Wealth Management In France 2006

Published by: Datamonitor

Published: Oct. 26, 2006 - 82 Pages

Table of Contents

EXECUTIVE SUMMARY

Introduction

Wealthy Clients in France

Competition for Wealthy Customers

INTRODUCTION

What is this report about?

Who is the target reader?

How to use this report

Note to readers

CHAPTER 1 WEALTHY CLIENTS IN FRANCE

Introduction

Key findings

France represents an attractive market for onshore and offshore wealth management

There are nearly 5m wealthy individuals in France today

Wealthy French individuals hold EUR953bn in onshore liquid assets

And the number of wealthy individuals will break the 6m barrier by 2010

While total onshore liquid assets will slowly creep over the EUR1trn mark

Corporate executives represent the biggest opportunity in the French wealth market

And wealthy French clients put between 20-30% of their portfolio offshore (mainly to avoid tax)

French wealth management clients are predominantly risk-averse

Clients in France are financially sophisticated and demanding, but loyal, and heavily influenced by personal relationships

Service quality and personal relationships are the top determinants for choice of wealth manager in France

As a result, referrals from existing clients are the number one customer acquisition technique

However, attracting clients does not mean keeping them: clients are placing more demands on wealth managers compared to two years ago

Being proactive with investment suggestions, financial planning, and resolving problems quickly and thoroughly are the best ways to retain clients

French clients leave their wealth manager when they fail to provide proactive advice, make too many errors & fail to understand client needs

Clients in France tend to have two wealth managers, but they hold between 50-70% of their wallet on average with a single wealth manager

And French clients have been with their current wealth manager for 5 years or more on average

CHAPTER 2 COMPETITION FOR WEALTHY CUSTOMERS

Introduction

Key findings

Wealth management in France is nationally concentrated, and thus leaves little room for foreign interest

BNP Paribas, Crédit Agricole and Rothschild are perceived by their peers to be the largest wealth managers in France

BNP Paribas was voted number one private bank in France 2006 by Euromoney

Crédit Agricole Private Banking aum grew 13% in 2005

Thresholds in France are around EUR1m

There has been slight interest from foreign wealth managers in France

As a result, domestic competion most concerns incumbent wealth managers

And it isn't only wealth managers that are taking business away from each other

Wealth managers in France are concentrating on getting more clients and improving their back offices, but are missing opportunities

Despite the additional costs, wealth managers think new clients will drive revenue

Increasing share of wallet is only moderately important, and will come through the provision of financial planning

Most are planning to generate revenue from pensions & alternative investments

CRM and support system improvements are the main strategic initiatives planned

As a result, IT and CRM system costs will be the main concern in controlling cost bases

Wealth managers in France tend to organize their business around a key relationship manager, and all have client management teams for different client segments

All French wealth managers give their clients several points of contact

All French wealth managers have dedicated teams organized around customer groups

And relationship manager performance is measured by client satisfaction rate

Human resourcing is an issue for wealth managers in France

With a focus on finding new clients, wealth managers are concentrating on staff recruitment

Data

APPENDIX

Definitions

Aggregate

CAGR

High net worth (HNW)

Liquid assets

Liquid asset bands

Mass affluent

Research methodology

Wealth Management Market Leaders Survey 2006

Global Wealth Model Methodology

The UK sub model

European sub model

Forecasting methodology

Continuous refinement to the understanding of liquid wealth distribution

Datamonitor's wealth numbers compared with other wealth numbers

Further Reading

Global Wealth Management SPP

Interactive Databases

Market Reports

Strategic Insight Reports

Wealth Management Competitor Tracker

Datamonitor Asia Pacific Wealth Management SPP

SPP writing team

List of Tables

Table 1: Number of wealthy French individuals (000s), segmented by asset band, 2001-5

Table 2: Value of onshore liquid assets held by wealthy French individuals, EURbn, segmented by asset band, 2001-2005

Table 3: Forecast number of wealthy French individuals (000s), segmented by asset band, 2006-2010

Table 4: Forecast value of onshore liquid assets held by wealthy French individuals, EURbn, 2006-2010

Table 5: French wealth manager opinion as to the client type offering the greatest potential in the French market over the next five years

Table 6: French wealth manager opinion as to the proportion of liquid assets wealthy investors put offshore

Table 7: French wealth manager opinion as to the main motivation for French investors to put their money offshore

Table 8: French wealth manager opinion as to where French investors prefer to put their offshore money

Table 9: Wealth manager opinion as to what their clients are most interested in today

Table 10: French wealth manager opinion as to the key influences that determine a French client's choice of wealth manager

Table 11: French wealth manager opinion as to the most effective customer acquisition techniques in the French market

