Data & Analytics Insights

The future of wealth: key insights in North America

Derek Schure

Sales Director, LSEG

LSEG’s latest sponsored research looks at the changes that are impacting the wealth industry today and unpacks the views of respondents across the globe.

  • In late 2023, LSEG sponsored detailed research to better understand changing preferences and emerging trends within the wealth industry.
  • We asked investors across the globe about how changes in the wealth industry are impacting them.
  • This insight looks specifically at some key attitudes and opinions of respondents in North America. 

Accelerating digitalisation continues to re-shape the wealth industry, with a range of implications for all stakeholders, from wealth firms and advisors to self-directed investors and those offering digital investment products and services.

The research was broad and asked respondents to answer questions relating to how the role of financial advice is evolving; the impact of experience on investor behaviour; attitudes towards AI in investment; and gaps in the sustainable investment space.

To better understand the changes that are unfolding, LSEG sponsored detailed research across the wealth industry. Conducted by ThoughtLab, the research included two global surveys, one of 2,000 investors across countries, wealth levels, ages, lifestyles, occupations, genders and other characteristics, and the second of senior executives at 250 investment providers.

Alongside several global insights and conclusions, we have also distilled some key regional insights, and here we unpack the three key take-aways relating to North America. 

Key take-aways for North America

Our research reveals three key insights relating to North America: 

1. Respondents in North America appear to value personal relationships

North American respondents appear to place more value on personal relationships, a view that is supported by the finding that they are significantly more likely to work with a smaller range of providers than those in other regions. A substantial 62% of these respondents say they engage with 3 or fewer providers. Comparative figures elsewhere are much lower: 48% APAC and 52% in EMEA.

North American respondents are also the least worried about a lack of diversification in the next three years, with just 9% expressing this as a concern.

Despite having fewer providers, they are the most likely region to use a personal investment advisor or advisory team, with 60% expressing this preference.

2. They are not satisfied with the current status quo

Respondents in the region are significantly less likely to be satisfied with the performance of their investment portfolios than those in other regions. Just over half (56%) say they are ‘somewhat’ or ‘very’ satisfied with performance, as opposed to significantly higher percentages in APAC (64%) and EMEA (64%).

In addition, 46% are concerned about increased market volatility in the next three years, but only 41% (against an average of 51% overall) agree that because of market volatility and complexity, they are more willing to pay a fee for financial advice.

3. They are most likely to embrace technological innovation

North American respondents are significantly more likely to welcome AI-enabled processes across various tasks than those in other regions.

In some areas – such as researching products and services and reviewing account information – they would prefer to use AI rather than a financial advisor, and across most areas  they would prefer to use a low-cost digital platform.

What does this mean for industry participants?

Our findings show that respondents in North America assign substantial value to personal relationships in the wealth industry. This presents an opportunity for advisors and providers in the region to add value by delivering trusted advice and personalised recommendations. Advisors and providers should, however, remember that these investors have high expectations, and that many are not as happy with current performance as they could be. This means that both performance and personalised experiences need to be prioritised going forward.

Areas of greatest advisory value for investors, categorised by use of a financial advisor

Given the propensity of North American respondents to embrace technology, platforms catering to self-directed investors also have a real opportunity to offer a range of services to tech-savvy investors but must keep in mind that cost remains a key factor for many.

About the research

The research covered four regions – Asia Pacific, Europe, the Middle East, and North America. By wealth level, the largest shares comprised mass affluent (25%) and high net worth (25%), followed by very high net worth (18%). By age, the largest share consisted of Gen X (31%), followed by Baby Boomers (30%).

The study also included a benchmarking survey of senior executives from a cross section of 250 wealth management firms, from independent wealth advisors and private banks to wealth management divisions within regional and international banks.

[1] Areas include: research products and services, portfolio analysis, asset allocation, tax loss harvesting, portfolio re-balancing, executing transactions, getting consolidated views of accounts across financial institutions, receiving investment advice, tracking performance against life goals, tracking performance against financial benchmarks, reviewing account information, updating personal account information.

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