Latest / Merryn Talks Money / Best of: How Do You Pick the Best Wealth Manager?

Transcript

Best of: How Do You Pick the Best Wealth Manager? · Merryn Talks Money

• 0:02
  Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
• 0:07
  Speaker 2: Hello Merendalgs money listeners. A reminder that we want to
• 0:11
  Speaker 2: keep answering your money questions in our weekly Merin Talks
• 0:14
  Speaker 2: Your Money episodes, So do please write into our show
• 0:16
  Speaker 2: email address Merin Money at Bloomberg dot net, or send
• 0:19
  Speaker 2: us something on X with your question now. As for
• 0:23
  Speaker 2: this week, we are replaying one of our favorite personal
• 0:25
  Speaker 2: finance episodes, how do you pick the best wealth manager
• 0:29
  Speaker 2: for you Now? Last summer we had cape Gemini's Global
• 0:32
  Speaker 2: banking industry leader Gareth Wilson joined me to discuss a
• 0:35
  Speaker 2: report that they had out on the Great Wealth Transfer.
• 0:38
  Speaker 2: A lot of money nearly one hundred trillion dollars is
• 0:42
  Speaker 2: expected to be passed down from older generations to younger
• 0:45
  Speaker 2: generations over the next twenty five years, and that is
• 0:48
  Speaker 2: going to reshape the wealth management industry. I spoke to
• 0:51
  Speaker 2: Gareth about what he expects to see change, what young
• 0:54
  Speaker 2: people want from wealth advisors, and what they should consider
• 0:57
  Speaker 2: when making their choices. Welcome to Merin Talks Your Money,
• 1:10
  Speaker 2: the personal finance edition of Merin Talks Money. In these
• 1:13
  Speaker 2: bonus podcasts, we talk about the best strategies for making
• 1:16
  Speaker 2: the most of your money.
• 1:17
  Speaker 1: Now, this episode is slightly longer than usual. I'm speaking
• 1:20
  Speaker 1: with Gareth Wilton, who's chief vice president at cap Gemini.
• 1:24
  Speaker 1: They publish annually a World Wealth Report, which looked at
• 1:27
  Speaker 1: where wealth is concentrated and where wealth is growing, why
• 1:30
  Speaker 1: it's growing, and who's getting that money. Gareth, thank you
• 1:33
  Speaker 1: so much for joining us today. We really appreciate it.
• 1:35
  Speaker 3: Great to be a Maren. Thanks for invitation.
• 1:37
  Speaker 1: Let's start by talking about this World Wealth Report. It's
• 1:40
  Speaker 1: super interesting. It's jams all of fascinating findings. But tell
• 1:43
  Speaker 1: me first, how is it put together?
• 1:46
  Speaker 4: The cap Gemini World Wealth Report.
• 1:47
  Speaker 5: This is actually the twenty ninth edition of this particular
• 1:51
  Speaker 5: industry report that covers seventy one countries.
• 1:54
  Speaker 3: When we look at.
• 1:54
  Speaker 5: The wealth management industry globally, we interview something like six
• 2:00
  Speaker 5: and a half thousand high net worth individuals. We also
• 2:03
  Speaker 5: talk to a number of wealth management executives across captureminized
• 2:06
  Speaker 5: clients and other industry players, as well as some of
• 2:09
  Speaker 5: the kind of ecosystem by that I mean some of
• 2:11
  Speaker 5: the technology companies that specifically support wealth management. And then
• 2:15
  Speaker 5: we talk to some of the relationship managers and again
• 2:18
  Speaker 5: relationship managers is one of the key rules that we
• 2:21
  Speaker 5: talk about in our World Wealth Report twenty twenty five
• 2:25
  Speaker 5: in terms of the role they have to play and
• 2:27
  Speaker 5: the opportunity that is represented to them going forward.
• 2:30
  Speaker 1: Okay, so let's start with these six and a half
• 2:33
  Speaker 1: thousand people, and that's a lot of people to talk to.
• 2:35
  Speaker 1: How are we defining high net worth ultra high networth?
• 2:38
  Speaker 1: Who are these people?
• 2:40
  Speaker 5: High net worth individual We look at them effectively in
• 2:43
  Speaker 5: three classifications. So individuals who have investable assets over a
• 2:49
  Speaker 5: million dollars and the millionaire's next door maren that we
• 2:53
  Speaker 5: all have, we have investable assets between one and five
• 2:57
  Speaker 5: million dollars. The next categor gray up, which we call
• 3:01
  Speaker 5: mid tier millionaires, is between five and thirty million, and
• 3:05
  Speaker 5: then you get into the ultra high networth individuals with
• 3:08
  Speaker 5: investable assets of greater than thirty million US dollars. Fundamentally,
• 3:14
  Speaker 5: if you're above a million dollars, you're included in our
• 3:17
  Speaker 5: high networth individual discussion.
