Wealth Management in France 2009
Datamonitor
April 23, 2009 286 Pages - SKU: DFMN2230727
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Countries covered: France
Introduction
This report focuses on the onshore liquid wealth of affluent individuals and the liquid assets they hold, sizing, segmenting and forecasting the affluent population across 10 liquid asset bands. It also presents detailed HNW demographic and decision trigger analysis, and strategies to drive revenue growth based on large scale survey of the main players.
Scope- HNW demographic and attitudinal attributes based on our Wealth Management Market Leaders Survey 2009
- Extensive primary research from 20 wealth management companies highlights thier strategies for revenue growth, acquiring and keeping clients
- Aggregated data covers onshore liquid assets including cash and deposits, mutual funds, direct investment in equities and direct investment in bonds.
- Discusses the changing wealth management competitor landscape
Highlights
French banks have so far been less affected by the economic downturn than less conservative nations, but HNW sentiment has worsened. Opportunities will arise for those in a position to take advantage of them, but opinion is divided over which type of wealth manager will fare best over the next few years.
At present there is an increased demand for discretionary wealth management among French HNWs. This comes despite confidence in and loyalty to wealth managers being at its lowest. Some HNWs wish to partake in execution only management, but are unwilling to do so in the current market conditions.
French wealth managers are primarily concerned with the quality of their service. This is congruent with the high importance placed on personal relationships by French HNWs and their higher than average demand for face to face relationship management.
Reasons to Purchase- Understand the HNW population's investments by sector and geography, and see how innovative products/services have capitalized on these trends
- Understand the HNW population's appetite for risk, and reasons for choosing/leaving their wealth service
- Assess the threats and opportunities for wealth managers by understanding how peers are planning to grow revenues, acquire and keep clients
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- 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
- Table of Contents
- Table of figures
- Table of tables
- 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
- Data tables
- 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
- Data
- 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
- The UK sub model
- Global sub model (for all other countries)
- Forecasting methodology
- Continuous refinement to the understanding of liquid wealth distribution
- Datamonitor's wealth numbers compared with other wealth numbers
- Definitions
- Western Europe
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
- List of Tables
- Table 1: To what extent do you agree with the following? (1 = strongly disagree, 2 = somewhat disagree, 3 = somewhat agree, 4 = strongly agree)
- Table 2: To what extent do you agree with the following? (1 = strongly disagree, 2 = somewhat disagree, 3 = somewhat agree, 4 = strongly agree)
- Table 3: To what extent do you agree with the following, %
- Table 4: Household savings rate and retail debt outstanding per adult, % and USD
- Table 5: Level of long term interest rate, %
- Table 6: Year-on-year stock exchange performances, %
- Table 7: Year-on-year net inflows into asset classes, EURbn
- Table 8: 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 9: HNW attributes on a scale of 1 to 4 (1 = very low, 2 = somewhat low, 3 = somewhat high, 4 = very high)
- Table 10: What proportion of your HNWs' portfolios is allocated to the following five asset classes?
- Table 11: HNWs' portfolio allocation now versus in 2 years time
- Table 12: What are HNWs demanding today?
- Table 13: In 2 years' time, how much demand do you expect from HNWs for the following product areas?
- Table 14: What do you find most influences the provider selection of HNWs?
- Table 15: HNW motivations when it comes to investment decisions, %
- Table 16: HNW motivations when it comes to investment decisions, %
- Table 17: HNW motivations when it comes to investment decisions, %
- Table 18: HNW motivations when it comes to investment decisions, %
- Table 19: What are the greatest strengths and weaknesses of your company today?
- Table 20: What is the most effective means of increasing share of wallet today?
- Table 21: What is the best way to retain clients today?
- Table 22: On average, how often do your relationship managers speak by phone to each HNW client?
- Table 23: On average, how often do your relationship managers speak in person to each HNW client?
- Table 24: When speaking with clients, what do they most want to talk about today?
- Table 25: What product areas will your wealth management service focus most resources on in the next 2 years?
- List of Figures
- Figure 1: Wealth managers in France think that large wealth managers will have the best opportunities in the next few years
- Figure 2: The view of wealth managers is that nationalized and part nationalized banks will attract good relationship managers because they are financially secure
- Figure 3: Both large and small wealth managers have their competitive advantages
- Figure 4: Debt levels in France continue their increase
- Figure 5: Long-term interest rates are declining slowly after a high in 2007
- Figure 6: Stock markets around the world collapsed
- Figure 7: Outflows are seen in all asset classes apart from deposits
- Figure 8: HNW investors in France have a higher risk appetite than the average European HNW investor
- Figure 9: There is a greater risk of HNW clients in France leaving to find another wealth manager than the average European HNW investor
- Figure 10: The majority of HNW wealth in France is invested in the 'equities' asset category, with this accounting for 24% of all investments
- Figure 11: 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 12: In France, HNW investors' greatest demand is for simple, transparent investments
- Figure 13: 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 14: Product demand will alter noticeably over the next two years
- Figure 15: HNW investors in France are most influenced by service quality in their choice of Wealth Manager
- Figure 16: The greatest strength of Wealth Managers in France is their quality of service
- Figure 17: The best way for Wealth Managers in France to increase share of wallet is to offer financial planning
- Figure 18: The best way for Wealth Mangers in France to retain HNW investors is to make sure all problems are resolved quickly and completely
- Figure 19: In France the Wealth Management relationship managers speak to clients by phone approximately once a week
- Figure 20: In the Wealth Management relationship managers speak to in person to clients approximately once a quarter
- Figure 21: The majority of clients in France want to speak to their wealth manager about performance of specific asset classes within their portfolio
- Figure 22: Wealth managers in France will be focusing most of their resources on money market funds in 2 years time
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