A new report has found a majority of high-net-worth individuals are open to working with large technology companies for their financial services needs, presenting risks and opportunities for advisers.
The Capgemini World Wealth Report 2017 found that 56.2 per cent of high-net-worth investors (those with more than US$1 million in disposable assets excluding their primary residence) were open to using ‘BigTech’ firms such as Google and Amazon for their financial services needs.
Speaking to ifa, Capgemini banking and capital markets industry practice leader Philip Gomm said this highlighted a change in client trust.
“That’s a very strong indication that the trust issue – which has historically rested principally with the primary financial services adviser – is now shifting in favour of ‘BigTech’,” he said.
“I think the recognition is that BigTech have access to data in vast quantities and analytics capabilities in terms of being able to derive insights from that data which extend beyond the capabilities of their face-to-face legacy wealth adviser.”
The report’s findings should be taken as a “wake-up call” for advisers, Mr Gomm said.
“This movement in trust – which has really only come about recently – is an indicator of the future, and it presents both growth opportunities and challenges,” he said.
Mr Gomm said wealth management firms needed to “be aware of the threat that’s emerging” from the BigTech sector, and that while partnerships between advice practices and tech companies could present growth and innovation opportunities, there is a risk BigTech firms will gain insight into the sector and “become very formidable competitors”.
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 23 Oct 2017IFAs drive exchange-traded bond demandBy Jessica Yun
- 23 Oct 2017Fiducian prepares for leadership transitionBy Staff Reporter
- 23 Oct 2017Industry association for insurance tech launchesBy Staff Reporter
- 23 Oct 2017Instos ‘struggling’ with IFA ascendancyBy Aleks Vickovich
- 23 Oct 2017CBA bosses accused of incompetenceBy Aleks Vickovich
- 20 Oct 2017Parliamentary insurance group formedBy Staff Reporter
- view all