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HNWI Asset Allocation 2020

  • October 2016
  • 66 pages
  • GlobalData
Report ID: 4530210

Summary

Table of Contents

HNWI Asset Allocation 2020

Summary
In an uncertain economic and political environment banks are no longer prioritizing rapid expansion strategies to achieve growth. Banks are divesting and exiting non-core markets, with some targeting emerging markets with increasing HNWI populations. The main objective for providers is to focus on domestic markets, remain profitable and achieve sustainable steady growth in their core markets.

On the same time tightening regulations and a weak macroeconomic environment have impacted the profitability of wealth management firms, encouraging them to re-examine their strategies. To maximize returns, wealth management firms are now focused on reviving their firms’ brand values, and product and service offerings.

Both Banks and Wealth Management firms are approaching HNWIs with a wide variety of products and services to capture a greater share of the market. In the post-financial crisis environment they have also been observed to be building lending solutions to cater to the strong HNWI demand for credit and access to liquidity.

Furthermore, fearing the disruption that alternative digital platforms can bring, the automated advice space has been entered by traditional financial service providers. By including a digital advice option, providers can appeal to a broader range of clients and meet investors’ needs through their lifetimes.

With wealthy clients, and especially UHNWIs, behaving like institutional clients, banks are using cross-selling opportunities between investment and private banking, and it has become common for private banking divisions to be positioned with investment banking and asset management. As regulatory requirements pose ever greater challenges, private bankers and wealth managers are likely to experience further changes to their business models, products and services.

The key findings that emerged from GlobalData’s study on HNWI Asset Allocations; are presented below:
- The global HNWI population was estimated at nearly 15 million in 2015, with a total wealth of US$60 trillion.
- HNWI wealth is projected to grow by CAGR6.7% over 2016–2020 to reach US$82.1 trillion by 2020.
- In the post-financial-crisis environment, private banks and wealth managers are building lending solutions to meet strong HNWI demand for credit and access to liquidity.
- Wealth managers are focused on providing higher customization by targeting specific client segments such as females, entrepreneurs and young HNWIs.
- Increased focus is being observed on relationship-based pricing to encourage brand loyalty.
- Wealth management firms are utilizing synergies by leveraging cross-selling opportunities between retail, private and investment banking.

Companies Mentioned: Bank of America, HSBC, Lloyds, UBP, Coutts, Credit Agricole, Indosuez Wealth Management, deVere, Ellevest, Deutsche Bank, BNP Paribas, Societe Generale, Lombard International Assurance, Julius Baer, RBC, BlackRock, FutureAdvisor, RBS, JP Morgan Chase, OCBC, DBS, ABN AMRO, Leumi Private Bank, Fransad Gestion, Merrill Lynch, Kairos, Goldman Sachs, GPS Investimentos, Financeiros e Participacoes, BTG Pactual, BSI, Generali, UBS, Bethmann Bank, LGT Bank Deutschland, Vontobel, Finter Bank Zurich, Credit Suisse, Citi Private Bank, Macquarie Group, The Henley Group, St. James’s Place, Barclays, US Trust, Northern Trust, Well Fargo, Altamount Capital Management, Itau Private Bank, Acumen Partners, Banque Neuflize OBC, Babyloan, Yes Bank, Berenberg Bank, Monument Wealth Management, Oracle Capital Group, Morgan Stanley Smith Barnet, Bessemer Trust, BNY Mellon, Kotak Mahindra Private Banking, WaterStreet Family Offices, ICICI, MoneyZen, Female Wealth Management and Wealthcare for Women, HoyleCohen, the Zinn-Ray and Svatora group, Metro Bank, SunTrust, ING Group, OECD, Bank of Montreal, Zafin Asset Management, Fidelity investments, The Mulligan Group, Baoshang Bank, NatWest

Key Findings
The report is divided into three chapters, which cover the following areas:
- HNWI Wealth and Population
- HNWI Asset Allocation
- Competitor Strategy, Products and Services

Synopsis
- This report looks at a detailed breakdown from GlobalData’s proprietary country report model of HNWI population and wealth.
- It provides an analysis of HNWI demographics based on a unique analysis of HNWI dossier database. It analyses trends in HNWIs investment by asset class and looks at a breakdown of foreign and alternative investments.
- It provides an in-depth analysis of competitor product strategy, mergers and acquisitions, and innovation and identifies current and future opportunities available to providers in selected core markets.
- The report provides five-year historical (2011-2015) and five-year forecast data (2016-2020) in core markets in the Americas, Europe, Asia-Pacific and the Middle East and Africa.
- Countries covered in the report include the US, Canada, Brazil, Mexico, Chile, Argentina, Germany, France, Switzerland, Italy, Turkey, Russia, the UK, Spain, Japan, China, Hong Kong, Singapore, Australia, India, South Africa, Nigeria, Saudi Arabia, the UAE and Israel.

Reasons To Buy
- Understand the investment behavior of HNWIs with respect to onshore and offshore locations and current economic conditions.
- Gain insight into HNWI demographics based on a unique analysis of GlobalData’s proprietary HNWI database comprising 140,000 dossiers.
- Be informed about HNWIs’ preferred asset class allocations in the Americas, Europe, Asia-Pacific and Middle East and Africa as well as their foreign and alternative investment allocations.
- Analyze competitor strategy with regard to products and services, international expansion, pricing and innovation.
- Identify new approaches to take when targeting HNWI clients and identify where the competitive advantage offers opportunities to increase market share.

Key Highlights
- In 2015, HNWI wealth was estimated at US$60 trillion, of this 25.9% were invested in international markets.
- HNWIs in Asia-Pacific held 21.5% of their wealth outside of their home country in 2011, which increased to 22.5% in 2015.
- In the Americas alternative assets registered a CAGR of 4.9% during 2011-2015, they are expected to grow by CAGR8.8% between 2016 and 2020.
- Globally, 12.5% of HNWIs were over the age of 70 in 2015. HNWIs below the age of 40 formed the smallest HNWI group.

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