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Wealth advisers should target mass affluent, says CEB

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Confidence levels have risen by almost 5 per cent since 2013, particularly among the ‘mass affluent’ – those with USD100–999k of investable assets, according to a new report by best practice insight and technology company CEB.

The biennial report reveals that Consumer confidence levels among this group have risen by more than 10 per cent in the last two years, ahead of the high-net-worth (HNW) consumer group which has seen a 6 per cent rise.
 
Made up largely of the middle age demographic, it is this group that is keen to invest their accumulated wealth, purchasing more savings products in the last six months than any other demographic. CEB believes advisers would be wise to tailor their offer to capture this proactive market that has funds to invest, not just rely on the HNW or millennials.
 
The newly confident mass affluent means they are also looking to boost their own proactive management of their finances, with 40 per cent of this segment globally now committing to formal budgeting, planning for the long-term and using a financial planner.
 
CEB says wealth managers shouldcustomise their offerings for this demographic before others do. The rise of robo-advisers has been one attractive option for the mass affluent. Almost two thirds (64 per cent) of wealth managers say that tailoring advice to customer needs and educating them about their options was deemed a crucial priority for the year ahead, including for the mass affluent.
 
Wealth managers must also be cognizant of the influence of outsider influences on this client segment, with the potential for fragmenting assets a real threat. Two years ago, 70 per cent of the mass affluent demographic made significant financial changes based on content found on social media – from adapting their relationships with their advisors to reallocating their investments altogether.
 
Peter Aykens (pictured), Financial Services Research Leader at CEB, says: “Advisors must focus on delivering goal-oriented outcomes for their clients who are within the mass affluent bracket. They are challenged by more practical concerns than the high-net-worth segment.
 
“Innovating and aligning product offerings that help these clients reach their goals, such as property purchases and building savings, will ultimately be a more effective strategy than overleveraging on social media marketing or offering the shiniest new app.”

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