Now more than 10 years' old, Wealthmonitor aims to keep setting the pace for providing usable, detailed data on liquidity events for the wealth management sector. This publication recently interviewed one of its senior figures.

The wealth management sector knows that unless it develops good intelligence about where clients come from that it will be unable to stay ahead of competition and build a book of customers over the long run. There are many ways that firms might seek to find clients and it is important to have access to data that can shed light on the economic sectors that are spawning new millionaires, whether there are trends in their age, gender, and geographic location. To collect such information and then present it in a digestible, actionable form is not easy. However, there is something of an industry today of firms trying to collect such statistics and put them to work. A prominent example of such an operation is Wealthmonitor, founded 10 years ago and now an established source of authoritative data on wealth trends. It was launched by the Mergermarket media group; at one point it was held by the Financial Times, the UK newspaper, but is now an independent entity.

"Anyone wanting to deal with HNW individuals nowadays wants to ensure they have the most sophisticated approach that reflects their service, products and brand. It is no longer good enough to call the HNW individual following a liquidity event," Florian Pixner, managing director for Europe, Middle East and Africa, told this publication recently.

"Our subscribers ensure that they have reliable and accurate intelligence before the general market players do and make sure they have done their research on what would be the most successful route to prospect, be it through the intermediary network having advised on the deal or any other common ground be it network, interest and needs of the prospect or shared expertise such as industry background," Pixner continued.

The term "liquidity event" can typically mean the wealth generated out of an initial public offering, the sale of a business, or the exercise of share options granted to employees and other persons. (There are more specific events typically not tracked in business dealings, such as payouts for personal injury victims or winners of lottery prizes.)

Over recent years there have been a number of reports and surveys tracking wealth trends, such as the annual Capgemini World Wealth Report, to give just one example. There are various "rich lists" of varying quality and renown, such as the UK's Sunday Times Rich List, the various lists of Forbes, the US publication, and Hurun in China, for example. Specific figures on IPOs, business sales and other liquidity events weren't particularly easy to find until Mergermarket, and then Wealthmonitor, came along.

Its staff aim to identify ahead of anyone else who might be selling companies and who are the owners expected to have an increase in wealth, Pixner said.

Subscribers include private banks, wealth managers, the luxury industry, non-for-profits seeking such information, and indeed anyone who counts high net worth and ultra-high net worth persons as clients.

This news service has already felt the benefit of collaborating on reporting projects with Wealthmonitor, publishing exclusive stories on trends in European and US liquidity events, for example.

In total, this data gathering outfit taps a pool of 600 journalists and analysts across the Mergermarket group, and it has a team of 40 research analysts looking into the shareholder structure of the companies involved in liquidity events in order to profile high net worth and ultra-high net worth individuals that benefit from these processes.
 

A good sales pitch
Wealth managers are having to become more sophisticated about the amount of data they have at their fingertips before going to make a pitch to a prospective client, or maybe for that second or third meeting where they want to bring more information to the table. (Consider this recent interview by this publication with RBC Wealth Management for a discussion about the value of having such information.) Having high-quality data can make all the difference in persuading a client that a wealth manager is on top of his or her brief. There are firms such as US-headquartered [tagBizEquity]BizEquity, for example, that are giving managers more details about the value of unlisted/unquoted companies - a major area given that so much business is not held in publicly-listed entities.

Pixner said his firm's research reach is global in scope but there is a clear focus on "old Europe".

"Our biggest client base is in the UK and Germany followed by France, Scandinavia, Spain, Italy and Switzerland. We generally expand to where our subscribers intelligence demand is be it geographically or in content," he said.

Pixner said his firm makes full use of modern technology to find, and deliver, the liquidity event data clients need, but he added this point: "When it comes to the actual intelligence and information gathering we do however rely on good old fashioned brain power. Our clients expect intelligence that makes sense and is reliable and we find that having at a minimum two analysts going through every shareholder dossier with a fine comb makes us stand out by delivering the pure essence on what’s relevant to our subscribers rather than masses of data to sift through or relying on assumptive models that often lead to ludicrous  assumptions."

Talk of foolish assumptions leads to the question of whether the wealth management business is making the best use of data. "On the whole though I believe the industry can still improve a lot by increasing their research on the prospect prior approach and building the relationship ahead of the liquidity event. HNW individuals need advice on their wealth increase  due to a liquidity event as they often have disposable cash for the first time and do not come from a financial background. People however also want to build trust to the advisor first; this takes time so queuing up after the story hits the public news is too little too late," he said.

In the light of all this data information, it might appear that Wealthmonitor needs to be more voluble about its achievements. Pixner remarked that his firm is a "well-kept secret" in wealth management, although there are signs that is changing.

"Private bankers and other subscribers make substantial revenue through Wealthmonitor so they are in no rush to share the ingredients of their sucess. In some ways Wealthmonitor will always be a niche product in our group as we are a premium intelligence service for a selected subscriber base.  We find that subscribers moving organisations take us with them to the new organisation which generates substantial growth for Wealthmonitor year after year," he said.