The Futurewealth Report: Helpful investment technologies for wealthy HNW investors

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The Futurewealth Report 2012-2013
Helpful investment
technologies
Part 3
February 2013

FOREWORD
This is our third foray into the thoughts of the world’s wealthy on the subject of new technology.
For us, it is also the most telling. In this paper, we explore what makes investment technology
“helpful” in the eyes of the Futurewealthy.
What we find is that wealth managers may not always get it right.
Futurewealthy clients acknowledge that the technology wealth management firms use for
executing transactions and reporting is broadly appropriate. However, their responses also
suggest that much more emphasis needs to be placed on getting technology right in what we
might call the discovery phase. This phase is about understanding the client, finding out about
their needs and demonstrating the investment strategies most suited to achieving their financial
goals.
While this may not be comfortable reading for those of us in the industry, the views of 3,477 of the
world’s growing affluent population cannot, and should not, be ignored.
This process is absolutely central to building a successful, lasting partnership with our wealthy
clients. So, the message that we could do more to support these processes with different kinds of
technology is received loud and clear.
It is also interesting to see how our future clients are using technology to weigh their investment
options before they make financial commitments. Again, this highlights the need for us to fit more
helpful content into their information ecosystem to support their decisions.
There is certainly much to think about in this research, especially as we all move ever further into
the digital age.
So, once again, we would like to thank the Futurewealthy who took part in this research and for
helping us understand what has to be done to meet their needs.
Sebastian Dovey
Managing Partner
Scorpio Partnership
Shayne Nelson
CEO
Standard Chartered Private Bank
Alfred P. West, Jr.
Chairman and Chief Executive Officer
SEI

The Futurewealth Report
Helpful investment technologies
IN BRIEF
In this third paper of the 2012/2013 Futurewealth series, we explore what constitutes “helpful”
investment technology in the eyes of the Futurewealthy. More specifically, we ask what more can
wealth managers do to help those who are on the fast track to wealth creation to manage their
affairs more efficiently and become the partner of choice to support their financial decisions.
We also look at the tools the Futurewealthy rely on most to engage with firms throughout the
investment process; we ask how wealth managers are doing when it comes to delivering high-
quality investment technology; and we explore the information and devices the Futurewealthy use
to manage their money easier.
What we find is a far cry from a ringing endorsement. While wealth management firms, in general,
are not doing a bad job, per se, they are not doing a good job either. It seems much of their
technology effort goes on executing and reporting back to clients, but this is at the expense of
drawing clients into the investment process early on through technology channels. In other
words, the technology may work well mechanically, but fails to connect at a personal level.
As with the two previous papers in this series, the findings are based on the views of 3,477 of the
world’s high-net-worth population with an average worth of USD1.9 million. In the earlier papers,
we found this group of wealthy individuals are highly digitally adept. It therefore comes as no
surprise to find their expectations are equally high with respect to investment technology.
A tipping point
Just under half of the Futurewealthy feel the investment technology used by their wealth manager
is appropriate to their needs. More specifically, they believe the technology is good enough when
it comes to the execution of investment business and viewing their account holdings, but in the
discovery phase it just does not measure up.
The picture in the Americas is marginally better. But, in Europe, and particularly in the Asia Pacific
markets – where digital dexterity is at its peak, there is an urgent need for an upgrade.
Information polygamy
This upgrade needs to reflect the changing information world of the Futurewealthy. In this world,
the thoughts of other investors have almost as much influence on their investment decisions as
the views of their wealth manager. Ratings, reviews, news articles and price comparison sites are
all widely used by the Futurewealthy to confirm the course of their investment activity.
Go-go money management
Which means, in the world of the Futurewealthy, helpful investment technology is not just safe
and practical. It is informative, intelligent and, above all, it is state-of-the-art. It delivers news,
knowledge, choice and ideas. It intersects with other systems and applications. It informs using
the views of others. And, it does all this whenever, wherever and on whatever device the
Futurewealthy have on hand.

