Seizing the Global HNW Expat Opportunity
Summary
With increased global mobility, the global expat market has been growing rapidly. Be it for lifestyle, work, retirement, or tax-efficiencyreasons, more and more HNW individuals are leaving their home countries to start a new life abroad. Expats constitute over 11% of the global HNW population, equating to around 1.2 million individuals. This represents a sizable (albeit competitive) target market for wealth managers to target a desirable but highly competitive group with tailored product suites.
The US is home to the largest expat market when considering number of individuals (around 170,000). However, it is in the UAE, Singapore, and Hong Kong where expats constitute the largest proportion of the resident HNW population and where competition is thus the fiercest.
Looking at origins, HNW expats from Greater China and the Indian subcontinent make for the largest target markets, closely followed by HNW expats from the US and the UK. Service requirements can differ significantly between these diasporas, justifying the formation of dedicated desks reaching out to specific client groups.
Wealth managers with international operations are at an advantage, as they are able to start relationships pre-departure, but external referrals and focused targeting strategies will prove successful for locally-oriented players.
The research report Seizing the Global HNW Expat Opportunity, sizes and analyzes the global HNW opportunity, and provides detailed recommendations on how to best target and service this segment. The report is based on GlobalData’s proprietary Global Wealth Managers Survey.
Key findings included in the report -
- The global HNW expat market grew from 1 million individuals in 2014 to 1.2 million in 2017.
- Expats who emigrated from Greater China and the Indian subcontinent make for the largest target markets.
- 60% of HNW expats have resided in their country of choice for five years or more. However, those who expatriated as part of a job transfer are less likely to migrate permanently.
- 40% of HNW expats migrated to start a business, while another 24% expatriated as part of a job transfer.
- 34% of HNW expats have been acquired via client referrals and contacts, and 20% via internal referrals.
- Outlines the size and composition of the global HNW expat market.
- Analyzes which countries have been able to attract the largest proportions of HNW expats and why.
- Examines the motivations behind HNW individuals relocating to another country.
- Discusses the effectiveness of different targeting strategies in the HNW expat space.
- Details how to best service HNW expats.
- Explores the differences between long- and short-term expats in terms of service requirements and targeting strategies.
Scope
- The global HNW expat market grew from 1 million individuals in 2014 to 1.2 million in 2017.
- Expats who emigrated from Greater China and the Indian subcontinent make for the largest target markets of 175,524 and 167,955 individuals respectively.
- 60% of HNW expats have resided in their country of choice for five years or more. However, those who expatriated as part of a job transfer are less likely to migrate permanently.
- 40% of HNW expats migrated to start a business, while another 24% expatriated as part of a job transfer.
- 34% of HNW expats have been acquired via client referrals and contacts, and 20% via internal referrals.
- Identify key expat hubs and understand the level of competition intensity in these markets.
- Understand the size and service requirements of different diasporas across the world.
- Develop and enhance your client targeting strategies using our proprietary data on the effectiveness of various strategies in the HNW expat space.
- Give your marketing strategies the edge required and capture new clients using insights from our data on HNW investors’ reasons for expatriating.
- Tailor your product portfolio to match demand patterns across the different segments that make up the global HNW expat market.
- Understand how best to reach out to HNW expats pre- and post-departure.
- Understand how select competitors are successfully reaching out to HNW expats.
- 1. EXECUTIVE SUMMARY
- 1.1. HNW expats are a sizable but competitive client segment
- 1.2. Key findings
- 1.3. Critical success factors
- 2. THE HNW EXPAT OPPORTUNITY IS CONCENTRATED IN KEY HUBS
- 2.1. Defining the expat opportunity
- 2.2. Lenient visa requirements, stable economic conditions, and lifestyle benefits are attracting expats to key hubs
- 2.2.1. The UAE is the preferred destination among cashed-up investors, but competition is fierce
- 2.2.2. Strong labor markets and an abundance of international companies make Singapore and Hong Kong a natural choice
- 2.2.3. In relation to its locally-born HNW population Switzerland offers the largest expat opportunity in Europe, but the UK and Germany impress with sheer numbers
- 2.3. Targeting efforts begin in Asia, as more than half a million expats originate from the continent
- 2.3.1. Chinese expats’ higher likelihood to migrate permanently makes them an attractive target market
- 2.3.2. Bank of China is following Chinese migrants to the UK
- 2.3.3. Expats from the Indian subcontinent are a sizable target group with distinct servicing needs
- 2.3.4. Recent tax changes will drive already high demand for tax advice among US expats
- 2.3.5. UK expats show rising demand for properties in their country of origin despite growing regulatory pressure
- 3. UNDERSTANDING HNW EXPATS: 40% OF HNW MIGRANTS HAVE EXPATRIATED TO START A BUSINESS
- 3.1. Understanding motivations to migrate is critical, as the demographic profiles of HNW expats and residents are similar
- 3.1.1. Targeting female HNW expats has the potential to yield results
- 3.1.2. Factors other than demographics are more important to appeal to HNW expats
- 3.2. Expat entrepreneurs are a lucrative segment, but providers with offshore capabilities will also find professionals attractive
- 3.3. Offering business banking services is a must in the expat space
