Wealth in France: HNW Investors 2019

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