Table 12: Agreement statements regarding client demands & preferences

Table 13: French wealth manager opinion as to the best way to retain clients

Table 14: French wealth manager opinion as to the most likely reasons for clients to leave a wealth management service

Table 15: French wealth manager opinion as to how many wealth managers wealthy clients have on average

Table 16: French wealth manager opinion as to the share of their clients' wallet held on average

Table 17: French wealth manager opinion as to how long their client base has been with them on average

Table 18: Minimum asset threshold set by French wealth managers for new clients, EUR

Table 19: Most pressing concerns for French wealth managers' business at present

Table 20: Threat level of several competitors to French wealth managers today

Table 21: Threat level of several competitors to French wealth managers in the next three years

Table 22: Major determinants of revenue growth in the French market over the next two years according to French wealth managers

Table 23: French wealth manager opinion as to the most effective means of increasing share of wallet

Table 24: Business potential of the following product areas over the next two years

Table 25: Strategic initiatives planned by French wealth managers over the next year

Table 26: Main areas of concern for French wealth managers in controlling their cost base

Table 27: Agreement statements regarding the nature of relationship managers in the French wealth management market

Table 28: Dedicated teams established by French wealth managers to attract a variety of customer groups

Table 29: Quantitative measures used by French wealth managers to assess their relationship managers

Table 30: Areas where French wealth managers will hire new staff in the next three years

List of Figures

Figure 1: The number of wealthy individuals in France has grown at a slow but steady pace since the brief dip in 2002

Figure 2: The value of liquid assets held by wealthy French clients approached nearly EUR100bn in 2005

Figure 3: The number of wealthy French individuals is expected to exceed 6m by 2010

Figure 4: The value of onshore liquid assets among wealthy French individuals is expected to reach 1.2trn by 2010

Figure 5: Corporate executives are believe to represent the biggest opportunity in the French wealth market

Figure 6: Half of wealth managers state that wealthy French clients put between 20-30% of their liquid assets offshore

Figure 7: And most affluent French individuals put money offshore for tax avoidance reasons

Figure 8: Nearly three fifths of wealthy French clients prefer Switzerland as their offshore destination

Figure 9: Wealthy French clients are most interested in protecting their asset base

Figure 10: Service quality is the key influence that determines a French client's choice of wealth manager

Figure 11: Referrals from existing clients are cited by French managers as the best way of acquiring new customers

Figure 12: French clients are demanding to know more about the management of their portfolio now than two years ago

Figure 13: The best way for French wealth managers to retain clients is to be proactive with investment suggestions and provide a decent financial planning service

Figure 14: French clients are most likely to leave their wealth manager due to a lack of proactive advice

Figure 15: Most wealthy clients in France have two wealth managers

Figure 16: French wealth managers believe they take care of somewhere between 51-70% of their client's wallet

Figure 17: French wealth managers tend to have a relationship of more than five years with their wealthy clients

Figure 18: Half of French wealth managers set a minimum asset threshold of EUR1m

Figure 19: The most pressing concern for the majority of French wealth managers is the increased competition from domestic players

Figure 20: Most French wealth managers recognize rival small & large wealth managers are a significant threat to their business in the present day

Figure 21: Obtaining new clients and improving investment performance are the two key drivers for revenue growth in the French market over the next two years

Figure 22: Offering financial planning is cited as the most effective means of increasing a client's share of wallet

Figure 23: Pensions & alternative investments have the most potential among wealthy French clients over the next two years

Figure 24: The majority of French wealth managers are planning to improve CRM & support systems over the next year

Figure 25: IT & CRM system costs are the main areas of concern for French wealth managers when it comes to controlling their cost base

Figure 26: Wealthy clients in France usually have a named relationship manager who is in contact with other specialists within the organization

Figure 27: A large degree of French wealth managers have dedicated teams set up to attract wealthy individuals such as lawyers, doctors & accountants

Figure 28: Relationship managers are assessed by a variety of quantitative measures, but client satisfaction rate has a slightly higher usage

Figure 29: The majority of new staff are expected to be hired from other wealth managers

Abstract

• Sizing and forecasting of mass affluent and high net worth individuals were generated from Datamonitor's proprietary Global Wealth Model.
• Data presented for 10 liquid asset bands, from EUR50-75K to EUR3m+.
• 11 French wealth managers were surveyed during Datamonitor's Wealth Management Market Leaders Survey 2006.
• Survey questions covered business and product/service development, client trends and attitudes and general market issues.

• Assess market attractiveness by reviewing size and growth forecasts up to 2010.
• Improve client service through greater awareness of their attitudes and concerns.
• Assess the threats and opportunities for wealth managers in the market.

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