Winning the Battle for the Wealthy Investor<br />Robert Waitman, Director<br />Cisco IBSG Financial Services<br />1<br />
Cisco Wealth Management Survey<br />Investors lack confidence in the markets and they have spread their assets across man...
Survey Findings: Post-Crisis Attitudes and Confidence Levels<br />1<br />3<br />
4<br />Many Now Believe the Playing Field Is Not Level…<br />The financial markets are a level playing field where investo...
…And 50% Believe Retirement Will Be Delayed<br />Think about the effects of the recent global e...
80% Have Assets Spread Across More Than One Firm…<br />With how many different financial services firms do you have invest...
30% Have No Financial Advisor<br />Do you have a financial advisor to help you make investment decisions? <br />Sample Siz...
8<br />…Because They Feel Fees Are Too High While Returns and Trust Are Too Low<br />Why do you not have a financial advis...
Survey Findings: Under-50 Investors—Risks and Opportunities<br />9<br />2<br />
Overall Assets by Age: U.S.<br />10<br />As a Whole, Under-50 Investors Hold 28% of U.S. Assets<br />Sources: U.S. Consume...
Percent who expect significant increase in investable assets through gift or inheritance in next 10 Years, by age and asse...
12<br />Under-50 Investors Spend More Time Managing Their Investments…<br />Percent who spend 8+ hours per month managing ...
13<br />…And Demand Significant Time and Attention from Their Financial Advisors<br />Percent who interact daily or weekly...
14<br />Even So, More Under-50 Investors Switched Advisors During the Crisis<br />Age Distribution of Wealthy Investors wh...
15<br />Under-50 Investors Are Very Interested In and Comfortable with Technology…<br />Technology attitudes and adoption ...
16<br />…As Shown by Tablet PC Adoption<br />Percent of respondents who own a tablet PC (By age)<br />Sample Size = 1,000<...
17<br />Under-50’s Interested in Using Various Technologies to Interact with Advisors<br />Source: Cisco IBSG Economics Pr...
Survey Findings: Testing Scenarios<br />18<br />3<br />
Scenario 1: Service to Provide Access to Firm and Other Experts <br />Receive access to multiple experts with specific exp...
20<br />Business Context: Under-50 Investors Consult Several Professionals…<br />Not including your financial advisor, whi...
21<br />…Are Interested in Using High-Definition Video…<br />Percent “interested” and “very interested” in using high-defi...
22<br />…And Are Willing to Move Investments to Receive Service<br />Percent who would move investments to access high-def...
23<br />…And Are Willing to Move Investments to Receive Service<br />Percent who would move investments to access high-def...
Scenario 2: Service to Give Access to Online Investor Community<br />Investors given access to an online investor communit...
25<br />…And Are Open to Joining Investor Communities<br />Percent “interested” and “very interested” in investor communit...
26<br />Business Context: Under-50 Investors Using Social Networks, Blogs<br />Technology usage for managing and discussin...
A Segmented Approach to Next Generation Wealth Management<br />High-Touch<br />Ultra-High- <br />Net-Worth Under-50s<br />...
Virtual mtgs., video messages from advisor</li></ul>Mass- <br />Affluent Under-50s<br />$0.5- $1 M<br />Primarily virtual,...
Access to FA via technology endpoints </li></ul>“Adviser-less” Investors<br />< $0.5M<br /><ul><li>Rich online self-servic...