Being right half the time is better
than being half-right all the time
In brief
 It may be the 21st
century, but today just 49% of the world’s up-and-coming wealthy are
genuinely satisfied that their wealth manager delivers all the appropriate investment
technologies to meet their needs.
 This figure rises to 59%, when it comes to the technology used to execute investment
transactions. But, it falls back to just 40% when the world’s Futurewealthy look at the
technology wealth managers use to show them how to invest their money.
 America’s wealthy are generally more satisfied with their wealth manager’s use of technology.
Here, 57% feel the solutions on offer are appropriate to their needs.
 By contrast, in Europe the state of affairs is far worse. Only one-third of Europe’s fast-trackers
believe their wealth manager has the right technology to provide them with the news and
views they need to put their money to work.
 Meanwhile, in Asia – where the technology dexterity of the up-and-coming affluent far
outpaces the rest of the world – only around half of the Futurewealthy believe the investment
technology from their wealth manager is really up to par.
SOMETIMES AN IDEA CAN TIP, JUST BY CHANGING THE CONTEXT
If our research into investment technology among the world’s Futurewealthy highlights anything, it
highlights there are big risks with being half right, because being half right often causes
complacency, when it really should be an ultimate tipping point. And, when firms are dealing with
the world’s emerging elite, complacency is not an option.
As part of this series on the digital habits of the world’s Futurewealthy, we asked what they really
think about the state of investment technology from wealth management firms with whom they
work. Their answers suggest that if wealth managers want to capture the imagination of their
most valued clients, then it is time for a reboot.
More specifically, we asked the Futurewealthy about five different types of investment
technology. Their answers suggest they feel wealth managers do well at what they do best:
investing money. But, when it comes to connecting with them, and inspiring them, and showing
them how it is done, wealth manager technologies are more geek than sleek [Figure 1].

Figure 1: Quality of advisor technologies (by worth)
Do you feel your main financial provider delivers appropriate technologies to do the following?
In fact, just 49% of the world’s Futurewealthy indicate that current investment technologies are
appropriate to their needs. The upper echelon seem to be better catered for, but even among this
elite group satisfaction levels only average 59% across the various technologies.
However, overall satisfaction levels drop to 45% among those Futurewealthy clients who are still
building their nest eggs. In fact, one in nine of this upwardly-mobile group is positively grumpy
about the way investment opportunities are presented to them.
Sentiments around the world are similar. Wealth managers in the American markets appear to be
doing a little better, but in Europe and in Asia only between one-third and a half of wealth creators
believe wealth managers have the right tools to tell them what to do with their money [Figure 2].
If you add to the mix that the Futurewealthy in the Asia Pacific markets are most on the front foot
when it comes to technology adoption, these results are far from a ringing endorsement.
Taken together, it seems the landscape of investment technology is much like the famous
skylines of these three great regions; there are some beautiful highs, but also some less-attractive
lows.

Figure 2: Quality of advisor technologies (by region)
Do you feel your main financial provider delivers appropriate technologies to do the following?
Highs
Lows
% who say their
wealth manager
has appropriate
technology
The Americas Europe APAC
50%41%57% Overall
Execute transactions
69% 56% 57%
Provide information
about my complete
financial picture
58% 43% 51%
Access knowledge
about particular
investment options
48%38%57%
Access news on
products and markets
53% 38% 50%
Demonstrate portfolio
strategies
42%29%49%

LOGIC MAY GET YOU FROM A TO B, BUT ONLY IMAGINATION CAN TAKE
YOU EVERYWHERE
These could-do-better scores beg the question, what are the expectations of the Futurewealthy
when it comes to investment technology? Because, one of the greatest challenges of the
technology age is its infinite realm of possibilities.
As we have seen in earlier papers, the Futurewealthy find this myriad of possibilities very exciting.
But, at the same time, they have their feet firmly planted on the ground – especially when it comes
to their money.
They do not necessarily expect their wealth manager’s technology to be cool, cute or complex.
But, by the same token, focusing on what is appropriate should not exclude what is intelligent.
Furthermore, what is safe and practical should also be dynamic and innovative, and maybe even
a touch exciting [Figures 3 & 4].
Indeed, by asking the Futurewealthy the qualities they would like to see in their wealth manager’s
technology, we find they expect strong foundations. But, they would not mind someone hitting
the refresh button and allowing wealth managers to think again at how investment technology
could dare to delight.

Figure 3: Current investment technology characteristics
How would you characterise your main financial provider’s CURRENT use of technology?
Figure 4: Desired provider technology characteristics
What are the qualities you would LIKE TO SEE in your main financial provider’s use of technology?

