A substantial 95 per cent of UHNW American families regard innovation as a key factor in their ability to continue being successful, and these families have simultaneously come to realize that doing so requires an ability to adapt to “changing conditions,” including the potential reinvention of business/financial strategies. 

“Wealthy families are craving new ways of communicating and collaborating with their advisors, and new strategies for building and sustaining wealth,” said Michael Farrell, managing director for SEI private wealth management. “After everything that's gone on in recent years, they understand that sometimes it takes a different approach to be successful.”

However, the consensus is less uniform on where this innovation will come from. Under half of respondents believe that professional advisors are the “most likely source of innovation”, while over a third expect innovation to stem from those in business, and a further third expect innovation to come from younger family members.

The issue is important as, due to the way families expand over generations, combined with the difficult environment for generating reliable income, families are realizing the importance of inspiring younger generations to maintain living standards.

Interestingly, despite the prevailing expectation that professional advisors are the primary source of innovation, the survey revealed that just 2 per cent of respondents consider wealth management as the most innovative industry . Moreover, the survey indicates that there is “no real consensus” among wealthy families in terms of which areas of wealth management have seen the most innovation. 

For example, according to 11 per cent of those polled, investment products are the area that has seen the most innovation. The poll underlined that investment advice was the area of wealth management that has seen the least innovation, as stated by 14 per cent of respondents, followed by reporting , and education and family communications . 

Again, these findings highlight the importance for firms to develop new services such as goals-based planning and family dynamics offerings - an approach many are moving towards at the moment.

In response to the study’s findings, SEI has identified some of the innovative practices which are emerging within the wealth management industry, including: 

- Real-life advice: it is important to take into account qualitative factors such as behavioural and decision-making process, as opposed to focusing solely on quantitative measures such as financial calculators and mobile phone apps;

- Designer investments: a new definition of investment, advocating objective, targeted and risk-adjusted strategies, as opposed to a “one-size-fits-all” approach, and

- Reporting progress: investors should have access to balances and transactions.        

The survey involved over 100 individuals, representing families with at least $20 million in financial assets. It was carried out by independent research firm Scorpio Partnership.