14 connected strategy for asian wealth management ^Top While there is no single, ‘correct’ answer to which measure fully captures ‘willing- ness-to-pay’, in our analysis, we use average annual revenue per user as it is a function both of the wealth assets that a client chooses to hold with a given firm and the fees on those assets the client pays. The table below provides a more comprehensive outline of the drivers that affect a client’s willingness-to-pay. DRIVERS VARIABLE Utility Tangible Performance • Absolute investment performance • Likelihood to solve financial goals and needs Fit • Breadth of functionalities • Choice of options • Level of personalization (behavioral, value) Intangible Performance • Relative to peers (social) Fit • Relative to personality (emotional) Accessibility Location • Mono-channel to omni-channel Timing • From booked in advance to on- demand Costs Perceived cost-per usage • Level and type (transaction fee or asset-based fees) Maintenance • Level of ongoing custody fees Fulfilment cost: The total cost to deliver the firm’s target client experience is the fulfil- ment cost, which is made up of the cost of acquisition, the cost of engagement and advice (advisors, investment office, product management), the cost of execution (transaction platforms, operations) and functional costs (e.g., technology, compliance, support func- tions). We use the total cost income ratio as a proxy for fulfilment cost for our purpose since it includes all key cost components and is normalized per dollar of revenue. Efficiency Frontier: An efficiency frontier is the plot of a client’s willingness-to-pay against a firm’s fulfillment cost. Figure 5, the efficiency frontier for wealth management, depicts that the industry today faces a typical trade-off between quality of the client experience and the cost to provide the experience. Superior, personalized experiences in today’s analog wealth world come at a commensurately higher cost. Wealth managers who break this trade-off will gain market share and scale.