely – this should be the focus of the firm’s tech infrastructure.

  • Customer advocacy is seen as the new model


Three viable business models –


  1. Integrated Platform provider (UBS Wealth, Morgan Stanley) as the acquire more bolt on firms (Wealthfront etc).

  2. Customer Acquisition specialist (Vanguard) – access to clients via hyper efficient adviser network and upsell new products (Digital Advisor, Personal Advisor businesses)

  3. Specialist Provider (Silicon Valley Bank) – a value prop for a specifically defined client type. Advising those that are not well served by broader offerings. SVB bough Boston Private as a vehicle to service tech founders.


Questions to for wealth managers:


o How do we attract this client before competitors do

o Essential technology investments to be made for this client

o Are our advisers and investment team equipped to service them?

o Is our firm attractive to these clients

o What’s our point of difference?

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