• 3:20
  Speaker 1: And investable assets is liquid cash, So that doesn't include property.
• 3:26
  Speaker 5: It doesn't include property, It covers investments that individuals have.
• 3:30
  Speaker 5: It obviously includes cash. It obviously includes some crypto currency,
• 3:35
  Speaker 5: which is an increasing consideration.
• 3:37
  Speaker 1: Okay, you interviewed six and a half thousand. How many
• 3:41
  Speaker 1: of these people are there across the board? What percentage
• 3:46
  Speaker 1: of the population falls into this bit?
• 3:50
  Speaker 5: When we look at high net worth individuals three categorizations,
• 3:55
  Speaker 5: something like two point six percent of the world population
• 4:01
  Speaker 5: falls into this categorization. It does vary by geography. We've
• 4:05
  Speaker 5: seen how that variation.
• 4:06
  Speaker 4: Has evolved because, as I say, we've done this.
• 4:08
  Speaker 5: Report for multiple years, and when we look at that
• 4:11
  Speaker 5: two point six percent, six point two fall into that
• 4:15
  Speaker 5: ultra high net worth. So six point two percent of
• 4:19
  Speaker 5: the two point six percent have had investible assets of
• 4:22
  Speaker 5: greater than thirty million dollars.
• 4:24
  Speaker 1: Okay, And the richest populations are going to be, presumably
• 4:28
  Speaker 1: in the US, where it's not going to be two
• 4:30
  Speaker 1: point six percent, it's going to be very significantly higher.
• 4:33
  Speaker 5: It is, and when we look at it, when we
• 4:34
  Speaker 5: look at the population within North America, seven point three
• 4:39
  Speaker 5: seven point three percent fall into this high net worth
• 4:42
  Speaker 5: individual We look in Asia it's something like two point seven,
• 4:46
  Speaker 5: and we look at Europe it's two point one.
• 4:49
  Speaker 1: Can you break that up for the UK at all?
• 4:51
  Speaker 5: Not specifically, the point I want to make here a marinaction.
• 4:54
  Speaker 3: Let me just.
• 4:55
  Speaker 5: Clarify that those figures.
• 4:58
  Speaker 4: In terms of population are in terms of growth.
• 5:01
  Speaker 1: Okay.
• 5:02
  Speaker 5: So when we look at North America, there's seven point
• 5:05
  Speaker 5: three percent growth in terms of the high net worth
• 5:09
  Speaker 5: individual population. Within Asia Pacific, it's two point seven percent
• 5:13
  Speaker 5: growth when we compare twenty four to twenty three, and
• 5:17
  Speaker 5: actually in the UK it's two point one percent decline.
• 5:21
  Speaker 5: So we've seen a decline in terms of this high
• 5:24
  Speaker 5: networth individual population here in the UK for many of
• 5:27
  Speaker 5: the reasons that you would expect when we look at
• 5:30
  Speaker 5: twenty twenty four is a year, but North America is
• 5:33
  Speaker 5: growing apax growing Europe and the UK we've seen a decline.
• 5:39
  Speaker 1: Okay, so a decline in Europe as well. Yeah, indeed,
• 5:42
  Speaker 1: I know you said you all know the reasons for this,
• 5:43
  Speaker 1: but would you run us through them so we can
• 5:45
  Speaker 1: just feel miserable about them all over again.
• 5:47
  Speaker 3: We've seen a.
• 5:48
  Speaker 5: Fall in terms of the kind of return on equity investments,
• 5:52
  Speaker 5: and fundamentally the stock market that was obviously contributed. We've
• 5:57
  Speaker 5: seen declines in some of the investment months with regard
• 6:01
  Speaker 5: to private equity, and all of this has contributed to
• 6:04
  Speaker 5: this reduction.
• 6:06
  Speaker 1: Okay, interesting. I thought you were going to say that
• 6:08
  Speaker 1: that number was falling because people were leaving the UK
• 6:11
  Speaker 1: and the EU and taking their investable assets with them
• 6:14
  Speaker 1: to go well as well, and we've seen a lot
• 6:16
  Speaker 1: of talk, for example, about the well of leaving the
• 6:18
  Speaker 1: UK for tax reasons. So I'm surprised that you put
• 6:21
  Speaker 1: it down to falling returns from their investments, not to
• 6:26
  Speaker 1: actual departures.