Investor communities</li></ul>Orchestrated self-service<br />Self-Service<br />Source: Cisco IBSG, 2010<br />
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Wealth Management

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How winning the Battle for the Wealthy Investor, a new Cisco IBSG Study Uncovers Significant Opportunity To Address Needs of Wealthy Under-50 Investors

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  • Note: Base = All respondents
  • Note: Base = All Respondnets
  • Note: Uses (modified) technology adoption cycle from Geoffrey Moore’s “Crossing the Chasm.”Respondents self-identified their attitudes toward technology through the following questions:Early Adopter = I know the names of the latest new consumer technology products before my friends and familyand am typically among the first of my friends and family to purchase the latest technologyproducts on the market.Early majority = I’m interested in new consumer technology, and I own a few innovative products, but not as manyas the typical technology enthusiast.Late Majority = I typically wait to purchase a new consumer technology product until it is proven, and mosteveryone is using it.Laggard = In general, I am the last of my friends and family to know the names of new cutting-edgetechnology products and I avoid new technology products as long as I possibly can.
  • Note: Uses (modified) technology adoption cycle from Geoffrey Moore’s “Crossing the Chasm.”Respondents self-identified their attitudes toward technology through the following questions:Early Adopter = I know the names of the latest new consumer technology products before my friends and familyand am typically among the first of my friends and family to purchase the latest technologyproducts on the market.Early majority = I’m interested in new consumer technology, and I own a few innovative products, but not as manyas the typical technology enthusiast.Late Majority = I typically wait to purchase a new consumer technology product until it is proven, and mosteveryone is using it.Laggard = In general, I am the last of my friends and family to know the names of new cutting-edgetechnology products and I avoid new technology products as long as I possibly can.
  • Note: Base = Have FA
  • Note: TelePresence not specifically mentioned in question
  • Note: Base = Have FA
  • Base = All RespondnetsNote: Move Investments = Respondents willing to move Some investments through those willing to move all investments
  • Base = All RespondnetsNote: Move Investments = Respondents willing to move Some investments through those willing to move all investments
  • Note: TelePresence not specifically mentioned in question
  • Note: Base = All Survey RespondentsInterested = 7 and 8 on 10 point scale where 1 = Not at all interested and 10 = Extremely interestedVery interested = 9 and 10 on 10 point scale
  • Success with a new strategy for wealth management will require a segmented approach and will depend on the customer focus for a particular bank or wealth management firmBased on our survey we have found four segments of the wealthy under 50 market that have different needs:The Ultra-High-Net-Worth investors are typically well served today. Banks can afford to have a high touch face-to-face approach to these investors. Based on the input from these investors in the survey the most important addition that banks can make is to broaden the exposure to not only the main wealthy person but also to that individual’s family members. Currently most interactions happen between the financial advisor and the ultra-high net worth individual. These investors would however like to involve additional family members for discussion having significant financial implications for the family wealth. These famlies are typically spread across a large geographical area. Using high definition video solutions to connect multiple family members in the same meeting with the financial adviser would be highly valued by investors. This would in addition limit the risk for a bank of only being linked to one wealthy individual per familyThe main battle for the wealthy will be for the next two segments in the pyramid: the High- Net-Worth investors and the Mass-Affluent investors. These are the investor categories where banks cannot afford the same level of high touch face-to-face interactions as with the Ultra High-Net Worth segment. These are the segments that primarily ask for a new approach to interactions with their Financial Adviser. Using technology as an enabler banks can provide both the frequency, the quality and the personalization of advice that will be important differentiators to win this segment. In the adviser-less segment the bank cannot afford a model with frequent personalized interactions. In this segment the key approach will be to find a way provide value and differentiaton as the orchestrator of self-service. A bank would benefit from being branded as a value-added contributor to interactions between investors who come together in investor communities enabled by social media

