Wealth Management in the Belgo-Dutch region 2009

Published by: Datamonitor

Published: May. 19, 2009 - 264 Pages

Table of Contents

Overview

Catalyst

Summary

Methodology

Executive Summary

Belgium and Holland are both reeling from the downturn due to their internationalized economies

HNWs are still willing to take on risk and are looking to profit in the downturn

Wealth managers in the Belgo-Dutch region believe their service quality is good, but need to understand the demands of their clients better

Table of Contents

Table of figures

Table of tables

Belgium's wealth

Belgium's downturn is no worse than that in the rest of Europe

The value of equities halved in 2008

Interest rates have plummeted after growing steadily for four years

Belgian investors have drastically altered their holdings allocations

There has been an exodus from mutual funds

Currency and deposits are not popular, but securities other than shares increased noticeably

The Netherland's Wealth

The Dutch economy has been hard hit

The Dutch economy is largely reliant on exports and its financial sector, both of which have been badly affected by the downturn

As in Belgium, disposable income continued to rise in 2008, but the household savings rate fell

Dutch equities have suffered badly

Dutch households are wary of falling equities and deposits remain a safe haven

The Belgo-Dutch HNW investor

Belgo-Dutch HNWs are loyal and have a high appetite for risk, but they are not financially knowledgeable and are therefore confused by the current market

Belgo-Dutch HNWs are defiant in the face of the downturn

Wealth management service implication: educate your clients

Innovative example from Switzerland: UBS is investing in educating its clients

Innovative example from the UK: Baker and McKenzie believe education is equally important for wealth managers due to the changes taking place in the industry at present

Belgo-Dutch HNWs are not particularly demanding when it comes to their wealth management service

Wealth management service implication: get close and understand your clients' needs

Innovative example from the US: Advisor Software has developed an application which tailors investment solutions to clients' needs

Belgo-Dutch HNW investors are relatively defensively positioned at present but are starting to return to riskier asset classes

Belgo-Dutch investors moved en masse into fixed income but are already moving out and into equities

Wealth management service implication: be proactive and innovative with investment suggestions

Innovative example from the UK: Citi Quilter has launched a new tool allowing clients and intermediaries to access the latest information in the quickest possible time

Over the next two years real estate and alternative investments will become more important in HNWs' portfolios

Wealth management service implication: help position investors for a recovery in property

Innovative example from Singapore: SG Private Banking creates global centre of expertise for real estate products

Corporate bonds will be hardest hit over the next two years, due to fear and opacity

Four main elements drive Belgo-Dutch HNWs' demands

HNWs want to profit in the downturn

HNWs are currently demanding more advisory and execution-only services

HNWs want to hear how long the crisis will last

HNWs want to be provided with auxiliary services

Wealth management service implication: accept clients' needs at the present time in order to build a relationship for the future

Demand will remain largely unchanged over the next two years

Wealth management implication: offer auxiliary services as a way in which to develop relationships and increase share of wallet

Innovative example from the UK: AWD Chase de Vere has launched Advanced Wealth Management

Belgo-Dutch HNWs are influenced by stable, innovative and proactive wealth managers

Wealth management service implication: look to capitalize on changes to market players' reputations through innovative marketing campaigns and investment opportunities

Innovative example from South Africa and Guernsey: FirstRand is re-launching and honing its target audience

Data

The Belgo-Dutch wealth manager's view

Belgo-Dutch wealth managers must work on enhancing core strengths such as their financial stability

Wealth managers' strengths are not aligned with HNWs' greatest needs

Wealth managers believe they should make their service more personal and emphasize financial stability to increase share of wallet

Being proactive and accurate are the major ways to retain HNW investors

Belgo-Dutch wealth managers regularly contact their clients

HNWs most want to discuss current and future investment opportunities with their wealth managers

There are few common areas where wealth managers will be focusing resource in two years' time, but direct equity will be important

APPENDIX

Additional survey questions on HNW motivations

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 drivers of wealthy population growth in themselves

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: HNW attributes on a scale of 1 to 4 (1 = very low, 2 = somewhat low, 3 = somewhat high, 4 = very high)

Table 2: HNW attributes on a scale of 1 to 4 (1 = very low, 2 = somewhat low, 3 = somewhat high, 4 = very high)

Table 3: What proportion of your HNWs' portfolios is allocated to the following five asset classes?

