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Wealth in France: HNW Investors 2019

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Table of Contents

    1. EXECUTIVE SUMMARY

    • 1.1. A segmented strategy offers opportunities for AUM growth in France’s congested wealth market
    • 1.2. Key findings
    • 1.3. Critical success factors

    2. OVERVIEW

    • 2.1. A crowded wealth market in France calls for a multi-segmented targeting strategy
    • 2.2. Demographics: Professionals in the financial services industry represent a sizable target market
    • 2.3. Expats: Offering retirement services will be key for HNW expats in France
    • 2.4. Investment style preferences: Discretionary services are a must, but advisory and execution-only mandates should not be overlooked
    • 2.5. Asset allocations: Demand for alternatives will increase the most
    • 2.6. Offshore preferences: General geographic diversification is driving wealth abroad
    • 2.7. HNW product and service demand: Wealth managers should ensure they include tax services

    3. WEALTH MANAGERS WILL FIND FEMALE HNW INVESTORS AN ATTRACTIVE TARGET SEGMENT

    • 3.1. On a regional level, France has one of the highest proportions of females who have sourced their wealth through earned income
      • 3.1.1. Targeting females means adopting a tailored servicing approach
    • 3.2. A significant proportion of female investors who sourced their wealth through earned income are employed in financial services
      • 3.2.1. Female HNW investors employed in the financial services industry are likely to bank with their employer, but a strategy tailored around females’ distinct needs could change this
      • 3.2.2. A female advisor base will aid in growing AUM for wealth managers

    4. FRANCE’S SIGNIFICANT HNW EXPAT RETIREE POPULATION CALLS FOR A DEDICATED SERVICE PROPOSITION

    • 4.1. France’s significant HNW expat retiree population calls for a dedicated targeting approach
      • 4.1.1. Retirement is the single most important expatriation driver in France
      • 4.1.2. Wealth managers must cater to the needs of France’s HNW expat retiree population
    • 4.2. The 34.8%% of French HNW expats who migrated as part of a job transfer are less likely to reside in their country of choice permanently
      • 4.2.1. Providers targeting investors who migrated as part of a job transfer need offshore capabilities
      • 4.2.2. On the flip side, wealth managers in an expat’s country of origin may see the relationship terminated when a client expatriates to France

    5. A WIDE RANGE OF INVESTMENTS AND INVESTMENT STYLES WILL MITIGATE INVESTORS’ PROPENSITY TO SPREAD WEALTH ACROSS MULTIPLE PROVIDERS

    • 5.1. A multi-service proposition is key to address HNW investors’ promiscuity
      • 5.1.1. Discretionary services attract the largest proportion of French HNW wealth, but demand for other mandates is set to increase the most
      • 5.1.2. To avoid losing cost-conscious clients to competitors, wealth managers should offer low-cost self-directed channels
    • 5.2. Access to a wide range of investment products and relationship management will allow providers to capture a greater share of wallet
      • 5.2.1. Gaining access to a wide range of investments is the key driver for professional financial management
      • 5.2.2. However, wealth managers need to focus on relationships for clients to remain loyal

    6. THE PORTFOLIO MIX REMAINS UNCHANGED, BUT GROWING EXPERTISE IS PROMPTING INVESTORS TO TEST RISKIER INVESTMENTS

    • 6.1. Providing a wide range of alternatives is critical in France
      • 6.1.1. Equities dominate the typical HNW portfolio, but HNW demand for alternatives is forecast to experience the most pronounced increase
      • 6.1.2. Alternatives are regarded as a prime diversifier
      • 6.1.3. Providing access to alternatives will allow wealth managers to set themselves apart from the crowd, but a bit of handholding is essential

    7. HNW INDIVIDUALS LIMIT DIVERSIFICATION BENEFITS AS THEY OFFSHORE WEALTH TO NEIGHBORING COUNTRIES

    • 7.1. The majority of holdings are in equities due to their diversification benefits
      • 7.1.1. General geographic diversification and tax benefits are the leading drivers to invest overseas
    • 7.2. Providing sound tax advice is a must, given the importance of tax efficiencies as an offshore driver
      • 7.2.1. Being able to provide sound tax advice is becoming more important than ever

    8. INHERITANCE PLANNING PRESENTS OPPORTUNITIES TO GROW AUM

    • 8.1. Despite strong demand, only 57% of wealth managers offer inheritance planning directly
    • 8.2. Intergenerational wealth transfer will encourage demand for inheritance planning

    9. APPENDIX

    • 9.1. Abbreviations and acronyms
    • 9.2. Supplementary data
    • 9.3. Definitions
      • 9.3.1. Affluent
      • 9.3.2. HNW
      • 9.3.3. Liquid assets
    • 9.4. Methodology
      • 9.4.1. Demographics data from GlobalData’s WealthInsight
      • 9.4.2. GlobalData’s 2018 Global Wealth Managers Survey
      • 9.4.3. Level of agreement calculation
      • 9.4.4. Service level of demand score
      • 9.4.5. Forecast level of demand calculation
    • 9.5. Secondary sources

    Wealth in France: HNW Investors 2019

    Summary

    "Wealth in France: HNW Investors 2019", report analyzes the investing preferences and portfolio allocation of French HNW individuals.

    The female HNW population in France is larger than in the majority of its European peers, presenting an opportunity to grow revenues by targeting this demographic. Other opportunities include expat retirees and the increasing demand for inheritance planning. French HNW investors make use of several wealth managers, creating a challenge for advisors that want to grow assets under management by managing all of a client’s assets. To mitigate investors’ propensity to spread their wealth, offering a wide range of services is a must, as this will reduce the need to work with different providers depending on an investor’s servicing need.

    Specifically the report -
    - Profiles the average HNW investor in France in terms of their demographics.
    - Looks at which wealth management mandates are preferred among French HNW investors and how demand will develop going forward.
    - Examines the allocation of French HNW investors’ portfolios into different asset classes and how this is expected to develop in the future.
    - Analyzes HNW investors’ propensity to invest offshore, their preferred booking centers and asset classes, and France’s standing as an offshore center.
    - Explores product and service demand among French HNW investors.
    The report is based on our proprietary Global Wealth Managers Survey.

    Scope

    - The female HNW demographic makes up over 10% of the total HNW population, so dedicated services for this segment will be profitable.
    - French HNW individuals use an average of 4.6 wealth managers and utilize multiple services for portfolio management.
    - Constituting 13% of the HNW portfolio, demand for alternatives is forecast to increase the fastest of any asset class.
    - French HNW individuals only hold 11% of their wealth offshore, and mainly in neighboring countries.
    - 77% of industry participants forecast demand for inheritance planning to increase, yet only 64% of wealth managers in France offer this type of service.

    Reasons to buy

    - Develop and enhance your client targeting strategies using our data on HNW profiles and sources of wealth.
    - Give your marketing strategies the edge required and capture new clients using insights from our data on HNW investors’ preferences for the various styles of asset management.
    - Tailor your investment product portfolio to match current and future demand for different asset classes among HNW individuals.
    - Develop your service proposition to match the demand expressed by French HNW investors and react proactively to forecasted changes in demand.
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