Table of Contents
OVERVIEW
- Catalyst
- Summary
- Methodology
EXECUTIVE SUMMARY
- The change in French wealth management landscape has been more one of
sentiment than structure
- Poor equity performance, a falling real estate market and lower bond
yields mean that growth in France' s wealthy population has suffered badly
- The French HNW individuals are knowledgeable, risk averse and less loyal
than ever before
- Wealth managers in France believe service quality is good, but need to do
more to keep clients in poor market conditions
SPECIAL FEATURE: IMPACT OF THE CRISIS ON THE FRENCH WEALTH MANAGEMENT LANDSCAPE
- The change in wealth management landscape will be less extreme than in
other European countries; big players will continue to dominate the market
- French banks have been less affected by the economic downturn, but HNW
sentiment has worsened
- There will be opportunities for large wealth managers, but HNWs are
frustrated with some aspects of their service
- French wealth managers do not know what to make of nationalized banks
- Opinion is divided over which type of wealth manager will fare best over
the next few years
- Data Tables
FRANCE' S WEALTH
- Unattractive market conditions in most asset classes mean France' s wealthy
population must take on more risk if they want a return
- Base interest rate cuts, lower bond yields and increasing per capita
debt are decreasing France' s wealth
- French investors, like those across the developed world, suffered badly
from poor returns in equity investments
- Bond yields have fallen drastically and are no longer attractive
- France' s property investment sector is suffering
- French investors continue the shift into deposits
- The Wealth Data in 2009
THE FRENCH HNW INVESTOR
- French clients remain knowledgeable and risk averse, but market conditions
have made them far less loyal
- French HNWs have a good knowledge of financial products and shy away
from risk
- Wealth management service implication: focus on being seen as a firm
whose primary investment aim is the low risk preservation of wealth
- Innovative Solution: Take heed of the market positioning of shariah law
compliant funds
- Personal relationships remain all-important, but the wealth management
landscape has changed
- Wealth Management service implication: understand and cater to the needs
of the individual so that the added value is obvious
- Innovative Example: Leverage platforms that will increase the knowledge
about individual clients
- French HNW portfolio allocations will change drastically over the next two
years
- French HNWs are still heavily invested in property but have left fixed
income products
- Wealth management service implication: be proactive in advising clients
over how to allocate their portfolio, and understand clients' desires
- Innovative example: Pyxis mobile is providing a complete mobile
communications interface to allow wealth managers to contact their clients
while on the move
- Over the next two years, the increase in deposits will continue, and
there will be a large outflow from property
- Wealth management service implication: Look to capitalise on changes to
market players' reputations through innovative marketing campaigns and
investment opportunities
- Innovative example: HSBC is rebranding in order to take market share
from its competition
- The French HNW is more concerned about asset preservation and positioning
for the upturn than on profiting in the downturn
- At present a product must be simple, transparent and retain its value
well
- Wealth management service implication: wealth managers must look to
develop simple, transparent products to preserve their clients' wealth
- Innovative example: iShares has launched a range of exchange traded
funds (ETFs)
- In two years' time, close ended property funds will be in demand as
investors will look to get back into real estate
- Wealth management service implication: look to capitalize at the start
of the upturn by developing innovative products, especially in real estate
- Innovative example - ASK set up a new Indian real estate fund to tap
into pent up demand
- Service quality and investment performance are the most important
criteria for selecting a wealth manager
- Wealth management service implication: offer other features to increase
service quality
- Innovative solution: Hayden Wealth provide a financial planning service
alongside its wealth management offering
THE FRENCH WEALTH MANAGER' S VIEW
- French Wealth managers have suffered a blow to their reputations, but they
perceive their quality of service to be high
- French wealth managers believe their greatest strengths lie in the
quality of their service and the personal relationships they have with their
clients
- Leveraging the use of CRM and offering financial planning are the best
ways to increase the share of a client' s wallet
- Being proactive and professional is key to retaining clients
- French wealth managers contact their clients less frequently than their
European peers
- Despite it being extremely important to clients, French wealth managers
speak to their clients less than the average European wealth manager
- Specific asset performance and investment opportunities are what most
clients want to discuss
- Money market funds are the most important resource focus due to the
