Cisco Wealth Management Study Reveals $31 Billion Revenue

Cisco Wealth Management Study Reveals $31 Billion Revenue Opportunity
With Younger, Tech-Savvy Investors 
Wealth Management Survey Reveals Financial Firms Can Avoid
Significant Wealth Attrition by Courting Younger Investors With
Preferred Technology and Services 
SAN JOSE, CA -- (Marketwire) -- 12/06/12 --   As financial services
companies look to increase revenues by winning over more investors,
Cisco (NASDAQ: CSC0) today announced findings from a study that
highlights wealthy investors' attitudes on how they engage with their
financial advisers. The second annual Cisco Internet Business
Solutions Group (IBSG) Wealth Management Study also reveals a $31
billion revenue opportunity with wealthy investors aged 55 or
younger. The study suggests that financial firms can dramatically
enhance their revenues and retain wealth in their portfolio by
offering more personalized financial services, more frequent
interactions via high-quality video conversations and more
collaborative technologies that are attractive to these younger
Wealthy investors aged 55 and younger already represent approximately
40 percent of global investable assets, and this share will increase
as they age and as they inherit assets from older generations during
the next 10 years. The survey shows a significant generational gap:
20 percent of these younger investors plan to change their primary
adviser during the next year, whereas only 5 percent of older
investors are planning to change. To win over these younger, more
tech-savvy investors, the study suggests that financial firms need to
offer more frequent interaction with advisers and a higher-quality
customer experience. Financial firms can meet this requirement and
build trust and loyalty with these investors by engaging with clients
through videoconferencing and social media. In fact, 57 percent of
these wealthy investors under age 55 would consider moving a portion
of their assets to firms that offer a video as a way to connect with
their advisers and other experts.  
Highlights and Key Facts:
 For the Wealth Management Study, Cisco
IBSG interviewed more than 1,200 wealthy investors in the United
States, United Kingdom and Germany with at least $500,000 in
investable assets. It revealed their attitudes about investing; their
relationships with financial advisers; and how they prefer to
interact with advisers and wealth management firms. Below are
highlights from the research. 
Market Landscape for Winning Over Wealthy Investors 

--  Increase Interactions with Next-Generation Family Members. According
    to industry figures, as much as 98 percent of client assets leave the
    adviser when the second spouse passes away. To better retain existing
    clients and retain wealth in their portfolio, financial advisers can
    increase their interactions with the families of their clients,
    especially the next generation, by using video and collaboration
--  Recognize Revenue Opportunity. Based on the survey results, Cisco IBSG
    estimates that for a firm with $200 billion in assets under management
    and approximately $1.8 billion in revenue, the overall opportunity
    could be as much as $341 million.
--  Step into the Greenfield Market. More than 27 percent of wealthy U.S.
    investors don't have a financial adviser at all. However, more than
    two-thirds of these report that they would consider hiring one under
    the right circumstances.
--  Consolidate Investors and Their Investments. Wealthy investors' assets
    are fragmented across multiple firms. In the United States, 77 percent
    have assets across more than one firm and 36 percent have investments
    with four or more firms. In Germany, investors are also using close to
    three firms, whereas in the United Kingdom investors spread their
    wealth by using an average of more than four firms to hold their

Financial Firms Challenged to Build Trusting Relationship with Clients 

--  Low Investor Confidence in Advice. Respondents expressed low
    confidence in the market and financial advisers. Thirty-five percent
    of wealthy U.S. investors said they believe financial markets don't
    provide a level playing field. The numbers are even higher for Germany
    and the United Kingdom, at 39 percent and 40 percent, respectively.
--  Lack of Trust. Only 29 percent of the under-55 group in the United
    States and 26 percent in the United Kingdom trust the investment
    advice they receive from financial advisers more than that of their
    fellow investors.
--  Maintaining Long-Distance Relationships. More than 20 percent of
    wealthy investors in the U.S. and U.K. live more than 50 miles from
    their financial adviser, and as a result, they rarely meet
    face-to-face with their adviser.

Technology, Especially Social Media and Video, Offer Gateway for
Courting Wealthy Investors 
 Investors under age 55 desire increased
frequency of interaction and a higher-quality customer experience
using collaboration and video technology, which can help build trust
with financial advisers. 

--  Number of Technology-Savvy Investors Growing. Seventy-one percent use
    a PC to check or manage their investments at least once per month (36
    percent do so daily), while 28 percent use smartphones and 24 percent
    use tablets. Forty-nine percent of wealthy investors consider
    themselves to be "early adopters" of technology or in the "early
    majority" of those who use new devices and services.
--  Demand for Video. About 50 percent of all wealthy investors have used
    some type of video to meet with friends, family, or colleagues in the
    past year. And 61 percent of under-55 investors want the option of
    having video meetings with advisers (in addition to in-person
--  High Use of Social, Mobile and Webinars for Research. A large portion
    of investors under 55 have strong interest in services that
    incorporate visual, virtual, social, mobile, blog and webinar
    activities and 57 percent, 54 percent and 51 percent of investors in
    U.S., Germany, and the U.K., respectively, are willing to move assets
    to firms that provide technology-based services.

For more information about the Cisco IBSG wealth management survey,
please visit Cisco and its
partners offer services and solutions for financial analysts and
wealth managers, including the Cisco(R) Remote Expert Smart Solution.
This high-definition video solution helps financial firms offer
virtual face-to-face meetings between customers and wealth management
advisers to maximize the efficiency and productivity of wealth
management advisers and provide more frequent and personalized
customer service that are desired by younger investors.  
Supporting Quotes 

--  Joergen Ericsson, vice president and global lead, Financial
    Services Practice, Cisco Internet Business Solutions Group:
    rapid adoption of technology is quickly changing the game for
    interactions between wealthy investors and their financial advisers.
    With the right technology-enabled approach, financial advisers can
    create a significantly improved customer experience resulting in more
    frequent and higher quality interactions that will boost customer
    loyalty and that will even attract wealthy investors who currently do
    not have an adviser."
--  Jim Schuman, Group General Manager, ANZ Bank
     "The client perceptions
    and preferences identified in the Cisco IBSG study are factors that we
    already see influencing the development of innovative business models
    in financial services. It isn't just the young that are developing an
    attachment to, and expectation of, technology. Like their results
    indicate, we also see that innovation -- when it enhances people's
    actions effectively -- can be a key factor in serving older clients as

Supporting Resources 

--  Research Study: Reinventing Wealth Management with Technology-Enabled
    Video Services
--  Slidecast: Overview of Wealth Management Study
--  Websites:
    --  Cisco Remote Expert Smart Solution
    --  Cisco Financial Services Industry Solutions
    --  Cisco IBSG Financial Services Practice
--  Social Media: Follow Cisco IBSG on Facebook, Twitter and Flickr

Technorati Tags: Cisco, Internet Business Solutions Group, IBSG, Wealth
Management, Video, Video Conferencing, New Business Models, Financial
Services, Research, Study, Wealthy Investors 
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