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Avoiding common misconceptions in wealth management

Sabrina Bailey
Sabrina Bailey
Global Head of Wealth Management, Refinitiv, An LSEG (London Stock Exchange Group) business

New Refinitiv research delivers on-the-ground data and insights that challenge some persistent misconceptions in the wealth management arena.


  1. As digital, social and regulatory shifts persist, wealth providers must challenge long-held perceptions, and re-evaluate their strategies in line with changing investor needs and preferences.
  2. A new Refinitiv-sponsored survey of more than 2,000 investors and 500 firms challenges persistent misconceptions about investors that are no longer relevant in the post-COVID-19 wealth arena.
  3. The research finds that wealth firms can drive gains by providing innovative investment ideas, managing their fee levels and processes and shifting their attention to cover all generations of investors.

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As digital, social and regulatory shifts continue to redefine the wealth industry, wealth providers need to ensure their products and services align with actual investor needs and wants.

For decades, there have been long-held perceptions that have shaped strategy, but ongoing transformation within the wealth arena – accelerated by the ripple effects of COVID-19 – has changed the landscape.

Against a backdrop of altered investor views, many long-held ideas about investor relationships and behaviours are now little more than misconceptions.

Refinitiv’s latest research seeks to challenge these by revealing the on-the-ground insights that highlight why many providers need to adopt a new approach.

Challenging misconceptions in wealth management

1. Providers can drive gains by consolidating client assets

What the research reveals:

When respondents were asked if they would prefer fewer or more wealth providers in the future, 53 percent of investors said that they favour staying with the same number, while 42 percent would prefer to increase the number of providers they use. Only 6 percent favour fewer providers going forward.

Interestingly, the top reasons cited for preferring more providers were:

  • To diversify risks (45 percent)
  • To access more products and services (44 percent)
  • To achieve better performance (42 percent)

42% of investors would prefer to increase the number of providers they use to diversify risks, access more services and achieve better results

Read the report – Debunking wealth management myths: Three outdated assumptions about investors

2. Personal relationships are the key differentiator

What the research reveals:

While personal relationships will always be important in the wealth industry, they are no longer the only, or even the most important, way to attract and retain investors.

Interestingly, our research highlights that the top way providers look to differentiate themselves is still through personal relationships (cited by 73 percent), but the top way investors say firms can attract them is through providing innovative investment ideas and insights (cited by 57 percent).

The top three criteria investors use when selecting a provider are:

  • Intuitive digital experiences
  • Ethical business practices
  • Active management and tax efficient products

57% of investors say firms can attract them through providing innovative investment ideas and insights

3. Investors are largely happy with fees and pricing structures

What the research reveals:

Contrary to this assertion, just 37 percent of those questioned said they are happy with their provider’s fees, and a similarly low percentage (36 percent) are happy with current pricing structures.

Firms should take heed, since this means that significant percentages – nearly two-thirds – of investors are dissatisfied and may even switch firms if the issue is not addressed.

Among the top reasons cited for investors switching firms:

  • A fee structure that better meets my needs (23 percent)
  • Lower fees (19 percent)

Just 37% of investors are happy with their provider's fees and only 36% are happy with current pricing structures

4. Generational wealth transfer is shifting provider focus to millennials

What the research reveals:

In fact, providers are planning to shift more attention to both baby boomers and millennials, with a proportionally greater focus on the older segment.

Within two years:

  • The focus on baby boomers is predicted to grow from 63 percent to 80 percent
  • The focus on millennials is predicted to grow from 61 percent to 66 percent

Baby boomers are now working and living longer, and consequently many providers view this segment as a strong and viable target for financial services.

Responding to real investor needs

These findings highlight several important points, one of which is that conventional wisdom is no longer relevant in a marketplace that has been redefined by a range of factors, including widespread digital transformation and the effects of the pandemic.

Moreover, it is essential that firms leverage real-world insights based on trusted data so that they can understand the new market realities that will define the wealth space going forward.

Looking ahead, providers need to take stock of their current business models and, where necessary, reconsider their strategies; respond to investor needs; and ensure that their offerings align with actual client requirements.

Given that 44 percent of those surveyed confirmed that they will switch providers within the next two years to get what they want, providers not only need to re-formulate strategy using evidence-based research, but they need to do so with some urgency.

Debunking wealth management myths: Three outdated assumptions about investors