There is an increase in the number of wealth managers turning clients away because they fall beneath the minimum investment thresholds according to B2B fintech firm Nucoro.
Nikolai Hack (pictured), COO and UK MD of Nucoro, says: “Wealth managers are facing growing costs through increased regulation and compliance issues, and margins are also coming under pressure as fees fall. This means more wealth managers are choosing to only work with clients with larger investment portfolios and this is adding to a growing ‘advice gap’, where retail investors are finding it harder to secure the help they need to manage their investments.”
The average wealth manager turns away 72 clients every year, with 33 per cent of respondents claiming they have had to turn away more potential clients in the last 12 months than they did three years ago. Just 2 per cent of wealth managers said they are turning away fewer potential clients than in the past, while 49 per cent say that the number hasn’t changed.
While a fifth (20 per cent) of wealth managers allow clients with assets of less than GBP10,000 to invest, the majority have a minimum investment of GBP50,000 to cover the cost of servicing, with some 11 per cent of wealth managers insisting on an investment of at least GBP250,000. The average minimum investment per client is GBP115,000.
Hack says: “Greater digitisation will help wealth managers reduce their costs, improve their offerings and take on more clients.”
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