The digital world of the Futurewealthy · 2012-11-29 · Figure 1: The digital world of the Futurewealthy … TECH SAVVY Devices used 83% own a Laptop own a Smartphone 46% own a MP3

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The Futurewealth Report 2012-2013

The digital world of the Futurewealthy

Part 1 November 2012


FOREWORD In 2009, we launched the Futurewealth project aimed at understanding more about the ambitions and consumer attitudes of the world’s up-and-coming wealthy. It is hard to believe that back then the iPad had yet to be launched and Facebook was just beginning its sprint from 150 million users to one seventh of the world’s population today. In this day and age, having a passionate, customer-centred business is only half the story. Going forward, every major business is faced with a digital imperative – work out how to adopt this technology, or risk being left behind. It was with this thought in mind that we launched our fourth phase of Futurewealth research this year. Once again, we are delighted to have had responses from thousands of individuals around the world who are all on the fast-track to wealth. Their input has helped us to understand how they, the Futurewealthy, are interacting with technology, digital media and communication tools of all kinds. More importantly, it has helped us to understand how they are using this technology to create, manage, spend and invest their wealth. In tune with our digital theme, we are also changing the way we present the Futurewealth report. This year, we will publish a series of four short papers on related themes. But, we also plan to distribute many more of the findings than before through a whole range of digital media. In this, our first paper, we explore the digital world of the Futurewealthy. We look at how they connect to the Internet. We look at the role it has played in their wealth creation so far and the role they expect it to play in the future. In our previous research, we found this group of high-flyers not only to be future-focused, but they are also passionate about innovation. So, it comes as no surprise to find that they are extending their pioneering spirit to online exploration. It seems they recognise the full potential of this technology and are those most likely to be searching for its limits. This sets an interesting challenge for firms that want to connect with this valuable client group, because they too need to be prepared to experiment with the possibilities. They may even find that they are not always in the driving seat, as it seems those at the forefront of wealth creation are also often leading the way online. We have certainly found these results surprising and we think you may too, because if you think the world’s wealthy are too busy to click, then it is time to think again. Sebastian Dovey Managing Partner Scorpio Partnership

Shayne Nelson Global Head, High Value Client Coverage & CEO Private Bank Standard Chartered Private Bank

Alfred P. West, Jr. Chairman and Chief Executive Officer, SEI


IN BRIEF In this paper we explore how the world’s wealthy are engaging with new technologies and how they spend their time online. We also assess the role they feel the Web has played in their wealth creation so far and what it takes to be a leader in the digital revolution. Our findings are based on the views of 3,477 individuals from around the world. We refer to them as the Futurewealthy because, as a group, they are on the fast-track to wealth with average worth of around USD1.9 million. Internet insatiables Our experience tracking the footsteps of the world’s wealthy over the past four years has shown us that this group understands the value of innovation. And, when we look at their digital habits, we see that the same passion prevails. The Futurewealthy are up-to-date with the latest technology and are highly active online. We see this in the number of devices they own, the time and money they spend online, the apps they download, and their willingness to participate in all kinds of interesting online activity. Wealth creation and the Web In fact, the Futurewealthy believe that they would not have got to where they are today without a certain amount of internet savvy. Going forward, they also believe the internet will be more important for their success in the future. So, whether it is communication, collaboration, connecting or commerce, perhaps it is not surprising that we find the world’s wealthy have high levels of engagement with all of the internet’s future possibilities.

Leaders of the information age Most exciting of all, we find that it is the richest of the Futurewealthy – those who are worth more than USD4 million – who are at the front of this pack when it comes to all things digital. They are doing more online, more regularly and are the most vocal advocates of the internet as a wealth creation tool. Indeed, it is the very wealthiest of the Futurewealthy who have also marked themselves out as leaders in the digital arena through their passion, confidence, engagement and willingness to collaborate. Through these characteristics, they are showing themselves more likely to become architects of the internet’s future infrastructure.

Futurewealth Report: The Digital World of the Futurewealthy


The function of leadership is to produce more leaders, not more followers

In brief

In 2009, we launched the Futurewealth project to understand the psyche of those leading the

sprint up the global wealth curve. What we found is that this is a group hungry for new opportunities that will aid them in their wealth creation endeavours.