OUR GREATEST STORE OF INFORMATION IS IN OTHER PEOPLE
If the Futurewealthy think their wealth managers have been in power-down mode while the
technology revolution has been taking off, then it is not without good reason.
We must remember that the Futurewealthy are information mavens – experts in sourcing
knowledge from a wide web of connections. And so, when it comes to making serious investment
decisions, they have the world at their finger tips.
Their wealth manager may want the kind of personal relationship that makes them a partner in
money matters, but the Futurewealthy are by no means information monogamists.
Rather, as each individual becomes a broadcaster and
each consumer joins a cohort of co-consumers, even
investment decisions are co-sourced.
The Futurewealthy may value the opinion of their wealth
manager when it comes to investments, but their
credentials will be checked and re-checked through
different filters before a decision is reached.
In fact, on a one-hundred point scale, we find ratings, reviews, search engines and price
comparison sites feature almost on par with a wealth management firm’s own information output
when the Futurewealthy assess how to invest, and with whom [Figure 5].
Figure 5: Influences on investment decisions (by worth)
When you made your last investment, how influential were the following factors in your decisions to work
with a particular financial provider?
#FW2012/2013
Those worth over USD4 million
place about three times as much
importance on their wealth
manager’s blog posts and social
networking presence compared to
those with less than USD500,000

Once again, we find it is the wealthiest of the Futurewealthy
for whom these different digital touchpoints are a key part
of their decision framework. These self-starters cast a wide
information net to ensure their investment choices make
sense.
Those in the Asia Pacific markets are also avid co-
consumers for whom digital channels provide vital
validation of their investment decisions [Figure 6].
Figure 6: Influences on investment decisions (by region)
When you made your last investment, how influential were the following factors in your decisions to work
with a particular financial provider?
#FW2012/2013
A firm’s social networking presence
is about three times more important
to Asia’s wealthy when deciding on
an investment provider than to those
from Europe and the Americas.

ONLY CONNECT THE PROSE AND THE PASSION
So, it seems when the Futurewealthy consider how to invest their hard-earned capital, they do not
just rely on their wealth managers, but on a whole information ecosystem. In this online
environment, wealth managers will increasingly need to stand out if their opinions are to be heard
and valued.
Joining the information fray is undoubtedly a giant step for firms that root their service ethos in
the delivery of financial solutions that are deeply personal. Yet, for those that want to keep
connecting with their most valued customers, it seems the time has come to define how
technology can be used to empower those relationships and take them forward into the future.
You could call this user-friendliness, but the real opportunity lies in redefining service – with a .
And, while some wealth manager types seem to
be getting to grips with online channels better
than others, with an average performance score
of 56 points, there is once again significant
room for improvement [Figure 7].
Figure 7: Quality of wealth manager delivery through online channels
(by provider type)
How good was your financial provider at using online channels to deliver their services?
#FW2012/2013
When it comes to online information, wealth
advisors are beating private banks by 7
performance points, and banks by 11 points.

Part of this challenge will lie in complexity. As we have already seen in this series, the
Futurewealthy typically have at least three digital devices and all of them are important in their
interaction with wealth managers. Which means, they do not just want service with a smile; they
want it on the go.
Laptops top the list of devices the Futurewealthy use to connect with a wealth manager, but
smartphones, iPads and Blackberrys are not far behind. These technologies are no longer a nice-
to-have novelty; they have become part and parcel of the way the world’s wealthy organise their
lives, albeit as secondary communication tools in their financial relationships [Figure 8].
For those who provide financial services to the Futurewealthy, this means information
management – and indeed even relationship management – is getting much more mobile.
Figure 8: Digital devices used to connect with wealth managers
When it comes to communicating with your financial provider about your investments, which of the
following devices are important? (Percentage of respondents who stated the device was important)

And no surprises, once again it is those with the most get-up-and-go, who are getting up and
going the most. In fact, 74% of the richest Futurewealthy already use the mobile and tablet apps
offered by their wealth manager, compared with just 35% of those whose current wealth is
<USD500,000 [Figure 9].
Similarly, the Futurewealthy in the Asia Pacific region are not far behind. Here, 64% are already
using financial apps from their wealth managers. This is more than double the level of uptake for
mobile financial services in the Americas, and well ahead of Europe too [Figure 10].
In fact, if a wealth manager has opened an app channel to reach out, it seems Futurewealthy
clients are more than willing to use it.
Figure 9: Use of mobile and tablet applications (by worth)
Does your main financial provider have an app?

Moreover, these take-up levels suggest that the world’s Futurewealthy are ready to rely on their
wealth management providers’ know-how. But, squeezing complex financial information into the
busy lives of these high-flying Futurewealthy will be no simple task.
They want quality information and tools, as well as the flow and the flexibility to connect. As keen
co-consumers, the ability to share and compare will also be important as they vector toward
investment choices.
All of this adds up to the kind of investment technology that can make Futurewealthy customers
smile.
Wealth managers may not be there yet, but with more focus on what is “helpful” when it comes to
investment technology, they have a real opportunity to get much closer to these potential future
clients.
Figure 10: Use of mobile and tablet applications (by region)
Does your main financial provider have an app?