• 6:27
  Speaker 5: Your point is valid, Marin in terms of the kind
• 6:30
  Speaker 5: of globalization of this particular segment of the society. They're
• 6:35
  Speaker 5: definitely looking at opportunities to invest globally. They're certainly looking
• 6:41
  Speaker 5: at some of the benefits of tax jurisdictions outside.
• 6:45
  Speaker 3: Their domestic market.
• 6:46
  Speaker 5: In our report this year, we've seen growth in locations
• 6:50
  Speaker 5: like Singapore. We've seen growth in locations like Hong Kong,
• 6:54
  Speaker 5: the Bai seems to be a well known location for
• 6:58
  Speaker 5: the relocation of wealth, but also Saudi Arabia.
• 7:02
  Speaker 1: We should say, just to be clear, although I think
• 7:04
  Speaker 1: probably is clear that this is last year's information, and
• 7:07
  Speaker 1: obviously there's been a big change in the way the
• 7:09
  Speaker 1: markets have moved so far this.
• 7:11
  Speaker 3: Year twenty four versus twenty three.
• 7:13
  Speaker 4: The shift here is based on the twenty four data.
• 7:15
  Speaker 1: Okay, let's talk about the main theme and one of
• 7:18
  Speaker 1: the big themes of this year's report, which is all
• 7:20
  Speaker 1: about the great wealth transfer. The number that you put
• 7:23
  Speaker 1: in there is there'll be a wealth transfer of eighty
• 7:26
  Speaker 1: three point five trillion dollars to a new generation of
• 7:29
  Speaker 1: investors or rich people, whatever related called by twenty forty eight.
• 7:33
  Speaker 1: And that's that's real money.
• 7:35
  Speaker 5: Is a huge shift in wealth from one generation to
• 7:38
  Speaker 5: the next, eighty three point five trillion dollars by twenty
• 7:42
  Speaker 5: forty eight. Now that twenty forty eight signs a long
• 7:46
  Speaker 5: way away, maren, But actually when you look at the
• 7:48
  Speaker 5: short term, thirty percent of that wealth will actually transfer
• 7:51
  Speaker 5: before twenty thirty over the next five years, huh. And
• 7:54
  Speaker 5: a further sort of thirty percent will transition before twenty
• 7:58
  Speaker 5: thirty five.
• 7:58
  Speaker 3: So it's a big number, Burr.
• 8:00
  Speaker 5: But it also is an imminent consideration for the individuals, obviously,
• 8:05
  Speaker 5: particularly if you're about to receive or inherit that wealth.
• 8:08
  Speaker 5: But also it's an important consideration for the wealth management
• 8:12
  Speaker 5: organizations in terms of effectively how do they mean relevant
• 8:17
  Speaker 5: to their client's kids generation in a way that they're
• 8:20
  Speaker 5: being relevant to their to the parents' generation.
• 8:23
  Speaker 1: Yeah, And one of the interesting things about this is
• 8:25
  Speaker 1: the extent to which that wealth, as it's passed down,
• 8:29
  Speaker 1: stays in the market and the extent of which it
• 8:32
  Speaker 1: is removed for living costs, particularly down at the lower end. Right,
• 8:36
  Speaker 1: do you inherit a million dollars or two million dollars
• 8:38
  Speaker 1: and you're in your thirties or forties, what are you
• 8:40
  Speaker 1: going to do? You're probably going to buy a house
• 8:42
  Speaker 1: and maybe paid for school fees, that kind of thing.
• 8:44
  Speaker 1: So there is this dynamic where you can't necessarily expect
• 8:48
  Speaker 1: that eighty three point five trillion to hang around in
• 8:52
  Speaker 1: stock markets, in private equity and crypto exactly. You can
• 8:55
  Speaker 1: expect it to be taken out for living on dotarily that.
• 8:59
  Speaker 3: Will be the case.
• 8:59
  Speaker 4: I think everybody's situation is fundamentally different.
• 9:03
  Speaker 6: However, when we look at the gen X, to those
• 9:09
  Speaker 6: of us who are between there are forty four and
• 9:12
  Speaker 6: fifty nine years of age, we have one perception.
• 9:15
  Speaker 4: In terms of what that inheritance will mean. The millennials,
• 9:18
  Speaker 4: the famous millennials, who are all sort of between their
• 9:21
  Speaker 4: late twenties and early forties in twenty twenty five.
• 9:24
  Speaker 5: Have a different outlook. And to your point is very relevant,
• 9:26
  Speaker 5: and Maren, that's where property, school fees, lifestyle will be.
