World	  wealth	  reports:	  Worth	  their	  weight	  in	  gold	  or	  wearing	  thin	  amidst	  a	  waterfall	  of	  w...
Ronald	  Reagan	  once	  called	  information	  the	  “oxygen	  of	  the	  modern	  age”	  because	  it	  “seeps	  through...
 	  I	  got	  plenty	  back	  for	  my	  time.	  	  According	  to	  the	  RBC	  Capgemini	  2012	  World	  Wealth	  Repor...
Now,	  we	  often	  have	  more	  data	  than	  we	  know	  what	  to	  do	  with.	  	  So,	  how	  does	  data	  become	 ...
Scaling	  back	  the	  information	  you	  consume	  and	  focusing	  in	  on	  world	  wealth	  reports	  that	  offer	  ...
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World wealth reports: Worth their weight in gold or wearing thin amidst a waterfall of wisdom

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With the recent release of BCG’s Global Wealth 2013 to devour and the RBC Capgemini World Wealth Report due to follow soon, Seb Dovey takes time out of the wealth report season to question the changing role of such publications.

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World wealth reports: Worth their weight in gold or wearing thin amidst a waterfall of wisdom

  1. 1.    World  wealth  reports:  Worth  their  weight  in  gold  or  wearing  thin  amidst  a  waterfall  of  wisdom    With  the  recent  release  of  BCG’s  Global  Wealth  2013  to  devour  and  the  RBC  Capgemini  World  Wealth  Report  due  to  follow  soon,  Seb  Dovey  takes  time  out  of  the  wealth  report  season  to  question  the  changing  role  of  such  publications.          “What  if  a  person’s  native  or  learned  abilities  to  process  information  sensibly  could  be  warped  by  feeding  junk  into  the  mental  machine?”    -­‐  Clay  Johnson,  The  Information  Diet:  A  Case  for  Conscious  Consumption    
  2. 2. Ronald  Reagan  once  called  information  the  “oxygen  of  the  modern  age”  because  it  “seeps  through  the  walls  topped  by  barbed  wire,  it  wafts  across  the  electrified  borders.”    Fast  forward  to  today  and  the  walls  have  come  down  –  both  literally  and  metaphorically  –  and  information  flows  faster  than  ever  before.    If  you  stack  a  pile  of  CD-­‐ROMs  on  top  of  one  another  until  you  reach  the  current  global  storage  capacity  for  digital  information  it  would  stretch  about  80,000km  beyond  the  moon.    The  democratization  of  knowledge  can  save  lives    On  the  one  hand,  more  information  is  fantastic.    Enabled  by  online  technology,  the  democratization  of  information  has  boosted,  and  will  continue  to  help,  the  development  of  emerging  economies  and  the  spread  of  genuinely  life-­‐enhancing  messages  about  health  or  human  well-­‐being.    But  the  danger  lies  in  the  fact  that  information  alone  hardly  ever  equals  knowledge.    But  lives  can  be  wasted…  wading  through  worthless  information    According  to  IDC,  75%  of  digital  information  is  generated  by  individuals  so  how  do  we  know  whether  those  individuals  are  qualified  in  any  way  to  filter  or  collate  the  information  they  generate  and  share?    Clay  Johnson,  who’s  words  begin  this  piece,  wrote  a  whole  book  urging  us  to  consume  information  more  consciously  or,  if  you  will,  to  put  ourselves  on  an  information  diet:  “garbage  in,  garbage  out.    We  know  we’re  the  products  of  the  food  we  eat.    Why  wouldn’t  we  also  be  products  of  the  information  we  consume?”    What  do  wealthy  investors  want?    To  illustrate  the  glut  of  information  that  threatens  to  overwhelm  us,  I  ran  a  quick  Google  search  on  ultra  high  net  worth  investors,  tapping  in  “what  do  UHNW  investors  want”:    
  3. 3.    I  got  plenty  back  for  my  time.    According  to  the  RBC  Capgemini  2012  World  Wealth  Report  there  are  c.100,000  ultra-­‐HNWI  globally  ,  representing  a  tiny  fraction  of  the  estimated  7  billion  people  in  the  world.    Yet  despite  the  small  size  of  the  UHNW  segment,  plenty  of  people  are  willing  in  to  step  in  and  explain  what  these  UHNW  investors  want.    210,000  results  pop  up  in  Google    (one  suggestion  per  UHNWI  and  some  left  over)  but  how  many  offer  valuable  knowledge  as  opposed  to  questionable  information?    Google  itself  acts  as  a  partial  filter,  ranking  results  using  its  own  algorithms,  but  that’s  still  a  lot  of  information  to  wade  through.    Take  it  a  step  further  and  tap  in  “what  do  HNW  investors  want?”  and  some  1,530,000  results  emerge.    Given  that  the  same  2012  World  Wealth  Report  suggests  that  there  are  c.11m  HNWI  throughout  the  world  that’s  a  better  ratio,  of  results  to  individuals  but  still  rather  a  lot  of  competing  opinions.    Data  alone  doesn’t  equal  information    Knowledge  begins  with  data  and  historically  data  has  been  the  main  prize  on  offer  from  world  wealth  reports.    Roll  the  clock  back  even  just  a  few  years  and  the  access  to  data  about  global  wealth,  about  UHNWI,  about  asset  managers,  about  any  and  every  aspect  of  wealth  management  was  in  much  shorter  supply  than  it  is  today.    Back  then  there  was  a  genuine  need  for  solid  data.    For  facts.    