This year, we reached out to 3,477 of the world’s money makers and found that they are embracing innovation in the digital age. Not only do they have more than their share of high-tech toys, they are spending significant amounts of their time and money online.

Among them, it is the wealthiest of the global elite – those with more than USD4 million – who are at the front of the race into cyber-space. We find this group is particularly willing to explore more sophisticated digital functions and are driving collaboration online. Indeed, you could argue that these individuals are already emerging as leaders in the digital revolution.

WHERE MINDS ARE OPEN YOU WILL FIND THE NEW FRONTIERS Not so very long ago many of us grew up believing that space would be not just the final frontier, but the destination of choice for life and leisure in the 21st century. Yet, as the new millennium gets underway, the reality is proving reassuringly different. Mass space travel remains a fixed point on the horizon, and our perspective has shifted to a very different dimension – cyber-space exploration – now that the world is waking up to the potential colonisation of virtual reality. Those lucky enough to be born into this digital age are often referred to as its Digital Natives. They are young, pioneering and unafraid of new technology. But, there is another group of digital denizens; those who are perhaps just a little more worldly wise. We call them the Futurewealthy and we have been tracking their habits since 2009. What marks them out – apart from their financial success – is that this group dares to dream while having their feet planted firmly on the ground. We have found them to be hard-working, powerfully optimistic and with a passionate interest in innovation – qualities not just associated with success, but with leadership itself. So, as the internet age dawns, we ask if those on whom fortune has smiled will most likely emerge as digital leaders or digital followers when they step into the brave new world of the Web?



IN THE INFANCY OF TECHNOLOGY EVERY INVENTOR IS A GOD It is hard to believe that when we first met the Futurewealthy in 2009, mobile apps were in their infancy and the iPad was still a twinkle in Steve Jobs’ eye. Since their arrival on the scene, it is no surprise that the world has fallen in love with these cute little bundles of technological joy. Adoption rates have been fast and frenetic and nowhere more so than among those with higher than average amounts of spare cash. Indeed, when we look at the technology consumption patterns of the Futurewealthy, we find these high-flyers are likely to have a digital device for every occasion [Figure 1]. On average, they have three bits of kit in their digital arsenal, from phones to tablets, laptops to eReaders, which they use to blast through their complex lives. Evidently, the Futurewealthy want to work efficiently and stay connected. But, they also believe that these are the tools with which their fortunes will be forged. And, in preparation, they are getting plenty of practice, spending roughly six hours each day on internet activities split equally between work and play. Professional and personal social media play a big part in enabling them to connect and share with their networks during this time. Not only do social networking apps feature near the top of their on-the-move activities, 71% of the Futurewealthy are already part of the Facebook family and 31% are on LinkedIn. So, if it ever crossed our minds that maybe the rich don’t click, it is time to think again. Always connected and tech savvy, they are confident consumers trusting technology even with high-value purchases. Their typical top spend is around USD5,700. More interesting still, at the front of the pack when it comes to getting the latest gizmos are those with over USD4 million. Passionate about new technologies, they typically have four digital gadgets each. They also spend more time and money online. In fact, their average big ticket spend is a whopping USD15,400. Evidently, the world’s wealthy want to stay up-to-date with the latest digital upgrades. But, it is the richest who are leading the way when it comes to engagement with the online world.

#FW2012/2013 The richest FWs with over USD4mn have 4 devices and spend over 48 hours each week on the Web.



Figure 1: The digital world of the Futurewealthy

… TECH SAVVY Devices used 83% own a Laptop 67% own a Smartphone 46% own a MP3 Player 41% own a Tablet 26% own an eReader 19% own a Blackberry

… ON THE MOVEMost popular mobile apps

57% News

56% Maps/Navigation

55% Social networking

54% Music

53% Weather

50% Games

49% Banking /Finance

39% Shopping/retail

39% Travel

38% Video/movies

… SOCIALLY ACCEPTED Top 5 social media sites

71% Facebook

48% You tube

37% Google+

31% Linkedin

29% Twitter

… ALWAYS CONNECTED

The Futurewealthy spend 2.9 hours of personal time

and a further 3 hours every working day online

… CONFIDENT CONSUMERS

Average largest online purchase is USD5,706 …..and rises to USD15,370 amongst those

