Wealth managers must raise game to meet needs of internationally mobile

Relocating to live and work is now part and parcel of modern life. And notably, this is a growing trend for high net worth individuals (HNWIs) with many relocators finding themselves, on average, €1m ($1.2m) wealthier than those who stay at home. 

Scorpio’s latest research, in conjunction with OneLife, indicates that one in four HNWIs have moved at least once from their country of origin, and a further 13 per cent intend to relocate in the future. Digging deeper, the share of current (43 per cent) and future (20 per cent) relocators rise among the under 35s – suggesting there is increasing urgency, and indeed opportunity, for wealth managers to develop solutions and services that better meet the needs of the internationally mobile wealthy. 

This, however, is no easy feat as their financial requirements span the complexity spectrum – from transactional elements like day-to-day banking through to more intricate strategic areas like managing international tax commitments. 

As such, their wealth management wish list also reflects the breadth and depth of this. Tax advice, for example, is deemed requisite for an international wealth proposition among almost half of the relocator segment and is especially important for over 55s (see chart). 

Meanwhile, younger HNWIs place more emphasis on products which can facilitate their tax efficiency. Indeed, when compared with the HNW average (27 per cent) and over 55s (18 per cent), we see a significantly larger proportion of millennials (39 per cent) believing life assurance is a necessity for an international wealth management proposition. 

In spite of these proposition preferences, there is a sense that wealth managers are currently falling short when it comes to serving the international wealthy – both in the run up to their move and during the process. 

For example, only one in three HNWIs say they discussed their financial concerns with their wealth adviser prior to the international move, and just 40 per cent feel that their investments are as tax efficient as they need to be. 

And while older HNWIs are more likely to stay with their pre-existing financial adviser following an international move; the same cannot be said for under 35s – 41 per cent of who have no reservations about changing to a new institution. 

What is more, approximately a third of them believe their current wealth manager would not understand their international financial needs and that the digital services currently on offer are incapable of helping them manage wealth remotely.

To improve the offering to this growing group, wealth managers need to reconsider both their international advisory capabilities and the delivery model. 

This is critical because even though an international lifestyle may not be perceived as having a material impact on wealth creation – the relocators we surveyed are wealthier than those who stayed at home. 

Firms who develop the right proposition, advice and delivery model for wealth’s wanderers could stand to be richly rewarded. 

Annie Catchpole is director at wealth management think-tank Scorpio Partnership