The UK's high net worth population is becoming increasingly attracted to the idea of investing ethically, as well as seeking more personalised service levels, Consultant Datamonitor says in a new report.
The UK High Net Worth Customers 2005 report highlights a 12% growth in the number of HNWIs last year - or those with more than £200,000 in liquid assets – to a total estimated at 916,000 people and forecasts that number will hit 1.3 million people by 2009.
Private banks and others looking to grow their own customer base as a result will have to recognise issues such as the environment are playing an increasing role in financial decisions, suggests Datamonitor.
There has also been a shift in the type of SRI issues being considered as research suggests SRI is no longer about cigarettes and low wages in Africa, but now focuses as much on “positive” investment as much as “negative”, Datamonitor states.
One reason for the shift is private fund investment managers now hold meaningful amounts of key companies, with consolidations helping solidify their corporate voting power.
Along with the new investment focus comes a new view of service levels as there is rising demand for personalised services and relationship management to ensure the client does not feel pressured by a sales environment, but instead “loves coming to see his or her adviser,” Datamonitor says.
Having a good brand helps attract clients, but because of the demand for improved service levels, clients are becming more willing to switch advisers.
If client churn in the HNWI market approaches, for example, the general retail banking market then private banks and others will face an increasingly tough time retaining clients.
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