Client diversity among UK high-net-worth individuals presents a tremendous opportunity for wealth managers to innovate and enhance their approach.
In a market where the number of UK families with a net worth of over £25mn has grown significantly between 2017 and 2022 - and is expected to grow by a further 25 per cent by 2027, according to Statistica - the practice of client categorisation has emerged as a common approach amongst large wealth managers to enable them to streamline their services while maintaining the appearance of tailored solutions.
And whether it’s categorisation by wealth bracket, role, tax status, or even by gender, families are increasingly being bucketed into groups, enabling firms to manage increasing demand more effectively.
Throughout our twenty years at global bank wealth managers - and more recently since launching Six Degrees last year - we have observed that while categorisation can help create scalable solutions, it’s equally important to focus on the individuality of each client.
Our approach at Six Degrees recognises the diverse ecosystem around each client - usually but not always a family unit - representing a varied collection of different views, life experiences, genders, brains and ultimately, differing relationships with wealth.
Recognising the complexity and richness of clients’ ecosystems and their diverse backgrounds, can allow wealth managers to engage in vibrant and purpose-led conversations.
And this diversity can take many forms.
Diversity among clients
Firstly, the majority of wealth creators in the UK today do not themselves come from wealth.
According to an HSBC study last year, 59 per cent are first generation wealth creators with no family business background.
This demographic falls firmly into the Six Degrees niche: all of our clients and target market are self-made, and value hard work incredibly highly.
Secondly, new wealth is geographically diverse and rarely London-based. In our experience wealth creators are as likely to be a Birmingham-based CEO of a tech business as they are a Hampshire-based founder of a media company.
The data backs this up; according to a report by the British Venture Capital Association, 58 per cent of PE and VC investments in the UK in 2023 were made into businesses based outside of London.
Thirdly, wealth creators - and this is as true historically as it is today - are people who have thought differently and gone against the grain.
We are coming to understand how neurodiversity plays an important role here - and although some of the most well-known billionaire entrepreneurs of our age have publicly discussed their own neurodiversity, we’re starting to see data emerge suggesting that there’s a stronger link between neurodivergence and the entrepreneurial mindset.
According to a report by Cypher Learning, 55 per cent of business owners self-identify as neurodiverse, as do 45 per cent of C-level executives, and 32 per cent of senior management.
And this is why we feel that leading with purpose is crucial.
