Midtier millionaires are looking for new ways to manage their money, according to a recently released Capgemini/Merrill Lynch 2005 World Wealth Report. These high-net-worth individuals (HNWI) have between $5 million and $30 million in investable assets, and though their wealth management needs are often complex, unlike their ultra-high-net-worth counterparts, midtier millionaires lack the funds to support their own family offices. The report reveals that the most efficient way for financial institutions to tap this underserved market is through the adoption of virtual service networks (VSNs).
A VSN essentially combines the benefits of an online advisory environment with standardized processes in order to allow multiple service providers to connect and collaborate on their client's interests. The report also recommends investing in key technologies, such as account data aggregation, secure online collaboration and workflow-based wealth management. "A VSN-like model can allow for financial firms to cost-effectively offer family-office-type services to the midtier millionaire [market], said Donie Lochan, vice president of Capgemini's wealth management practice, in a statement.