Wealth managers are about to get more competition in the battle over market share with the lucrative super-rich, according to a sector study.

The pandemic shaved six to eight percent off global wealth through the end of April, after knocking out $18 trillion in overall market value in February and March before a partial recovery, according to an annual study released on Thursday by Capgemini.

When the wealth pot shrinks, the competition will hot up: 74 percent of the super-rich are willing to consider deposits at big technology firms like Google, Apple, Amazon, or Facebook. Nearly one-quarter – 22 percent – intend to do so in the next 12 months, according to the study, which surveyed more than 2,500 of the wealthy in 21 countries in January and February. 

Inquisitive Heirs

The most tech-welcoming clients are Asian and Latin American wealthy; globally, the «inheritance» generation of under-40-year-olds are curious about how Amazon et al can offer banking services. Capgemini estimates that just 26 of wealth management firms consider tech firms to be disruptive to their business.

«Easy access» and «touchpoints» are emerging as the wealth management industry's new buzzwords as a result (click here to view private banking's most tired clichés). Clients want to get at banking services in a variety of channels and routes and are hungry for additional services – an area where big tech firms have leaped ahead.

Pennying Down Fees

The changes are poised to accentuate a pricing war: more than one in five high net worth individuals surveyed said they were planning to leave their wealth manager this year, primarily over what they perceive to be too high fees.

This paves the way for low-cost, technology-enabled solutions that big tech firms or financial technology start-ups are better equipped to offer.

Asia Wasn't the Fastest-Growing Market

While digitization continues to grow in importance, other drivers behind the business with the rich appear to be fading: Asia wasn't the fastest-growing market for the first time in years (eight percent growth). Instead, the U.S. wealth market grew by 11 percent, and Europe advanced nine percent.  

As the consulting firm put it, the pandemic «has tossed wealth management firms into uncharted waters.»