with over USD4million

$5,706

The global Futurewealthys average worth

USD1.86 m



LIFE IS EITHER A GREAT ADVENTURE, OR IT IS NOTHING With all this in mind, let us not forget that one lesson from the history of money is that grabbing hold of new technology can be a big factor in success. We should not, therefore, be altogether surprised that the world’s wealthiest are also its most technologically adventurous. Indeed, if we look up the ladder of wealth, we find this is a lesson that has been taken to heart by those on the upper rungs. The richer they are, the more firmly the Futurewealthy believe that evolving digital technologies are a factor in their current and future success. And, they are driving the digital revolution with their confidence that Web-power can be harnessed. More than three-quarters of the wealthiest Futurewealthy say the internet has played a role in their wealth creation. And, this figure rises to 92% when asked about the importance of the Web in the future [Figure 2]. It seems, as wealth rises, the value of the internet is perceived to be greater. And yet, even those of more modest means are starting to follow in the footsteps of the richest. Taking a five-year view, those with less than USD4 million have scaled up their projected usage of the internet by over 20%.

Figure 2: Success so far in the digital world To what extent do you believe your engagement with the internet or digital technology has contributed to your current success and how far will it contribute to your success in five years time? (Worth breakdown)

#FW2012/2013 88% of Asia’s FWs believe the Web will be a big factor in their future success. Compared to just 64% from the Americas.



And when asked which Web-based activities will contribute most to their future wealth creation, the same pattern emerges. It is those at the front of the sprint up the wealth curve who look to the Net and are most enthusiastic about the opportunities they see.

For these digital denizens, the possibilities for making money not only lie in the communication revolution, but almost equally in networking and collaboration opportunities, as well as new ways to approach business and commerce [Figure 3].

Looking around the world, we also find those in Asia are most engaged with the future possibilities. While those in Europe, and particularly in the Americas, are showing much more reserve.

Figure 3: The wealth of internet opportunities Which of the following features of the internet do you think will be most important for your wealth creation?

#FW2012/2013 Asia’s FWs are almost 20% more optimistic than those from the Americas about the commercial opportunities on the Net.



This may, in part, reflect wider economic realities. We have been tracking the wealth confidence of the Futurewealthy for the last four years. This measure focuses on the gap between how much money the world’s wealthy made last year and how much they expect to make in the year ahead. In these lean times, we find that the wealth confidence of the Futurewealthy in Europe and the Americas remains on the retreat, in spite of the modest financial gains made by many of the Futurewealthy in these regions last year [Figure 4]. By contrast, in Asia, confidence is riding high and their anxieties about the future also appear to have steadied in the last year.

Figure 4: Wealth confidence index (by region) To what extent has the wealth confidence of the Futurewealthy changed in the last 12 months relative to actual performance? (Regional responses)



Those bucking the trend most this year are once again the world’s wealthiest. Those with over USD4 million say they hit their wealth goals for last year and are now raising the bar for 2013 [Figure 5]. By contrast, those who are not quite so rich, are strikingly less confident. They are not yet ready to up the stakes for the coming months.

Figure 5: Expected performance (by wealth level) To what extent do the Futurewealthy expect to make money in the next 12 months? (Wealth segmented responses)

#FW2012/2013 68% of those with USD4mn plus saw their wealth rise last year and 79% think they will make even more in 2013.



THE PROBLEM WITH COMPUTERS IS THEY CAN ONLY GIVE YOU ANSWERS And so, the story we are finding is that the rich are getting richer and they are ready to rock online. In addition to their high levels of engagement with new technology, they are enthusiastic, confident and passionate about what the Web can help them to achieve. But, what really hints at the digital leadership potential of the richest of the Futurewealthy is their desire to weave their own pattern into the fabric of the internet. If we look at the internet as a tapestry of human interactions, we find it provides an organic record of the actions and reactions of those who create the fabric and those who simply pull at its threads. And, it is those who engage in high-engagement or collaborative online activities, such as initiating discussion and managing website content, who are building the internet’s collective consciousness. For, it is by creating content and sparking dialogue that these leaders pave the way for others to express their views, find information or share personal media. Once again, we find it is the richest who are exploring the highest echelons of this opportunity. They spend 13% less time reading and researching than those with under USD500,000, splitting this time across a range of high-powered activities [Figure 6].

