Wealth firms are missing a trick by not targeting a client group dubbed the Henrys - high earners not yet rich - by analysts at KPMG.
A report from the accountant suggested that enterprising asset managers should look to demographic segmentation for client growth, following a decade of secular stagnation and low wealth growth.
‘The opportunity to identify and target the ideal future customers — the Henrys - has never been easier thanks to the availability of big data and appetite among Generation Y and millennials to throw off the brand loyalty of the previous generation and look elsewhere,’ said the report.
‘But successful targeting of this segment will require a rethink of the end-to-end business model, including how and what to charge for, the range of propositions on offer, and how to win hearts as well as minds.’
Just 50% of firms have active customer retention measures in place, accroding to KPMG.
‘Despite current market turmoil and increasing competition on multiple fronts, a surprising number of wealth management firms do not work proactively at client retention,’ the report stated.
The auditing firm accused wealth firms of remaining passive, believing clients will never leave them or that any leakage is immaterial.
‘Successful firms will appeal to their customers at every life stage, recognising that goals change as people age,’ it added.