Millionaires prefer DFM services: global report
High net worth (HNW) individuals are more likely to opt for discretionary mandates above other services, according to financial services research and insight firm Verdict Financial.
The company’s latest report analyses the demand for discretionary asset management – as well as factors fueling interest in such services – of HNW investors in 17 countries covered by Verdict Financial’s 2016 Global Wealth Managers Survey.
Although 52% of millionaires’ investable assets are managed on a discretionary basis globally, the level of interest in such services varies significantly between markets, with Singapore, the UK, and the US the most reliant on discretionary services. HNWs in Singapore, the UK, and the US have an average of more than 70% of their portfolios placed in discretionary mandates – the highest share across the globe. These are all developed markets, where the uptake of discretionary asset management is generally higher than in emerging economies.
Such services are a perfect match for Clients lacking the time and expertise to manage their investments, both major factors driving demand for discretionary mandates. However, trust plays an important role as well. Investors will be skeptical about giving up control over the investment decisions to advisors they do not know well and do not have a relationship with.
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