  4. 4. Now,  we  often  have  more  data  than  we  know  what  to  do  with.    So,  how  does  data  become  information?    Information  is  data  made  useful    That’s  a  line  that  jumped  out  at  me  recently  when  I  read  Attenzi:  A  Social  Business  Story,  a  fictional  story,  written  by  Philip  Sheldrake,  about  a  CEO,  Eli  Appel,  who  takes  his  firm,  Attenzi,  on  a  journey  to  becoming  a  social  business.        To  borrow  further  from  Eli  Appel:    “We  mere  humans  do  not  readily  digest  or  understand  data.    Rather,  we  deal  in  information;  that  is  data  made  useful,  made  relevant.    A  collection  of  data  is  not  information  –  for  that  it  also  requires  context  and  understanding.    How  do  you  determine  the  value  of  the  information  and  knowledge  prior  to  the  translation  of  data  into  information  and  knowledge?    Perhaps  the  best  we  can  achieve  is  simply  to  have  a  good  guess  at  whether  the  potential  information  and  knowledge  we  might  unearth  will  make  anyone  act  on  it.    Or  perhaps,  more  precisely,  will  anyone  change  what  they  would  have  done  otherwise?”    It’s  an  interesting  question  to  level  at  world  wealth  reports.        We  know  that  there  is  a  large  industry  of  wealth  management  professionals  eager  to  learn  what  investors  want.    We  know  that  there  is  a  large  contingent  of  UHNWI  who  don’t  feel  well  served  by  current  wealth  management  models?    But  do  world  wealth  reports  do  anything  to  change  that?    Does  the  data  –or  information  –  they  contain  make  anyone  do  anything  differently  or  are  they  actually  in  danger  of  becoming  PR  machines  that  give  the  world  and  his  wife  an  excuse  to  quote  a  press  release  or  share  some  topical  stats?    Information  is  applied  using  insight    I  think  the  missing  link  is  insight.    Knowledge  comes  from  turning  information  into  actionable  insights  that  can  help  wealth  managers  take  concrete  steps  towards  growing  their  business,  attracting  and  retaining  asset  or  engaging  with  wealthy  clients.    R.O.I  (return  on  information)    
  5. 5. Scaling  back  the  information  you  consume  and  focusing  in  on  world  wealth  reports  that  offer  insight  is  certainly  one  way  to  a.  reduce  information  overload  and  b.  create  a  better  return  from  the  information  you  turn  your  mind  to,  but  there’s  still  the  question  of  who  to  trust?        There’s  probably  no  easy  answer  to  that  one,  but  I  will  offer  up  some  standards  I  think  all  wealth  repots  should  meet:    3  rules  for  insight  led  wealth  management  intelligence    1. Wealth  reports  must  use  insight  to  turn  data  to  actionable  insight  2. That  insight  should  be  gathered  by  experts  using  a  mixture  of  quantitative  and  qualitative  research  methodology  3. Those  experts  should  have  access  to  time-­‐series  data  and  a  depth  of  experience  that  allows  them  to  separate  the  wealth  trends  with  longevity  from  red-­‐herrings  that  emerge  from  spurious  data  spikes.    If  world  wealth  reports  followed  those  rules,  I  think  more  people  would  genuinely  change  what  they  would  have  done  otherwise.    If  more  wealth  managers  applied  similar  rules  to  the  information  they  share  with  clients  and  challenged  themselves  in  the  same  way  to  provide  information  that  can  genuine  help  and  influence  their  clients  then  they’d  probably  see  more  investors  changing  what  they  would  have  done  otherwise  too,  and  that  change  might  just  involve  a  boost  in  client  retention  or  assets  under  management.        About  the  author:        Sebastian  Dovey  is  Managing  Partner  at  Scorpio  Partnership  the  leading  consumer  insight  and  strategy  consultancy  to  the  global  wealth  industry.    15  years  ago,  Seb  helped  set  up  Scorpio  Partnership  to  realise  his  vision  of  a  global  strategy  think  tank  focusing  on  private  investor  benefits  in  wealth  management,  proving  that  there  is  a  different  way  to  be  a  knowledge-­‐based  management  consultancy.    Over  the  past  15  years  the  firm  has  worked  with  over  125  institutional  and  individual  clients,  won  numerous  awards  including  a  recent  award  for  outstanding  thought  leadership  in  Asian  wealth  management  and  now  boasts  the  largest  database  of  UHNWI.        Seb  has  a  background  in  publishing,  including  a  three-­‐year  stint  at  managing  editor  of  the  Institutional  Investor  publication  and  regularly  presents  at  global  wealth  management  events.  

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