• 9:31
  Speaker 5: And then you have gen Z's, which are really only
• 9:34
  Speaker 5: teenagers in their early twenties, but.
• 9:36
  Speaker 3: There also will be a recipient for this wealth.
• 9:38
  Speaker 5: So I think we'll see different behaviors depending on the
• 9:41
  Speaker 5: generations and obviously by individual but fundamentally, the point we're
• 9:45
  Speaker 5: making here is how can the wealth management industry take
• 9:50
  Speaker 5: advantage of this transfer but also mitigate the risk that
• 9:54
  Speaker 5: it represents, because there's a chance that the wealth management
• 9:58
  Speaker 5: firms will lose some of the assets.
• 10:01
  Speaker 1: Let's put the decumulation point aside for the moment. The
• 10:04
  Speaker 1: secutivetic thing, as you say, is this idea that it's
• 10:08
  Speaker 1: something of a threat to the wealth management business, partly
• 10:11
  Speaker 1: in terms of that flow out, but also in terms
• 10:14
  Speaker 1: of the different expectations and needs that the younger generation
• 10:17
  Speaker 1: will have. One of the terrifying statistics for wealth management
• 10:20
  Speaker 1: companies the put in this report is it eighty one
• 10:22
  Speaker 1: percent of those who inherit a likely to shift wealth
• 10:25
  Speaker 1: management company within one or two years. Can it really
• 10:27
  Speaker 1: be that much? Can people really be that non apathetic?
• 10:31
  Speaker 5: I think they can, and that statistics definitely support that
• 10:34
  Speaker 5: potential risk now, of course, there's things that we can all.
• 10:37
  Speaker 3: Do to mitigate that. You know, do we really understand
• 10:41
  Speaker 3: what the.
• 10:41
  Speaker 5: Inheriting generations want to achieve in terms of their objectives?
• 10:46
  Speaker 5: And as I say, the baby boomers have somewhat been
• 10:48
  Speaker 5: in a little bit of a wealth preservation mindset. I
• 10:51
  Speaker 5: think when we look forward into the millennials, it's all
• 10:54
  Speaker 5: about long term growth and that's where some of these
• 10:57
  Speaker 5: maybe higher risk assets into the frame. We've talked about cryptocurrencies,
• 11:03
  Speaker 5: We've talked about private equity, you know, a movement towards
• 11:07
  Speaker 5: some of these types of investments in a portfolio potential consideration.
• 11:13
  Speaker 4: I think this global diversification.
• 11:15
  Speaker 5: I think future generations will look at the world in
• 11:18
  Speaker 5: its entirety and think, well, quite frankfully, if they want
• 11:21
  Speaker 5: to invest in markets in Asia, they want to invest
• 11:24
  Speaker 5: in censors like Singapore, then.
• 11:26
  Speaker 3: Again much more open to do so.
• 11:28
  Speaker 4: And then thirdly, I think this nature of the services.
• 11:33
  Speaker 5: I think our senses and the report very clearly draws
• 11:35
  Speaker 5: out that concanterge services, trust planning, property management are willingness
• 11:42
  Speaker 5: to have a more encompassing relationship that's not just purely
• 11:45
  Speaker 5: based on the scale of your wealth and the growth
• 11:48
  Speaker 5: of that particular portfolio, but whether set of services are
• 11:52
  Speaker 5: wrong that really contribute to a lifestyle. Our report draws
• 11:55
  Speaker 5: out that this idea of luxury, certainly for those high
• 11:59
  Speaker 5: networth individual is becoming an increase in consideration in terms
• 12:03
  Speaker 5: of where they spend their wealth. How can the wealth
• 12:05
  Speaker 5: management firms bring some of those lifestyle concierge support services
• 12:11
  Speaker 5: to bear to make sure that they're bringing that all
• 12:14
  Speaker 5: encompassing relationship for the future generations.
• 12:17
  Speaker 1: Okay, let's go back a bit to this idea of
• 12:20
  Speaker 1: that young wanting a different class of assets and risk
• 12:25
  Speaker 1: a class of assets so crypto okay, private equity. I
• 12:29
  Speaker 1: mean again, there's a rising evidence that in fact, private
• 12:33
  Speaker 1: equity is not a higher return asset class at all.
• 12:36
  Speaker 1: As we say these days, it's not magic, it's debt, right,
• 12:39
  Speaker 1: And as interest rates rise, and we've seen in the
• 12:42
  Speaker 1: last couple of years, it's huge difficulty that private equity
• 12:45
  Speaker 1: companies are having and exiting any of their positions. So
• 12:49
  Speaker 1: it's possible that private equity may not be one of
• 12:52
  Speaker 1: the asset classes that the young end up looking at.
