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Wealth in France: HNW Investors 2017

Wealth in France: HNW Investors 2017

Summary

Wealth in France: HNW Investors 2017 analyzes the French investment market, with a focus on the HNW segment. The report is based on our proprietary datasets.

Almost a third of French HNW investors have generated their wealth through being a first-generation entrepreneur. Inheritance ranks second as a source of wealth, and 46% of French investors attribute their fortune to the property and financial services sectors, reflective of market demand and stability. When opting to have wealth managed by a professional, French HNW clients are mostly driven by a lack of time and expertise. However, clients who self-direct their portfolios show a strong reluctance to relinquish complete control. Equities are the preferred asset class, followed by property and bonds. Demand is quite pronounced for tax advice, but financial planning services demand is forecast to grow at a faster pace.

Specifically the report -

  • Sizes the affluent market (both by number of individuals and their demographics) using our proprietary datasets.
  • Analyzes which asset classes are favored by French investors and how their preferences impact the growth of the total savings and investments market.
  • Examines HNW clients’ attitudes towards non-liquid investments such as property and commodities.
Scope
  • Equities and property make up the majority of French HNW portfolios. However, demand for alternative investments is expected to increase rapidly over the next year, while bonds have a significantly weaker outlook.
  • France’s HNW individuals are most likely to choose discretionary mandates. However, despite a strong preference for professional management nearly 30% opt for execution-only mandates, which is in stark contrast to the regional average.
  • Over 7% of French HNW individuals are expats, and most of them come from neighboring countries such as the UK and Belgium.
Reasons to buy
  • Benchmark your share of the French wealth market against the current market size.
  • Forecast your future growth prospects using our projections for the market to 2020.
  • Identify your most promising client segment by analyzing penetration of affluent individuals in France.
  • Evaluate your HNW proposition by understanding how the French tax system will impact HNW clients.


  • Executive Summary
    • French clients accumulate wealth through business ventures and inheritance
    • Key findings
    • Critical success factors
  • Profiling the French HNW Investor
    • Entrepreneurship and inheritance account for the largest sources of wealth
      • The bulk of French HNW individuals are males over 50 years old
        • Table Figure 1: The bulk of HNW investors in Franceare malesoverthe age of50
      • Sources of wealth accumulation for French HNW investors are diverse
        • Table Figure 2: First-generation entrepreneurshipis the main source of wealth forFrance'sHNW investors
      • Many HNW investors have built their fortunes through property and real estate
        • Table Production revenue by sector ( bn), 2000-15 Sector 2000 2010 2015 2014 -15 growth (%)
        • Table Figure 3: Property and real estateis the leading generator of Frenchwealth
      • Nearly half of HNW individuals in France are CEOs and directors
        • Table Figure 4: A quarter of HNW investors in France are CEOs
    • Expats account for over 7% of the local HNW population
      • Exceptional Economic Contribution residence permit facilitates business ventures
        • Table Figure 5: 7.2% of France's HNW client base is made up ofexpats
      • Nearly 80% of HNW expats are from Western Europe
        • Table Figure 6: Nearly 40% of Frances'sHNW expats are from the UK
      • Alexander Peter Wealth Management leads with expat services
        • Table Figure 7: Alexander Peter WealthManagement targetsBritish expats
  • French HNW Investment Style Preferences
    • Wealth managers should highlight the time-saving benefits of their services
      • Over half of France's HNW wealth is held in discretionary mandates
        • Table Figure 8: Over halfof HNW assets are managed using discretionary mandates
      • A lack of time and expertise drives demand for professional advice
        • Table Figure 9: A lack of timeis the major driver ofdemand forwealth management servicesin France
      • France's HNW investors place just over half of their managed wealth with their main wealth manager
        • Table Figure 10: The vast majorityof France'sHNW investors use two or moreadvisors
    • French HNW investors' lack of time is increasing demand for execution-only mandates
      • Demand is strongest for advisory mandates
        • Table Figure 11: HNW demand isparticularlyhighfor advisoryservices
      • Advisory mandates will remain the favored asset management service
        • Table Figure 12: Advisory asset management will experience the highest increasein demand
      • A strong reluctance to give up control is driving demand for advisory mandates
        • Table Figure 13: HNW investors in France are reluctant to relinquish control
      • French HNW investors who self-direct want exclusive control over some of their portfolio
        • Table Figure 14: Advisors should build strong relationshipswith their clients to offset self-directing trends
  • Understanding Asset Allocation Trends among French HNW Individuals
    • Alternatives will register the fastest increase over the next year
      • Equities continue to make up the largest segment of HNW portfolios
        • Table Figure 15: The average FrenchHNW portfolio is relatively balanced
      • Equity investments constitute the largest proportion of the average French HNW portfolio
        • Table Figure 16: The majority of equity investments are held in funds
      • Asset diversification is the main driver for equities investments
        • Table Figure 17: Equities growth will be driven by asset diversificationand dividend income opportunities
      • Bond investments are lower in France than in the rest of Europe
        • Table Figure 18: Bonds are the third most importantinvestment vehicle
      • Wealth managers expect bond holdings to decrease strongly
        • Table Figure 19: Bond investments are forecast to decrease across the continent
      • Cash and near-cash allocations are above the global average
        • Table Figure 20: Cash and near-cash allocations are higher in France than the rest of Europe
      • Clients cite risk-aversion and future investment opportunities as drivers for allocations into deposits
        • Table Figure 21: Riskaversionwill drive cash and near-cash investment growth
      • Property constitutes a quarter of the typical HNW portfolio
        • Table Figure 22: Property funds are significantly more popular than direct investments
      • Risk aversion is the main driver for property investments
        • Table Figure 23: Property investments are forecast to increasefurther
      • Alternatives constitute a meagre percentage of the typical HNW portfolio
        • Table Figure 24: Private equity funds are the most popular alternatives investment
      • Asset diversification is the leading driver for investments in alternatives
        • Table Figure 25: The majorityof industry experts expect alternative investments to increase
      • Commodities allocations are as low as the European average
        • Table Figure 26: French HNW investorsprefer to hold commodities directly
      • Asset diversification is the leading driver of commodity investments
        • Table Figure 27: Asset diversification drives French HNW investment in commodities
  • HNW Product and Service Demand
    • Wealth managers should lead with tax planning services
      • High taxation rates drive demand for planning services
        • Table Net wealth tax rates From To Rate (%)
        • Table Figure 28: Taxplanning is the priority for France'sHNW investors
      • Allen & Overy partners with advisors to increase their competitive advantage
        • Table Figure 29: Allen&Overy adviseswealth managers on tax matters
      • Demand for all planning services is forecast to increase
        • Table Figure 30: Financial planning will experience the highest increase in demand
      • Primonial grows its AUM by offering a multi-service proposition
        • Table Figure 31: Primonial offers a wide range of wealth management services
  • Appendix
    • Abbreviations and acronyms
    • Definitions
      • Affluent
      • HNW
      • Liquid assets
      • Mass affluent
    • Methodology
      • GlobalData's 2016 Global Wealth Managers Survey
      • GlobalData's 2015 Global Wealth Managers Survey
    • Global Data's WealthInsight
      • Exchange rates
        • Table Euro to US dollar exchange rate, December 31, 2015and December 31, 2016
    • Bibliography
    • Further reading
    • About GlobalData
      • Table Figure 32: Global Data at a glance
    • Disclaimer

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