The conversation on private markets is changing among Wealth Managers, according to a recent report by Delio.
Private markets are going mainstream, as Wealth Managers increasingly establish or grow private market propositions. Nine out of ten surveyed already offer private market propositions or are planning to launch one; with direct investments and impact investments emerging more and more in the market.
A key driver for this change in attitude is client demand, as a third of private clients’ wealth is now allocated to private assets. Structural changes within the industry, such as increased commoditization and competition; a shift toward more holistic advice; and the increasing importance of entrepreneurial clients, have led Wealth Managers to pay closer attention to this demand and meet the needs of their clients.
A Head of Family Office at a Tier One Bank echoes this finding: “Private markets are quickly becoming table stakes when dealing with Ultra High Net Worth clients. A proposition is simply no longer a nice-to-have.”
The report estimates that the popularity of the offering will continue to grow and evolve due to competition and the risk of losing clients. The consequences of not providing private market solutions are already becoming evident. One in four Wealth Managers surveyed admitted to losing a client by failing to embrace this market.
Nine out of ten surveyed already offer private market propositions or are planning to launch one
Although private assets are increasingly on the Wealth Manager’s agenda, several challenges limit Wealth Managers from launching or scaling an offering. While regulation remains a key factor, a lack of internal resource and expertise also play a role in preventing Wealth Managers that do not have a private market proposition from establishing one.
Technology will play a vital role in overcoming these challenges and, ultimately, supporting the Wealth Managers who are looking to expand into this market. It is democratising access to private assets and driving resource efficiencies that will help Wealth Managers to deepen their offering.
David Newman, Co-Founder and Chief Commercial Officer at Delio, said: “Our results highlight that Wealth Managers increasingly understand the role private assets play in attracting and retaining clients.
As the number of institutions creating or scaling private market propositions continues to grow at an unprecedented rate, Wealth Managers must evolve to stay relevant to clients and keep pace with the competition. At Delio, we understand how technology can help overcome many of the challenges cited by Wealth Managers, and we are proud to support our clients in responding to this trend.”
