Germany Wealth Management: HNW Investors 2019

Germany Wealth Management: HNW Investors 2019

Summary

German HNW investors - who skew heavily towards professional and entrepreneurial males - show strong demand for most forms of wealth advice and planning. A multi-service proposition underpinned by a proven ability to demonstrate returns will be key to tapping into changing demand preferences. German wealth providers should showcase their expertise across all forms of planning, especially around taxation, pensions, and socially responsible investments. A burgeoning appetite for novel options such as robo-advice also provides significant growth opportunities for German wealth managers.

Drawing on our proprietary research - including our annual Global Wealth Managers Survey - this report analyzes the service requirements, investing preferences, and portfolio allocation of German HNW investors.

Scope

  • The German HNW investor base is heavily male-led, and skews towards those aged 50 and above. Their wealth is predominantly accumulated through earned income (69.9%) and entrepreneurship (21.2%).
  • Wealth managers specializing in expatriation can profit from expats, who represent just under a quarter of the resident HNW population. French and British citizens lead HNW expats residing in Germany.
  • German HNW individuals are both promiscuous and loyal: they use an average of 4.7 wealth managers but invest over half of their managed wealth with their main wealth manager.
Reasons to Buy
  • Develop and enhance your client targeting strategies using our data on HNW profiles and sources of wealth.
  • Give your marketing strategies the edge required and capture new clients using insights from our data on HNW investors’ preferences for the various styles of asset management.
  • Tailor your product portfolio and service proposition to match current demand among HNW individuals and react proactively to forecasted changes in demand.


  • Executive Summary
    • A comprehensive service proposition is critical to success in Germany
    • Key findings
    • Critical success factors
  • Sizing and Forecasting the German Wealth Market
    • The economic impacts of COVID-19 will have an adverse effect on HNW wealth growth
      • Table Figure 1: COVID-19 will see German affluent wealth expand at a lower than expected 1.2% in 2020
    • 0.5% of Germans are considered HNW
      • Table Figure 2: 0.5% of Germans qualify as HNW
  • Demographics
    • German female HNW investors remain under-represented
      • Table Figure 3: Nine out of every 10 HNW Germans is male, and are typically aged 50 and above
    • Earned income accounts for over two thirds of German HNW citizens
      • Table Figure 4: Earned income and entrepreneurship account for over 90% of German HNW wealth
    • Three industries account for over half of German HNW assets
      • Almost a quarter of German HNW wealth has been sourced from the financial services industry
      • Strong exposure to the financial services sector will have a negative effect on HNW wealth
        • Table Figure 5: Financial services, healthcare, and manufacturing are the most prominent industries from which German HNW individuals have amassed their wealth
  • HNW Expats
    • French and UK citizens lead HNW expats residing in Germany
      • Table Figure 6: Almost a quarter of German HNW individuals are expats
    • Lifestyle, professional interests, and taxation drive expatriation
      • Table Figure 7: Expatriation among German HNW residents is primarily driven by better lifestyle conditions
  • HNW Investment Style Preferences
    • Over half of managed wealth is overseen by HNW individuals' main service provider
      • HNW individuals use an average of 4.7 wealth managers
        • Table Figure 8: HNW German investors show signs of being both loyal and promiscuous in their usage of wealth providers
      • HNW Germans primarily expect above-average returns from providers
        • Table Figure 9: HNW Germans are primarily influenced by the prospect of superior returns via their advisors
    • Discretionary mandates dominate, but self-directed options are becoming more popular
      • Most wealth is placed in discretionary and advisory mandates
        • Table Figure 10: German HNW wealth is evenly distributed across advisory and discretionary mandates
      • Fully automated digital financial advice platforms are making inroads
        • Table Figure 11: The merits of all types of asset management are seemingly apparent to Germany's HNW investors
      • German HNW investors are expected to increasingly opt for more hands-on mandates
        • Table Figure 12: Advisory mandates are expected to record the highest growth in the short term
        • Table Figure 13: HNW Germans are drawn to self-directing assets due to confidence in managing simple investments, prudence, and trust gaps
  • HNW Asset Allocation
    • HNW German portfolios remain skewed towards equites and bonds
      • Table Figure 14: German HNW individuals have an increasingly balanced asset allocation spread that largely mirrors the overall European region
    • Over 40% of German HNW assets are held via funds and ETFs
      • Table Figure 15: Funds account for over two fifths of the German HNW investor portfolio
    • The leading role of bonds in the asset mix is expected to accelerate
      • Table Figure 16: Bonds will experience the highest net increase in demand among German HNW investors
      • Table Figure 17: The strong forecast for bonds is predominately related to an expectation of higher returns
  • HNW Offshore Investment Preferences
    • Germany will close the gap versus the region for offshore investments
      • Table Figure 18: German HNW individuals hold over a quarter of their wealth offshore
    • Europe accounts for the lion's share of German offshore investment
      • Table Figure 19: Europe is by far the most popular regional destination for German HNW offshore bookings
    • A superior range of investments and better returns drive offshoring
      • Table Figure 20: Superior returns and a wider range of investments offshore are driving HNW wealth abroad
    • Equities are the main draw for HNW investors when offshoring
      • Table Figure 21: Foreign stock markets attract the bulk of German offshore investment
  • HNW Product Demand and Provision
    • Moderate to strong demand exists for all planning services
      • Table Figure 22: Demand is most pronounced for tax planning, yet there is a gap in service provision
    • Demand will grow for most HNW products and services
      • Table Figure 23: Portfolio secured lending, socially responsible investments, and pension planning offer the greatest growth opportunities in the German HNW market
  • Appendix
    • Abbreviations and acronyms
    • Methodology
      • Demographics data from GlobalData's WealthInsight
      • GlobalData's 2019 Global Wealth Managers Survey
      • Level of agreement calculation
      • Service level of demand score
      • Forecast level of demand calculation
    • Secondary sources
    • Further reading
    • About GlobalData
      • Table Figure 24: About GlobalData

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