There's a big misunderstanding between wealth managers and their Singaporean clients

Local clients demand clearer fee structures, better mobile apps.

Singapore's largest banks are pinning their hopes on wealth management to shore up earnings as loan growth dims. However, a new report reveals that local clients may not find their local wealth managers up to scratch due to a mismatch in expectations.

The report, which was conducted by EY and Oxford Economics, showed that Singapore-based clients are particularly picky when it comes to transparent fee structures. Currently, 42% of clients are being charged based on transactions, with just 13% charged on a fixed fee. EY reckons that most clients prefer a fixed or annual structure.

“Singapore clients are becoming more savvy about fees. They want to know what they are paying for and seek clarity in fees," said Mark Wightman, Partner, Wealth & Asset Management, Ernst & Young Advisory.

Wealth managers also need to catch up with their clients' digital demands. The study showed that 57% of APAC managers expect personal interactions with clients to remain their primary channel, compared with just 32% of clients whose preferences are instead shifting to digital.

In fact, by 2018, digital channels will become increasingly popular across the region – wealthy clients in mainland China and Singapore indicated a preference for mobile apps, while Japan, Australia and Hong Kong prefer online advice interaction.

"It is not surprisingly that they are turning to digital channels and automated advice, where demands of meeting financial goals can be met with a better customer experience and clear explanation of the fees being paid,” explained Wightman.

While wealth managers globally believe that an understanding of financial goals (75%), quality and frequency of interactions (52%) and investment performance (50%) are the top drivers of client experience, Singapore-based clients believe that investment performance (67%), understanding of financial goals (35%), and transparency in fees and portfolio management (34%) are the most important aspects of wealth management.

“Wealth assets in APAC continue to accumulate at three times the rate as the rest of the world. Managers will need to bridge the gap in client expectations across very different markets to capture and consolidate these assets,” Wightman said.