ONCE WE BELIEVE IN OURSELVES, WE CAN RISK CURIOSITY, WONDER,
SPONTANEOUS DELIGHT, OR ANY EXPERIENCE THAT REVEALS THE HUMAN
SPIRIT
Rather than ending this paper on a low note, we would like to end it on a high one. As we have
seen once again, the world’s rising wealthy are putting themselves at the forefront of the
technology revolution. In our earlier papers, we found them spending many hours each week
using new technologies to research, to network, connect, discuss and share. So, it comes as no
surprise in this paper to find the same enthusiasm spilling over into their financial relationships.
As curious creatures, the Futurewealthy are undoubtedly challenging customers. Yet, the desire
they have for more intelligent and innovative technologies from their wealth managers is far more
of an opportunity than it is a threat. It begs the question from wealth managers: how can their
investment technology be moved from the purely mechanical, to the cognizant, empowering
individuals to learn and understand more about their investment choices.
This kind of knowledge sharing has always been at the core of the personal relationships wealth
managers build with their clients. But, as we have seen throughout this series, technology does
not change the personal; it enables it.
It follows that in future helpful investment technology will not just need to deliver; it will also need
to delight.

ABOUT THE PARTNERS
Scorpio Partnership
Scorpio Partnership is a pioneer in the art of translating the complex needs of wealthy clients
into practical, innovative and profitable solutions to target these customers. This award-winning
firm has developed client insight from thousands of millionaires and billionaires around the world.
With this knowledge, the firm has implemented strategic research, practical consulting and
business innovation projects in over 35 countries.
Standard Chartered Private Bank
Standard Chartered Private Bank is the private banking division of Standard Chartered Bank.
Headquartered in Singapore, the Private Bank employs over 1,200 staff, including 450
relationship managers, globally. It has 22 offices (with two trust offices) across Asia, Africa,
Middle East and Europe.
The Private Bank leverages the natural strengths of Standard Chartered: A heritage of over 150
years in international banking, a global network across more than 70 countries, and strong local
presence in key growth markets. These put the Private Bank in an advantaged position to grow
steadily and deepen client relationships across its core markets.
SEI
SEI (NASDAQ:SEIC) is a leading global provider of investment processing, fund processing, and
investment management business outsourcing solutions that help corporations, financial
institutions, financial advisors, and ultra-high-net-worth families create and manage wealth. As of
December 31, 2012, through its subsidiaries and partnerships in which the company has a
significant interest, SEI manages or administers $458 billion in mutual fund and pooled or
separately managed assets, including $201 billion in assets under management and $257 billion
in client assets under administration. For more information, visit www.seic.com.
Morar Consulting
Morar Consulting was founded to bring new approaches to brand strategy and brand
measurement to help firms grow the value of their brands. Their work is built on a combination of
four key elements: insight, expertise, technology and action.
Important Information
All graphical and image material in this report are sourced by and to Scorpio Partnership.
Standard Chartered Private Bank is the private banking division of Standard Chartered Bank (“SCB”). Private banking activities may be carried out
internationally by different SCB legal entities and affiliates according to local regulatory requirements. Not all products and services are provided by all
SCB branches, subsidiaries and affiliates. Some of the SCB entities and affiliates only act as representatives of the Standard Chartered Private Bank,
and may not be able to offer products and services, or offer advice to clients. They serve as points of contact only.
Standard Chartered Bank is incorporated in England and Wales with limited liability by Royal Charter 1853, Reference number ZC 18. The Principal
Office of the Company is situated in England at 1 Aldermanbury Square London EC2V 7SB. Standard Chartered Bank is authorised and regulated by
the Financial Services Authority under FSA register number 114276 VAT number: GB 244106593.
SEI solutions may be offered internationally by different SEI Investment Company subsidiaries and affiliates according to local regulatory requirements.
This material has not been approved by any of the SEI subsidiaries or affiliates as a financial promotion or marketing communication for any
prospective investor. The information contained in this document has not been independently verified by SEI or any legal entity of the SEI Group of
Companies. This document is not intended in any circumstances as an offer or solicitation to subscribe for or acquire any securities or sale of any
securities in any jurisdiction.

The Futurewealth Report: Helpful investment technologies for wealthy HNW investors

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