- 3.3.1. HNW investors looking to migrate to the US will appreciate support not just in setting up their business but in navigating complex migration laws
- 3.3.2. China and Hong Kong also attract a large number of HNW entrepreneurs
- 3.4. Those migrating as part of a job transfer also form a large segment, but they make for a less lucrative target group
- 3.4.1. Professionals are less likely to reside in their country of choice permanently
- 3.4.2. Providers targeting investors who migrated as part of job transfer need offshore capabilities
- 3.4.3. Offers such as Lloyds’ Premier International Account allow wealth managers to minimize the risk of the relationship being terminated when a client decides to expatriate
- 3.5. Expatriation drivers other than entrepreneurialism and job transfers are specific to the country of residence
- 3.5.1. Tax efficiency as a driver for expatriation is only relevant in a few countries
- 3.5.2. Despite the lack of income tax, tax advisory services are highly sought by expats in the UAE
- 3.5.3. Going forward, tax efficiencies as a driver for HNW migration are set to become less relevant in Canada, but demand for tax advice is set to remain strong
- 3.5.4. Pension advice has to be a key focus in Malaysia and the Philippines, as the countries are competing for cashed-up retirees
- 3.5.5. Switzerland is Europe’s number one retirement destination, but visa changes are making other countries more attractive
- 3.5.6. Targeting expat students will prove lucrative in countries with first-class education systems
- 4. TARGETING: REACHING OUT TO EXPATS PRE-DEPARTURE IS CRITICAL
- 4.1. Fierce competition in key expat markets calls for a differentiated targeting strategy
- 4.2. Generating positive word of mouth is critical
- 4.3. Greater emphasis should be placed on internal referrals
- 4.3.1. International players enjoy a distinct advantage in the expat space, but more has to be done
- 4.3.2. Wealth managers able to leverage internal referrals will be able to service clients more effectively
- 4.3.3. N26 Video-Ident allows for hassle-free account opening
- 4.4. External partnerships are particularly important for domestically-focused players
- 4.4.1. Partnerships with relocation companies allow wealth managers to offer a more holistic service proposition
- 4.4.2. Providing relocation services is of particular importance in less developed markets
- 4.4.3. Wealth managers in Singapore, the Netherlands, and Canada should consider partnerships with employers
- 4.5. The importance of a relationship manager’s own contacts as a source of new business means brand-building exercises are paramount
- 4.6. The best targeting efforts are to no avail if HNW expats terminate the relationship after repatriating
- 4.6.1. HNW expats in Australia, Switzerland, and Turkey are among the most unsettled, calling for a selective targeting strategy
- 4.6.2. Credit Suisse offers investment portfolios compliant with Australia’s Significant Investor Visa requirements
- 5. APPENDIX
- 5.1. Abbreviations and acronyms
- 5.2. Definitions
- 5.2.1. HNW
- 5.2.2. HNW expats
- 5.2.3. Liquid assets
- 5.3. Supplementary data
- 5.4. Methodology
- 5.4.1. GlobalData’s 2017 Global Wealth Managers Survey
- 5.4.2. GlobalData’s 2016 Global Wealth Managers Survey
- 5.4.3. GlobalData WealthInsight
- 5.4.4. Global Wealth Model methodology
- 5.4.1. Exchange rates
- 5.5. Bibliography
- 5.6. Further reading
- List of Tables
- Table 1: Demographic profiles of NRIs in key markets
- Table 2: Expats as a proportion of the total HNW population and the total number of expats per country
- Table 3: Reason to expatriate by country
- Table 4: Asia Pacific: Proportion of HNW expats acquired by different targeting methods
- Table 5: Europe: Proportion of HNW expats acquired by different targeting methods
- Table 6: Other regions and global average: Proportion of HNW expats acquired by different targeting methods
- Table 7: Key residency requirements of selected countries
- Table 8: US dollar exchange rates
- List of Figures
- Figure 1: The US is home to the largest HNW expat population, but proportionally the expat opportunity is bigger in the UAE
- Figure 2: Emirati HNW expats are a highly competitive segment
- Figure 3: HNW expats from Greater China make for a sizable target segment
- Figure 4: The Middle East and the US are popular destination for NRIs
- Figure 5: H&R Block’s expat teams service US expat clients remotely
- Figure 6: HNW expats’ demographic profile is almost identical to non-expats
- Figure 7: HNW expat entrepreneurs are an attractive target market
- Figure 8: The US is a popular destination among HNW entrepreneurs
- Figure 9: Singapore attracts a large number of HNW investors who expatriated as part of a job transfer
- Figure 10: 44% of HNW expats have resided in their country of choice for more than 10 years
- Figure 11: Offshore capabilities are a must in Singapore
- Figure 12: Lloyds supports its clients while they are residing overseas
- Figure 13: Tax efficiency as a driver for HNW migration is of particular importance in the UAE
- Figure 14: Tax reasons are an important driver for HNW expats investing in the UAE as opposed to their country of origin
- Figure 15: Westpac targets overseas students
- Figure 16: Competition in the top expat markets is fierce
- Figure 17: Client referrals are the most successful method of targeting expat clients
- Figure 18: N26 Bank leverages technology to target a more international audience
- Figure 19: Canadian wealth managers are strongly positioned to leverage external referrals
- Figure 20: Wealth managers should consider partnerships with companies such as Amaroo Relocation
- Figure 21: A relationship manager’s contacts are an important source of new clients in the Netherlands
- Figure 22: The majority of expats have been residing abroad for more than five years
- Figure 23: Credit Suisse targets expats via the Significant Investor Visa program
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