• 12:55
  Speaker 1: But I'm really interested in the idea that they might
• 12:58
  Speaker 1: want to invest in a more global way, because we
• 13:02
  Speaker 1: have had over the last couple of decades, even global
• 13:05
  Speaker 1: has meant the US right in the sixty seventy percent
• 13:09
  Speaker 1: of world industries are still America. So even if people
• 13:12
  Speaker 1: say I want to be globally diversified, they still end
• 13:15
  Speaker 1: up basically invested in the US and more or less
• 13:18
  Speaker 1: invested in those top tech companies. But you think that
• 13:20
  Speaker 1: over the next couple of decades we'll see a shift
• 13:24
  Speaker 1: driven by people genuinely wanting to be more international.
• 13:28
  Speaker 3: Yeah, yeah, we do.
• 13:29
  Speaker 5: It's partly driven by some of those favorable tax regimes,
• 13:34
  Speaker 5: but also the access to those particular sort of financial ecosystems,
• 13:41
  Speaker 5: the stability political stability within those particular regions are all considerations.
• 13:48
  Speaker 5: But I think when I look at the long term benefits,
• 13:51
  Speaker 5: and I'm going to bring you back to your point
• 13:53
  Speaker 5: by private equity, I think when you look at private
• 13:54
  Speaker 5: equity in the long term, it's a very valid options,
• 13:58
  Speaker 5: as with crypto, as with the kind of globalization piece.
• 14:01
  Speaker 1: Yeah, I have to I have to stop you there.
• 14:03
  Speaker 1: I've got to stop you there, because first, on private equity,
• 14:05
  Speaker 1: there is no real long term because the scale of
• 14:08
  Speaker 1: it has only relatively recent, right, So we don't know yet.
• 14:12
  Speaker 1: I'll give you that if you look at the numbers
• 14:13
  Speaker 1: of the private equity industry, gives you it looks like
• 14:16
  Speaker 1: maybe this outperforms over the long term. But this is
• 14:19
  Speaker 1: a tiny industry until relatively recently. It's only become a
• 14:22
  Speaker 1: giant industry during the low interest rate period. We have
• 14:25
  Speaker 1: no idea how at this scale it will perform in
• 14:30
  Speaker 1: a higher interest rate environment. So I'm not giving you
• 14:32
  Speaker 1: that one cryptocurrency. Again, I can't give you that because
• 14:36
  Speaker 1: there is no long term. We have no idea. There
• 14:38
  Speaker 1: is no long term. We only have the short term here.
• 14:40
  Speaker 1: We can only guess about the future, right, which doesn't
• 14:43
  Speaker 1: mean that if you have a high risk appetite shouldn't
• 14:45
  Speaker 1: be in it. But no one can tell you that
• 14:47
  Speaker 1: cryptocurrency has a great long term performance record because there
• 14:50
  Speaker 1: is no long term, right, unless your definition of long
• 14:52
  Speaker 1: term is different to mine.
• 14:54
  Speaker 3: I'm not going to argue with you on that point.
• 14:56
  Speaker 4: We're seeing organizations invest Goldman Sachs to give an example.
• 15:01
  Speaker 5: You know, they have their gm FRA product proposition, which
• 15:05
  Speaker 5: is enabling that bn Y melan. They have what they
• 15:09
  Speaker 5: call all bridge, which is looking at what we talk
• 15:11
  Speaker 5: talk about alternative investments.
• 15:13
  Speaker 3: So as I say, we.
• 15:14
  Speaker 5: Can argue the pros and cons, but ultimately I think
• 15:17
  Speaker 5: as an industry, I think my key point is important
• 15:21
  Speaker 5: to be cognizant of those those alternative investments and our
• 15:25
  Speaker 5: sense of captareminis. Those will be more relevant going forward,
• 15:28
  Speaker 5: and I think the regulation of those particular products, you know,
• 15:34
  Speaker 5: crypto as an example, I.
• 15:36
  Speaker 4: Suppose they're also increasing.
• 15:39
  Speaker 5: Let's just say the acceptance of the opportunity they represent.
• 15:43
  Speaker 1: Let's go back to crypto because I get in a
• 15:45
  Speaker 1: lot of trouble from the bitcoin bros all the time
• 15:48
  Speaker 1: about confusing bitcoin and crypto because they're different things. Right,
• 15:52
  Speaker 1: So when you say crypto and you say that the
• 15:54
  Speaker 1: young or the younger generations would like to inclue crypto
• 15:57
  Speaker 1: as an asset class inside their portfolios, what do.