harsh economic environment
APPENDIX
- The drivers of growth in the wealthy population
- Income growth (combined with inflation, changes in GDP by sector,
household savings rates and debt levels)
- Investment returns (market capitalization, interest rates and bond
yields)
- The following measures are not, in themselves, drivers of wealthy
population growth
- Market capitalization
- GDP
- The following measures are not drivers of wealthy population growth except
under very restricted circumstances
- Primary residence value growth
- Inheritance
- Methodology
- Wealth Management Market Leaders Survey 2009
- Global Wealth Model
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
TABLES
- Table: To what extent do you agree with the following? (1 = strongly
disagree, 2 = somewhat disagree, 3 = somewhat agree, 4 = strongly agree)
- Table: To what extent do you agree with the following? (1 = strongly
disagree, 2 = somewhat disagree, 3 = somewhat agree, 4 = strongly agree)
- Table: To what extent do you agree with the following, %
- Table: Household savings rate and retail debt outstanding per adult, % and
USD
- Table: Level of long term interest rate, %
- Table: Year-on-year stock exchange performances, %
- Table: Year-on-year net inflows into asset classes, EURbn
- Table: HNW attributes on a scale of 1 to 4 (risk appetite and knowledge)
(1 = very low, 2 = somewhat low, 3 = somewhat high, 4 = very high)
- Table: HNW attributes on a scale of 1 to 4 (1 = very low, 2 = somewhat
low, 3 = somewhat high, 4 = very high)
- Table: What proportion of your HNWs' portfolios is allocated to the
following five asset classes?
- Table: HNWs' portfolio allocation now versus in 2 years time
- Table: What are HNWs demanding today?
- Table: In 2 years' time, how much demand do you expect from HNWs for the
following product areas?
- Table: What do you find most influences the provider selection of HNWs?
- Table: HNW motivations when it comes to investment decisions, %
- Table: HNW motivations when it comes to investment decisions, %
- Table: HNW motivations when it comes to investment decisions, %
- Table: HNW motivations when it comes to investment decisions, %
- Table: What are the greatest strengths and weaknesses of your company
today?
- Table: What is the most effective means of increasing share of wallet
today?
- Table: What is the best way to retain clients today?
- Table: On average, how often do your relationship managers speak by phone
to each HNW client?
- Table: On average, how often do your relationship managers speak in person
to each HNW client?
- Table: When speaking with clients, what do they most want to talk about
today?
- Table: What product areas will your wealth management service focus most
resources on in the next 2 years?
FIGURES
- Figure: Wealth managers in France think that large wealth managers will
have the best opportunities in the next few years
- Figure: The view of wealth managers is that nationalized and part
nationalized banks will attract good relationship managers because they are
financially secure
- Figure: Both large and small wealth managers have their competitive
advantages
- Figure: Debt levels in France continue their increase
- Figure: Long-term interest rates are declining slowly after a high in 2007
- Figure: Stock markets around the world collapsed
- Figure: Outflows are seen in all asset classes apart from deposits
- Figure: HNW investors in France have a higher risk appetite than the
average European HNW investor
- Figure: There is a greater risk of HNW clients in France leaving to find
another wealth manager than the average European HNW investor
- Figure: The majority of HNW wealth in France is invested in the ' equities'
asset category, with this accounting for 24% of all investments
- Figure: In 2 years' time the majority of HNW wealth in France will be
invested in the ' cash or near cash' asset category with this accounting for
26% of all investments
- Figure: In France, HNW investors' greatest demand is for simple,
transparent investments
- Figure: In 2 years time, the greatest demand amongst HNW investors in
France will be for closed ended property funds with 22% of HNW investors
demanding this category of product
- Figure: Product demand will alter noticeably over the next two years
- Figure: HNW investors in France are most influenced by service quality in
their choice of Wealth Manager
- Figure: The greatest strength of Wealth Managers in France is their
quality of service
- Figure: The best way for Wealth Managers in France to increase share of
wallet is to offer financial planning
- Figure: The best way for Wealth Mangers in France to retain HNW investors
is to make sure all problems are resolved quickly and completely
- Figure: In France the Wealth Management relationship managers speak to
clients by phone approximately once a week
- Figure: In the Wealth Management relationship managers speak to in person
to clients approximately once a quarter
- Figure: The majority of clients in France want to speak to their wealth
manager about performance of specific asset classes within their portfolio
- Figure: Wealth managers in France will be focusing most of their resources
on money market funds in 2 years time
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