    • Wealth Management

    1. 1. Winning the Battle for the Wealthy Investor<br />Robert Waitman, Director<br />Cisco IBSG Financial Services<br />1<br />
    2. 2. Cisco Wealth Management Survey<br />Investors lack confidence in the markets and they have spread their assets across many firms and advisors.<br />The Under-50 investor represents a huge opportunity for firms….significant assets, very involved clients, but willing to leave.<br />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. <br />2<br />
    3. 3. Survey Findings: Post-Crisis Attitudes and Confidence Levels<br />1<br />3<br />
    4. 4. 4<br />Many Now Believe the Playing Field Is Not Level…<br />The financial markets are a level playing field where investors like me have a fair chance to succeed. <br />Sample Size = 1,000<br />Source: Cisco IBSG Economics Practice, November 2010<br />
    5. 5. …And 50% Believe Retirement Will Be Delayed<br />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? <br />50%<br />Sample Size = 555<br />Source: Cisco IBSG Economics Practice, November 2010<br />
    6. 6. 80% Have Assets Spread Across More Than One Firm…<br />With how many different financial services firms do you have invested assets? <br />80%<br />Sample Size = 1,000<br />Source: Cisco IBSG Economics Practice, November 2010<br />
    7. 7. 30% Have No Financial Advisor<br />Do you have a financial advisor to help you make investment decisions? <br />Sample Size = 1,000<br />Source: Cisco IBSG Economics Practice, November 2010<br />
    8. 8. 8<br />…Because They Feel Fees Are Too High While Returns and Trust Are Too Low<br />Why do you not have a financial advisor? (Top 5)<br />Sample Size = 295<br />Source: Cisco IBSG Economics Practice, November 2010<br />
    9. 9. Survey Findings: Under-50 Investors—Risks and Opportunities<br />9<br />2<br />
    10. 10. Overall Assets by Age: U.S.<br />10<br />As a Whole, Under-50 Investors Hold 28% of U.S. Assets<br />Sources: U.S. Consumer Statistics, 2007; Cisco IBSG, November 2010<br />
    11. 11. Percent who expect significant increase in investable assets through gift or inheritance in next 10 Years, by age and assets<br />11<br />Wealth Transfer Will Make Under-50 Investors Even Wealthier<br />Sample Size = 1,000<br />Source: Cisco IBSG Economics Practice, November 2010<br />
    12. 12. 12<br />Under-50 Investors Spend More Time Managing Their Investments…<br />Percent who spend 8+ hours per month managing investments (By age)<br />Sample Size = 1,000<br />Source: Cisco IBSG Economics Practice, November 2010<br />
    13. 13. 13<br />…And Demand Significant Time and Attention from Their Financial Advisors<br />Percent who interact daily or weekly with financial advisor to discuss investments (By age)<br />Sample Size = 705<br />Source: Cisco IBSG Economics Practice, November 2010<br />
    14. 14. 14<br />Even So, More Under-50 Investors Switched Advisors During the Crisis<br />Age Distribution of Wealthy Investors who Switched Financial Advisors<br />Sample Size = 705<br />Source: Cisco IBSG Economics Practice, November 2010<br />
    15. 15. 15<br />Under-50 Investors Are Very Interested In and Comfortable with Technology…<br />Technology attitudes and adoption level (By age)<br />86%<br />76%<br />Early<br />Majority<br />49%<br />32%<br />Early <br />Adopter<br />Sample Size = 1,000<br />Source: Cisco IBSG Economics Practice, November 2010<br />
    16. 16. 16<br />…As Shown by Tablet PC Adoption<br />Percent of respondents who own a tablet PC (By age)<br />Sample Size = 1,000<br />Source: Cisco IBSG Economics Practice, November 2010<br />
    17. 17. 17<br />Under-50’s Interested in Using Various Technologies to Interact with Advisors<br />Source: Cisco IBSG Economics Practice, November 2010<br />
    18. 18. Survey Findings: Testing Scenarios<br />18<br />3<br />