Figure 6: Online activities What proportion of your personal time do you spend on the following activities? (Worth breakdown)



THE TASK FOR A LEADER IS TO GET PEOPLE FROM WHERE THEY ARE TO WHERE THEY HAVEN’T YET BEEN So, at the end of this first chapter of our internet odyssey what strikes home is that those around the world who are on the fast-track to wealth appear more likely to be interested in leading the way when it comes to engaging with the online world, rather than following in the footsteps of others. They are embracing new technologies and exploring their untapped potential. Which means they may very well be the ones who forge the next great jump in the world’s cyber-space adventure. Or, to put it another way, if you want to get noticed by these digital doyens, you might need to be prepared to follow them – and not the other way around. Indeed, those that provide products and services to the Futurewealthy may need to explore the outer reaches of the cyber environment – even if this means enabling their most prized clients to shape their own kind of engagement. Because, online communication with this group will more than likely be a two-way street and, as often as not, it will be the clients who take the lead. In our next paper, we will pick up this theme and look at how the Futurewealthy are harnessing the power of communication, particularly via the internet. We will consider how this might shape their interactions in the future with those who provide them with service and cater to their needs.



ABOUT THE PARTNERS

Scorpio Partnership Scorpio Partnership is a pioneer in the art of translating the complex needs of wealthy clients into practical, innovative and profitable solutions to target these customers. This award-winning firm has developed client insight from thousands of millionaires and billionaires around the world. With this knowledge, the firm has implemented strategic research, practical consulting and business innovation projects in over 35 countries.

Standard Chartered Private Bank Standard Chartered Private Bank is the private banking division of Standard Chartered Bank. Headquartered in Singapore, the Private Bank employs over 1,200 staff, including 450 relationship managers, globally. It has 22 offices (with two trust offices) across Asia, Africa, Middle East and Europe. The Private Bank leverages the natural strengths of Standard Chartered: A heritage of over 150 years in international banking, a global network across more than 70 countries, and strong local presence in key growth markets. These put the Private Bank in an advantaged position to grow steadily and deepen client relationships across its core markets. For more information, please visit: www.privatebank.standardchartered.com

SEI SEI (NASDAQ:SEIC) is a leading global provider of investment processing, fund processing, and investment management business outsourcing solutions that help corporations, financial institutions, financial advisors, and ultra-high-net-worth families create and manage wealth. As of September 30, 2012, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages or administers $448 billion in mutual fund and pooled or separately managed assets, including $195 billion in assets under management and $253 billion in client assets under administration. For more information, visit www.seic.com.

Morar Consulting Morar Consulting was founded to bring new approaches to brand strategy and brand measurement to help our clients grow the value of their brands. Their work is built on a combination of four key elements: insight, expertise, technology and action. Morar has co-created the BrandLove methodology based on the triangular theory of love developed by American psychologist, Professor Robert Sternberg. The BrandLove framework assesses the three components of love that have been empirically shown to predict the stability of relationships: passion, commitment and intimacy. Important Information All graphical and image material in this report are sourced by and to Scorpio Partnership. Standard Chartered Private Bank is the private banking division of Standard Chartered Bank (“SCB”). Private banking activities may be carried out internationally by different SCB legal entities and affiliates according to local regulatory requirements. Not all products and services are provided by all SCB branches, subsidiaries and affiliates. Some of the SCB entities and affiliates only act as representatives of the Standard Chartered Private Bank, and may not be able to offer products and services, or offer advice to clients. They serve as points of contact only. Standard Chartered Bank is incorporated in England and Wales with limited liability by Royal Charter 1853, Reference number ZC 18. The Principal Office of the Company is situated in England at 1 Aldermanbury Square London EC2V 7SB. Standard Chartered Bank is authorised and regulated by the Financial Services Authority under FSA register number 114276 VAT number: GB 244106593. The SEI Global Wealth Services may be offered internationally by different SEI Investment Company subsidiaries and affiliates according to local regulatory requirements. This material has not been approved by any of the SEI subsidiaries or affiliates as a financial promotion or marketing communication for any prospective investor. The information contained in this document has not been independently verified by SEI or any legal entity of the SEI Group of Companies. This document is not intended in any circumstances as an offer or solicitation to subscribe for or acquire any securities or sale of any securities in any jurisdiction.

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The digital world of the Futurewealthy · 2012-11-29 · Figure 1: The digital world of the Futurewealthy … TECH SAVVY Devices used 83% own a Laptop own a Smartphone 46% own a MP3