• 15:59
  Speaker 5: You mean anything that qualifies as a digital asset, Maren,
• 16:02
  Speaker 5: including bitcoin?
• 16:03
  Speaker 1: Can I just interrupt to give my usal message, But
• 16:06
  Speaker 1: if any of you would like to send hate mail
• 16:08
  Speaker 1: about the differentiation between crypto or bitcoin, NFTs, etc. Please
• 16:12
  Speaker 1: can you send them direct to Gareth. I'll give you
• 16:13
  Speaker 1: his contact details.
• 16:14
  Speaker 4: At the end.
• 16:15
  Speaker 3: Thank you, Thank you, my.
• 16:17
  Speaker 4: Pleasure, my pleasure.
• 16:18
  Speaker 1: Get enough, everyone, everyone should share the.
• 16:20
  Speaker 3: Joy exactly exactly.
• 16:22
  Speaker 7: I think fifty six percent, fifty percent of gen z's
• 16:27
  Speaker 7: and millennials view alternative investments as a valid part of
• 16:34
  Speaker 7: their portfolio.
• 16:35
  Speaker 1: So alternative investments, we're putting crypto, we're putting private equity.
• 16:39
  Speaker 1: What else are we putting ETFs?
• 16:42
  Speaker 3: For example? Yeah? Yeah, yeah?
• 16:44
  Speaker 1: Is that alternative?
• 16:45
  Speaker 3: Depends on the product type. Yeah, all right.
• 16:49
  Speaker 5: The other thing about the future generations is the digital
• 16:54
  Speaker 5: experience very much moving away probably from the classic face
• 16:58
  Speaker 5: to face.
• 16:58
  Speaker 3: When you look at.
• 16:59
  Speaker 5: The millennials, they they really want the mobile interface, They
• 17:03
  Speaker 5: want personalization.
• 17:05
  Speaker 3: So they want us to use their data. When I say,
• 17:07
  Speaker 3: ask the banking.
• 17:08
  Speaker 5: Industry, the wealth management industry, they want us to use
• 17:11
  Speaker 5: their data to bring proactive propositions that are relevant to
• 17:15
  Speaker 5: their investment strategy.
• 17:16
  Speaker 4: And fundamentally, they probably also.
• 17:18
  Speaker 5: Want to see, certainly for these high network individuals, their
• 17:22
  Speaker 5: extensive wealth in one place.
• 17:24
  Speaker 1: Yeah, and I'm really interested in this idea that a
• 17:27
  Speaker 1: wealth manager should also provide a sort of luxury concierge
• 17:31
  Speaker 1: service that does travel and does bespoken experiences, education, medical, cybersecurity,
• 17:39
  Speaker 1: all these things in a wanna that would love. That
• 17:43
  Speaker 1: sounds great, Do you think that the next generation has
• 17:45
  Speaker 1: different expectations of how they will spend to the current generation.
• 17:50
  Speaker 1: And one of the things that we've talked about again
• 17:52
  Speaker 1: quite a lot on the podcast is the way, particularly
• 17:54
  Speaker 1: in travel and people with a much lower level of
• 17:57
  Speaker 1: wealth than the luxury travel industry previous, as we have
• 18:00
  Speaker 1: expected our spending very large amounts of money on luxury travel.
• 18:05
  Speaker 3: I think it's the experience generation.
• 18:07
  Speaker 5: I think, I think fundamentally and with this, with this segment,
• 18:12
  Speaker 5: next generation high networth individuals, it probably just amplifies that meren.
• 18:16
  Speaker 5: You know, travel experience, passion. You know, we talk about
• 18:21
  Speaker 5: passion investments. I can see you looking.
• 18:25
  Speaker 1: It's not physical, it's a snare, but.
• 18:29
  Speaker 5: You know, art, art, wine, cars, And again in our
• 18:36
  Speaker 5: cap Gemini report last year, we talked about the role
• 18:38
  Speaker 5: of the family offers. This is an extension merin in
• 18:41
  Speaker 5: terms of bringing some of those non financial services to
• 18:45
  Speaker 5: bear in a way that I actually is very much
• 18:48
  Speaker 5: in line with the client expectations and their desire for experiences. Yeah.