    19. 19. Scenario 1: Service to Provide Access to Firm and Other Experts <br />Receive access to multiple experts with specific expertise such as accountants and lawyers<br />Service coordinated by primary financial advisor<br />Meetings take place using high-definition video available in financial advisor’s office<br />Source: Cisco IBSG, November 2010<br />
    20. 20. 20<br />Business Context: Under-50 Investors Consult Several Professionals…<br />Not including your financial advisor, which of the following professionals do you consult about matters related to your investments?<br />Sample Size = 705<br />Source: Cisco IBSG Economics Practice, November 2010<br />
    21. 21. 21<br />…Are Interested in Using High-Definition Video…<br />Percent “interested” and “very interested” in using high-definition video in financial advisor’s office to meet with multiple experts <br />63%<br />Very <br />Interested<br />30%<br />21%<br />Interested<br />Sample Size = 1,000<br />Source: Cisco IBSG Economics Practice, November 2010<br />
    22. 22. 22<br />…And Are Willing to Move Investments to Receive Service<br />Percent who would move investments to access high-definition video from advisor’s office to meet with multiple experts <br />Sample Size = 1,000<br />Source: Cisco IBSG Economics Practice, November 2010<br />
    23. 23. 23<br />…And Are Willing to Move Investments to Receive Service<br />Percent who would move investments to access high-definition video from advisor’s office to meet with multiple experts <br />$18.6 B (Under-50s)<br />$28.6 B overall<br />Sample Size = 1,000<br />Source: Cisco IBSG Economics Practice, November 2010<br />
    24. 24. Scenario 2: Service to Give Access to Online Investor Community<br />Investors given access to an online investor community (social network) to discuss strategies, ideas, stock picks with other investors<br />Investors could follow trades of other investors, chat online, etc. <br />Source: Cisco IBSG Economics Practice, November 2010<br />
    25. 25. 25<br />…And Are Open to Joining Investor Communities<br />Percent “interested” and “very interested” in investor community (social network)<br />66%<br />Very <br />Interested<br />23%<br />14%<br />Interested<br />Sample Size = 1,000<br />Source: Cisco IBSG Economics Practice, November 2010<br />
    26. 26. 26<br />Business Context: Under-50 Investors Using Social Networks, Blogs<br />Technology usage for managing and discussing investments (By age)<br />Sample Size = 1,000<br />Source: Cisco IBSG Economics Practice, November 2010<br />
    27. 27. A Segmented Approach to Next Generation Wealth Management<br />High-Touch<br />Ultra-High- <br />Net-Worth Under-50s<br />> $ 30 M<br />Capabilities To Offer<br />In-person, coordinated virtual<br /><ul><li>Customized services (e.g., Virtual Family Office)</li></ul>High-Net-Worth & Affluent Under-50s<br />> $3 M<br />Frequent in-person, blended with virtual<br /><ul><li>HD video meetings with financial experts and/or family members
    28. 28. Virtual mtgs., video messages from advisor</li></ul>Mass- <br />Affluent Under-50s<br />$0.5- $1 M<br />Primarily virtual, blended with in-person<br /><ul><li>Time-efficient FA interactions
    29. 29. Access to FA via technology endpoints </li></ul>“Adviser-less” Investors<br />< $0.5M<br /><ul><li>Rich online self-service with on-demand FA access
    30. 30. Investor communities</li></ul>Orchestrated self-service<br />Self-Service<br />Source: Cisco IBSG, 2010<br />
    31. 31. Leading Use Cases to Get Started<br />Internal teaming / mentoring / specialist involvement<br />Bringing firm expertise to client and prospects more quickly and more often<br />Involving experts to close deals more quickly<br />“Virtual” offsite for client VIPs (build loyalty)<br />Staying well connected to client despite their location (reduce attrition)<br />Connecting to next generation / Holding family financial meeting<br />Establishing firm as a leader (to clients, employees)<br />Source: Cisco IBSG, 2011<br />
    32. 32. In Closing....<br />Wealth Management industry on the brink of change as clients – especially those under 50 – are not satisfied with existing choices<br />New ways of interacting, especially high quality video, seen as a differentiator<br />With $18 B of revenue at risk, firms now piloting and deploying these capabilities<br />Source: Cisco IBSG, 2011<br />
    33. 33. For more information on this research and the Cisco IBSG Financial Services Practice, visit http://www.cisco.com/go/ibsg/financialservices<br />

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