Wealth Management

Winning the Battle for the Wealthy Investor
Robert Waitman, Director
Cisco IBSG Financial Services
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Cisco Wealth Management Survey
Investors lack confidence in the markets and they have spread their assets across many firms and advisors.
The Under-50 investor represents a huge opportunity for firms….significant assets, very involved clients, but willing to leave.
Technology (which they already use in their daily lives) is one of the differentiators….with $18B of revenue at stake, the time to act is now.
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Survey Findings: Post-Crisis Attitudes and Confidence Levels
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3

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Many Now Believe the Playing Field Is Not Level…
The financial markets are a level playing field where investors like me have a fair chance to succeed.
Sample Size = 1,000
Source: Cisco IBSG Economics Practice, November 2010

…And 50% Believe Retirement Will Be Delayed
Think about the effects of the recent global economic crisis on the performance of your investments. Will the crisis cause you to delay your retirement date?
50%
Sample Size = 555

80% Have Assets Spread Across More Than One Firm…
With how many different financial services firms do you have invested assets?
80%
Sample Size = 1,000

30% Have No Financial Advisor
Do you have a financial advisor to help you make investment decisions?
Sample Size = 1,000

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…Because They Feel Fees Are Too High While Returns and Trust Are Too Low
Why do you not have a financial advisor? (Top 5)
Sample Size = 295

Survey Findings: Under-50 Investors—Risks and Opportunities
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2

Overall Assets by Age: U.S.
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As a Whole, Under-50 Investors Hold 28% of U.S. Assets
Sources: U.S. Consumer Statistics, 2007; Cisco IBSG, November 2010

Percent who expect significant increase in investable assets through gift or inheritance in next 10 Years, by age and assets
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Wealth Transfer Will Make Under-50 Investors Even Wealthier
Sample Size = 1,000

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Under-50 Investors Spend More Time Managing Their Investments…
Percent who spend 8+ hours per month managing investments (By age)
Sample Size = 1,000

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…And Demand Significant Time and Attention from Their Financial Advisors
Percent who interact daily or weekly with financial advisor to discuss investments (By age)
Sample Size = 705

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Even So, More Under-50 Investors Switched Advisors During the Crisis
Age Distribution of Wealthy Investors who Switched Financial Advisors
Sample Size = 705

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Under-50 Investors Are Very Interested In and Comfortable with Technology…
Technology attitudes and adoption level (By age)
86%
76%
Early
Majority
49%
32%
Early
Adopter
Sample Size = 1,000

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…As Shown by Tablet PC Adoption
Percent of respondents who own a tablet PC (By age)
Sample Size = 1,000

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Under-50’s Interested in Using Various Technologies to Interact with Advisors

Survey Findings: Testing Scenarios
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3

Scenario 1: Service to Provide Access to Firm and Other Experts
Receive access to multiple experts with specific expertise such as accountants and lawyers
Service coordinated by primary financial advisor
Meetings take place using high-definition video available in financial advisor’s office
Source: Cisco IBSG, November 2010

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Business Context: Under-50 Investors Consult Several Professionals…
Not including your financial advisor, which of the following professionals do you consult about matters related to your investments?
Sample Size = 705

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…Are Interested in Using High-Definition Video…
Percent “interested” and “very interested” in using high-definition video in financial advisor’s office to meet with multiple experts
63%
Very
Interested
30%
21%
Interested
Sample Size = 1,000

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…And Are Willing to Move Investments to Receive Service
Percent who would move investments to access high-definition video from advisor’s office to meet with multiple experts
Sample Size = 1,000

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…And Are Willing to Move Investments to Receive Service
Percent who would move investments to access high-definition video from advisor’s office to meet with multiple experts
$18.6 B (Under-50s)
$28.6 B overall
Sample Size = 1,000

Scenario 2: Service to Give Access to Online Investor Community
Investors given access to an online investor community (social network) to discuss strategies, ideas, stock picks with other investors
Investors could follow trades of other investors, chat online, etc.

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…And Are Open to Joining Investor Communities
Percent “interested” and “very interested” in investor community (social network)
66%
Very
Interested
23%
14%
Interested
Sample Size = 1,000

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Business Context: Under-50 Investors Using Social Networks, Blogs
Technology usage for managing and discussing investments (By age)
Sample Size = 1,000

A Segmented Approach to Next Generation Wealth Management
High-Touch
Ultra-High-
Net-Worth Under-50s
> $ 30 M
Capabilities To Offer
In-person, coordinated virtual
Customized services (e.g., Virtual Family Office)
High-Net-Worth & Affluent Under-50s
> $3 M
Frequent in-person, blended with virtual
HD video meetings with financial experts and/or family members
Virtual mtgs., video messages from advisor
Mass-
Affluent Under-50s
$0.5- $1 M
Primarily virtual, blended with in-person
Time-efficient FA interactions
Access to FA via technology endpoints
“Adviser-less” Investors
< $0.5M
Rich online self-service with on-demand FA access
Investor communities
Orchestrated self-service
Self-Service
Source: Cisco IBSG, 2010

Leading Use Cases to Get Started
Internal teaming / mentoring / specialist involvement
Bringing firm expertise to client and prospects more quickly and more often
Involving experts to close deals more quickly
“Virtual” offsite for client VIPs (build loyalty)
Staying well connected to client despite their location (reduce attrition)
Connecting to next generation / Holding family financial meeting
Establishing firm as a leader (to clients, employees)

In Closing....
Wealth Management industry on the brink of change as clients – especially those under 50 – are not satisfied with existing choices
New ways of interacting, especially high quality video, seen as a differentiator
With $18 B of revenue at risk, firms now piloting and deploying these capabilities

For more information on this research and the Cisco IBSG Financial Services Practice, visit http://www.cisco.com/go/ibsg/financialservices

Wealth Management

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