• 18:54
  Speaker 1: I guess that what what I object to slightly is
• 18:56
  Speaker 1: idea that something is a passion investment. I kind of
• 18:58
  Speaker 1: feel either it's a passion or it's an investment confusing too,
• 19:02
  Speaker 1: and it's a root to low returns or disaster. So listen,
• 19:06
  Speaker 1: here's the real question for you. Right, we have a
• 19:08
  Speaker 1: lot of listeners out there. Maybe they're going to inherit,
• 19:11
  Speaker 1: maybe they're not, Maybe they already have money or whatever,
• 19:13
  Speaker 1: and they're sitting listening to this and they're thinking themselves,
• 19:15
  Speaker 1: do you know why haven't I got a wealth manager?
• 19:17
  Speaker 1: I should have a wealth manager. This is what I need.
• 19:19
  Speaker 1: And maybe they're inheriting. They're thinking, I don't want my
• 19:21
  Speaker 1: mum and dad's wealth manager. I never liked them anyway,
• 19:23
  Speaker 1: fusty old people, to suit ties, blasts, lunch at Christmas.
• 19:26
  Speaker 1: Don't want any of that nonsense. How do you look
• 19:30
  Speaker 1: for a wealth manager? What are the main things that
• 19:33
  Speaker 1: you should be looking for when you go out trying
• 19:35
  Speaker 1: to find somebody to do exactly this, not just run
• 19:38
  Speaker 1: your money, but effectively manage your long term, long term
• 19:41
  Speaker 1: income and lifestyle. What are we looking for?
• 19:44
  Speaker 3: Really, really good question. I'll probably think about it in
• 19:47
  Speaker 3: three ways.
• 19:48
  Speaker 5: I think first and foremost, probably a wealth manager or
• 19:53
  Speaker 5: wealth management organization that fundamentally understands you're aspirations. So I
• 20:01
  Speaker 5: think they have to be one hundred percent aligned with
• 20:05
  Speaker 5: what you want to achieve. I think the second thing
• 20:07
  Speaker 5: I would say, Marin is I think a wealth manager
• 20:11
  Speaker 5: that gives you access to the breadth of products, services,
• 20:16
  Speaker 5: and experiences you're looking for for you and your family.
• 20:20
  Speaker 5: And then finally, I think with another thing in life,
• 20:22
  Speaker 5: there has to be a degree of chemistry. I think
• 20:24
  Speaker 5: fundamentally having a very real time relationship that's supported by
• 20:30
  Speaker 5: digital and we've talked about this demand for a digital platform,
• 20:34
  Speaker 5: but also that's enabled through a relationship because fundamentally we're
• 20:39
  Speaker 5: talking about the very important conversations for you as an individual,
• 20:44
  Speaker 5: your and your future and your family's future.
• 20:47
  Speaker 1: Okay, and crucially, what should I pay and how should
• 20:51
  Speaker 1: I pay? Is there been any shift in the charging
• 20:54
  Speaker 1: structure for wealth management or are we still just going
• 20:56
  Speaker 1: to pay one percent advalaur and forever one and half
• 20:59
  Speaker 1: whatever it depending on my either.
• 21:01
  Speaker 5: Obviously it varies very much by organization. Can't comment on
• 21:06
  Speaker 5: the kind of pricing models for specifics. But again I
• 21:10
  Speaker 5: would say, in a world where we're looking to achieve
• 21:13
  Speaker 5: outcomes and experiences, why not link the investment to those
• 21:19
  Speaker 5: outcomes and that will be as a client, that will
• 21:21
  Speaker 5: be the angle that I would always be looking to
• 21:23
  Speaker 5: take in terms of how can we get some surety
• 21:26
  Speaker 5: in terms of the long term investment and how can
• 21:29
  Speaker 5: we link fees, costs, et cetera on that.
• 21:32
  Speaker 1: Basis, So you would suggest that people find a way
• 21:35
  Speaker 1: to link what they pay to the performance of the
• 21:37
  Speaker 1: assets that they left with the world manager rather than
• 21:39
  Speaker 1: pay a flat advalarem.
• 21:41
  Speaker 5: I think if you're able to make sure that all
• 21:44
  Speaker 5: aspects of the kind of investment are aligned to the
• 21:47
  Speaker 5: to the ultimate ams, that would be that for me
• 21:49
  Speaker 5: would be a preferable model.
• 21:51
  Speaker 4: The relationship manager model as well.
• 21:53
  Speaker 3: Maren.
• 21:53
  Speaker 5: Let's just think about that, because the other dynamic we're
• 21:57
  Speaker 5: seeing here is relationship managers or also considering their long
• 22:01
  Speaker 5: term future. You know, many of them are approaching retirement age.
