China Wealth Management: HNW Investors 2019

Table of Contents

1. EXECUTIVE SUMMARY

• 1.1. A comprehensive service proposition is critical to success in China
• 1.2. Key findings
• 1.3. Critical success factors

2. SIZING AND FORECASTING THE CHINESE WEALTH MARKET

• 2.1. Affluent individuals in China account for 3.8% of the total adult population
  • 2.1.1. Of China’s affluent individuals, 3.5% can be considered HNW
• 2.2. Affluent individuals hold 86.7% of liquid assets in China
  • 2.2.1. Chinese HNW individuals held $5,456.21bn in liquid assets in 2018

3. DEMOGRAPHICS

• 3.1. Policy changes to retirement age present unique opportunities
  • 3.1.1. While still small in number, female HNW investors represent a lucrative target segment
  • 3.1.2. Entrepreneurial income is a small but growing source of HNW wealth
  • 3.1.3. Services are a growing source of wealth for HNW individuals

4. HNW EXPATS

• 4.1. The HNW expat market presents opportunities for wealth managers
  • 4.1.1. The US is a large and growing source of HNW expats
  • 4.1.2. On the flipside, Chinese HNW investors seeking opportunities abroad are an equally attractive target segment
  • 4.1.3. Business startup drives expatriation

5. HNW INVESTMENT STYLE PREFERENCES

• 5.1. Limited average number of wealth managers per HNW client
  • 5.1.1. Chinese HNW investors work with an average of 2.5 professional wealth managers
  • 5.1.2. HNW individuals expect above-average returns from wealth managers
• 5.2. Discretionary mandates dominate, but offering a wide range of investment mandates is critical
  • 5.2.1. HNW individuals prefer discretionary mandates
  • 5.2.2. HNW individuals have the highest demand for discretionary management styles
  • 5.2.3. HNW individuals’ demand for all asset management styles increases, but discretionary mandates will maintain pole position
  • 5.2.4. Digital services drive HNW demand for self-directed asset management

6. HNW ASSET ALLOCATION

• 6.1. Property is still an integral part of the typical Chinese HNW portfolio
  • 6.1.1. Half of onshore HNW wealth is held via equity and property investments
  • 6.1.2. HNW individuals prefer to invest directly in equities and property
• 6.2. HNW individuals in China expect to increase demand for most asset classes
  • 6.2.1. Demand for all but property is expected to rise
  • 6.2.2. HNW individuals demand capital growth and risk reduction, calling for a diversified investment approach

7. HNW OFFSHORE INVESTMENT PREFERENCES

• 7.1. The proportion of total managed funds in offshore holdings is low
  • 7.1.1. 27.3% of Chinese HNW wealth is booked abroad
  • 7.1.2. Offshore holdings present a better range of investments
• 7.2. Offshore property and equity investments are of great appeal to Chinese HNW investors, while the US is the preferred booking center
  • 7.2.1. Almost half of HNW wealth is booked in the US
  • 7.2.2. Equities dominate HNW individuals’ offshore portfolios

8. HNW PRODUCT DEMAND AND PROVISION

• 8.1. Wealth managers’ service offerings are meeting HNW demand
  • 8.1.1. HNW investors show moderate-to-strong demand for all planning services
  • 8.1.2. HNW products and services are expected to grow

9. APPENDIX

• 9.1. Abbreviations and acronyms
• 9.2. Methodology
  • 9.2.1. GlobalData’s 2019 Global Wealth Managers Survey
  • 9.2.2. Level of agreement calculation
  • 9.2.3. Service level of demand score
  • 9.2.4. Forecast level of demand calculation
• 9.3. Secondary sources