Table of Contents
OVERVIEW
- Catalyst
- Summary
- Methodology
EXECUTIVE SUMMARY
- The downturn has fundamentally increased the weighting of safer products
within HNW portfolios and raised demands for discretionary asset management
- HNWs' investment behavior is being shaped by their changing nature and
attitudes
- Wealth managers expect defensive products and advisory services to be in
most demand in the next two years
- Datamonitor believes higher risk products will come back strongly by 2011
and that advice will top the list of HNW service demands
CURRENT PRODUCT AND SERVICE NEEDS
- There has been a global movement towards lower risk assets in the wake of
the economic and financial meltdown
- HNW portfolios in Europe and Asia Pacific are now strongly weighted
towards the safer asset categories
- Current portfolios are skewed towards very low risk product areas
- European HNWs have large amounts invested in cash and near cash, and
fixed income products
- Asia Pacific HNWs have large amounts invested in cash and near cash, and
equities
- The services in demand by HNWs reflect the economic and market turbulence
that has been in evidence
- HNWs across Europe and Asia Pacific are looking for wealth managers to
provide services that assist them through these troubled times
- Discretionary asset management services are very much in demand in
Europe at the present time
- In Asia Pacific, HNWs are looking for hand holding and advisory asset
management services
- The changes in investment allocations are the result of changes in the
nature and attitudes of HNWs
- HNWs' appetite for risk is a key influencer of the asset mix in HNWs'
portfolios
- Knowledge of products is strongly correlated with the relative
importance of different product categories
FUTURE PRODUCT AND SERVICE NEEDS
- HNWs are expected to continue to play it safe in the next two years, while
demanding advisory services
- Capital protected products, and deposits and savings products will be in
most demand in the next two years, according to wealth managers
- The current turmoil is expected to shape the service needs of HNWs in
the next two years
- Datamonitor believes that higher risk products will have made a strong
return by 2011, and agrees that advice will top the list of service demands
- Datamonitor expects stock market recovery to commence in 2010 and HNWs
to return en masse to high risk products by 2011
- Datamonitor agrees with wealth managers that HNWs will be in search of
advice over the next two years
- Examples of innovations in promising product and service areas
- Examples of product innovation
- Examples of service innovation
APPENDIX
- Definitions
- 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
- Bibliography
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
TABLES
- Table: Year-on-year change in the asset categories (percentage points)
- Table: HNWs' portfolio allocations by product area
- Table: European HNWs' portfolio allocations by product area now
- Table: Asia Pacific HNWs' portfolio allocations by product area now
- Table: Services currently in demand by HNWs
- Table: Services currently in demand by European HNWs
- Table: Services currently in demand by HNWs in Asia Pacific
- Table: Appetite for risk among HNWs in 2008 and 2009
- Table: Correlations between HNW knowledge of products in 2009 and the
percentage of their portfolios in particular products in 2009
- Table: Expected HNW demand for the following product areas in the next two
years
- Table: Expected HNW demand in Europe for the following product areas in
the next two years
- Table: Expected HNW demand in Asia Pacific for the following product areas
in the next two years
- Table: Expected HNW demand for the following service areas in the next two
years
- Table: Expected HNW demand in Europe for the following service areas in
the next two years
- Table: Expected HNW demand in Asia Pacific for the following service areas
in the next two years
FIGURES
- Figure: Both regions have seen a sharp contraction in the relative
proportion of real estate investments
- Figure: HNWs have much more defensive portfolios than in 2008
- Figure: Cash and near cash makes up the biggest proportion of European
HNWs' portfolios
- Figure: Across Asia Pacific, the proportion of HNWs' portfolios held in
equities has not changed much in 2009, compared to 2008
- Figure: The recent volatility is a key determinant of what services are in
demand
- Figure: Asset management demands are polarized around discretionary and
execution-only services
- Figure: More hand holding is much in demand in Asia Pacific
- Figure: HNWs' appetite for risk has fallen sharply from 2008 to 2009,
corresponding with the rebalancing of their portfolios away from riskier assets
- Figure: Stock market performance and HNWs appetite for risk are correlated
- Figure: Wealth managers have very different views about what the future
will hold for products
- Figure: European wealth managers think capital protected products will be
the real winner in the next two years
- Figure: Wealth managers in Asia Pacific identify deposits and savings as
looking particularly promising
- Figure: Wealth managers in Asia Pacific expect big take up of execution
only asset management, while European wealth managers think discretionary
asset management will be the big winner
- Figure: There will be good demand for ancillary wealth management services
in Europe
- Figure: Wealth managers in Asia Pacific expect a lot of country-specific
variations in HNW service demands
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