Table 4: HNWs' portfolio allocation now versus in two years' time

Table 5: What are HNWs demanding today?

Table 6: In two years' time, how much demand do you expect from HNWs for the following product areas?

Table 7: What do you find most influences the provider selection of HNWs?

Table 8: HNW motivations when it comes to investment decisions

Table 9: HNW motivations when it comes to investment decisions

Table 10: HNW motivations when it comes to investment decisions

Table 11: HNW motivations when it comes to investment decisions

Table 12: What are your company's greatest strengths

Table 13: What is the most effective means of increasing share of wallet today?

Table 14: What is the best way to retain clients today?

Table 15: On average, how often do your relationship managers speak by phone to each HNW client?

Table 16: On average, how often do your relationship managers speak in person to each HNW client?

Table 17: When speaking with clients, what do they most want to talk about today?

Table 18: What product areas will your wealth management service focus most resources on in the next two years?

List of Figures

Figure 1: High wage growth leads disposable income higher but household savings rates fall as the economic environment worsens

Figure 2: The Euronext Brussels has almost halved in value, but this loss is less than that of the total European stock market index

Figure 3: Interest rates are falling drastically after increasing constantly for four years

Figure 4: Belgian investors are increasing their holdings in currency and deposits only slightly, and are avoiding mutual funds altogether

Figure 5: Personal disposable income continues to grow but household savings rates decline

Figure 6: The Euronext Amsterdam lost half of its value in 2008

Figure 7: Deposits grow, while equities and mutual funds decline substantially

Figure 8: HNW investors in Belgo-Dutch have a higher risk appetite than the average European HNW investor

Figure 9: Belgo-Dutch HNWs are very loyal to their wealth managers

Figure 10: The majority of HNW wealth in Belgo-Dutch is invested in the 'fixed Income' asset category, with this accounting for 29% of all investments

Figure 11: In two years' time the majority of HNW wealth in the Belgo-Dutch region will be invested in the 'equities' asset category with this accounting for 26% of all investments

Figure 12: There will be a large shift out of corporate bonds over the next two years

Figure 13: In the Belgo-Dutch region, HNW investors' greatest demand is for a view about how long the current crisis will last

Figure 14: In two years' time, the greatest demand amongst HNW investors in the Belgo-Dutch region will be for direct equity investment, with 89% of HNW investors demanding this category of product

Figure 15: HNW investors in the Belgo-Dutch region are most influenced by the financial stability of the company in their choice of wealth manager

Figure 16: The greatest strength of wealth managers in the Belgo-Dutch region is their personal relationships with clients

Figure 17: The best way for wealth managers in the Belgo-Dutch region to increase share of wallet is to target relationship managers on cross-selling products

Figure 18: The best way for wealth managers in the Belgo-Dutch region to retain HNW investors is to not make errors

Figure 19: In the Belgo-Dutch region wealth management relationship managers speak to clients by phone approximately once a week

Figure 20: In the wealth management relationship managers speak to clients in person approximately once a quarter

Figure 21: The majority of clients in Belgo-Dutch want to speak to their wealth manager about views on what the future holds

Figure 22: Wealth managers in the Belgo-Dutch region will be focusing most of their resources on direct equity investment in two years' time

Abstract

• HNW demographic and attitudinal attributes based on our Wealth Management Market Leaders Survey 2009
• Extensive primary research from 20 wealth management companies highlights their strategies for revenue growth, acquiring and keeping clients

• Belgo-Dutch clients are characterized by loyalty, and have a high appetite for risk. However, they are not financially knowledgeable and are therefore confused by the conditions they see in the current market. They are relatively defensively positioned at present, but they are starting to return to riskier asset classes for returns.
• It is more important than ever that wealth managers work to ensure that their strengths are aligned with HNWs' greatest needs. Proactivity in providing clients with ideas and identifying opportunities in the downturn are both seen as weaknesses by many wealth managers, but they are among the most important service features to HNWs.

• Understand the HNW population's investments by sector and geography, 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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