• 22:05
  Speaker 5: You know, we've seen a significant proportion of relationship managers
• 22:07
  Speaker 5: that will leave the industry. So there's quite a lot
• 22:10
  Speaker 5: of volatility in terms of the relationship manage your community
• 22:14
  Speaker 5: as well. So again this is another consideration for the
• 22:17
  Speaker 5: for the wealth management organizations.
• 22:19
  Speaker 3: How do they retain and grow.
• 22:20
  Speaker 4: That talent that also evolves with their client base.
• 22:25
  Speaker 1: How has it happened that the relationship managers in this
• 22:28
  Speaker 1: business have not recruited at a younger age. Why have
• 22:32
  Speaker 1: we got an aging industry?
• 22:34
  Speaker 3: I think undoubtedly they are.
• 22:36
  Speaker 5: But the key challenge is can you retain and excite
• 22:40
  Speaker 5: that talent, give them the capabilities that we've talked about,
• 22:44
  Speaker 5: you know, digital capabilities.
• 22:47
  Speaker 3: Generational AI.
• 22:48
  Speaker 5: Can you give them access to the products and services
• 22:51
  Speaker 5: that that their clients need?
• 22:53
  Speaker 1: You know, we all says, sorry, is this really about
• 22:57
  Speaker 1: a lot of people working in this industry who used
• 22:59
  Speaker 1: to be active wealth managers and gradually is the asset
• 23:02
  Speaker 1: management itself is centralized? Men or women whatever who used
• 23:06
  Speaker 1: to find themselves actively running assets now find themselves really
• 23:09
  Speaker 1: only being a relationship manager because the asset management has
• 23:12
  Speaker 1: been shifted centrally? Is is that what we're talking about here?
• 23:16
  Speaker 5: Undardedly there's been a change in the role, But again,
• 23:19
  Speaker 5: as we've said, there's also a change in the client
• 23:21
  Speaker 5: base and there's a wealth management firm.
• 23:24
  Speaker 4: You've got to make sure that you're giving.
• 23:25
  Speaker 5: Your relationship managers the tools and techniques to enable them
• 23:30
  Speaker 5: to serve as future generations.
• 23:32
  Speaker 1: Do you know what, Gareth, I think we can now
• 23:34
  Speaker 1: answer one of the questions that we get asked most
• 23:37
  Speaker 1: regularly by listeners, which is what career should my child
• 23:41
  Speaker 1: go into when they leave university? And I think you've
• 23:43
  Speaker 1: answered this for us. Become a specialist wealth management, relationship
• 23:48
  Speaker 1: manager with an AI and luxury travel specialty. Can I
• 23:52
  Speaker 1: cover it?
• 23:52
  Speaker 4: You hear to hear first, merit, and you hear to
• 23:54
  Speaker 4: hear first.
• 23:55
  Speaker 1: Oh, lucky kids. Wonderful Gareth. Thank you so much everyone.
• 23:58
  Speaker 1: Last question for you, what do you read at the moment?
• 24:01
  Speaker 5: Oh, I'm reading a book called Vine Street, Vine Street. Yeah. Yeah,
• 24:06
  Speaker 5: there's a drama based in Soho in the nineteen nineteen thirties,
• 24:10
  Speaker 5: classic police drama.
• 24:11
  Speaker 3: Nothing at all to do with banking, nothing that's all
• 24:14
  Speaker 3: to do with financial.
• 24:14
  Speaker 1: Services, police drama. I love a police drama, Vine.
• 24:18
  Speaker 4: Street, Vine Street.
• 24:20
  Speaker 3: I recommend it, Marion. I'm very much enjoy it.
• 24:22
  Speaker 1: Part way three brilliant. Thank you so much. Thank you
• 24:25
  Speaker 1: so much for joining us today.
• 24:26
  Speaker 4: That was really really interesting, my pleasure.
• 24:28
  Speaker 3: Great to see. Thank you.
• 24:33
  Speaker 1: Thanks for listening to this week's Marin Talks Money. If
• 24:35
  Speaker 1: you like our show, rate review and subscribe wherever you
• 24:38
  Speaker 1: listen to podcasts, and keep sending questions or comments the
• 24:40
  Speaker 1: meror Money at Bloomberg dot net. You can also follow
• 24:43
  Speaker 1: me and John on Twitter or x I'm at Marinas
• 24:45
  Speaker 1: w and John is John Underscore Stepe. This episode was
• 24:48
  Speaker 1: hosted by Meet marenzumzet Web. It was produced by Someersadi
• 24:51
  Speaker 1: and Moses and sound designed by Blake Maple's Special thanks,
• 24:55
  Speaker 1: of course to Gareth Wilson