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Wealth in Switzerland: HNW Investors 2017

Wealth in Switzerland: HNW Investors 2017

Summary

Inheritors form the largest segment among Swiss HNW individuals, who have generated their wealth mainly through property and real estate, in addition to professional services. Expats in Switzerland account for 8.4% of the HNW population, who along with the rest of the country’s HNW population are keen to invest a proportion of their wealth locally. Looking ahead, greater demand for wealth management services such as inheritance and financial planning is expected.

  • 33.8% of Swiss HNW individuals have accumulated their wealth through inheritance. At the same time, half of HNW investors are family business owners or first-generation entrepreneurs.
  • There is a notable expat population living in Switzerland, who invests a proportion of wealth in their country of residence mainly to avoid foreign exchange fees. 35.8% of wealth managers also believe HNW investors are unsure of whether they will return to their country of origin.
  • Swiss HNW investors prefer their wealth to be managed professionally, as 92.4% of total HNW investments are placed with a professional. The greatest proportion is held in discretionary mandates.
  • Asset allocation is heavily weighted towards equities and bonds, which together account for 69.6% of the typical Swiss HNW portfolio. Wealth managers anticipate strong growth for equity investments.
  • Inheritance and pension planning services show the strongest demand, but wealth managers expect financial planning services to experience the greatest increase in demand in the next two years.
  • Critical Success factors:
    • Focus on discretionary offerings - Discretionary mandates are forecast to remain the preferred choice among Swiss investors. Wealth managers should ensure their offering is comprehensive and appeals to HNW residents.
    • Inheritance planning services are key - Swiss HNW investors show strong demand across wealth management services. As there is a notable segment of the HNW population that sources their wealth from inheritance, wealth managers will do well to offer services that resonate with this segment.
    • Expand equity and bond allocations - We forecast a strong increase in demand for equities and bonds, so wealth managers should ensure these remain at the forefront of Swiss HNW portfolios.
    The report “Wealth in Switzerland: HNW Investors 2017” analyzes the investing preferences and portfolio allocation of Swiss HNW investors. Moreover this report provides the analysis of average Swiss HNW investor in terms of their demographics and analyzes the expat opportunity in Switzerland, identifies which wealth management mandates are preferred among Swiss HNW investors and how the demand will develop looking forward and Examines the allocation of Swiss HNW investors’ portfolios into different asset classes and how the allocation is expected to develop in the future. Additionally, this report helps you to analyze the product and service demand among Swiss HNW investors.

    Companies mentioned in this report: Family Office Selection Services, Guardian Wealth Management, UBS, Wüest Partner

    Scope
    • Profiles the average Swiss HNW investor in terms of their demographics and analyzes the expat opportunity in Switzerland.
    • Analyzes which wealth management mandates are preferred among Swiss HNW investors and how the demand will develop looking forward.
    • Examines the allocation of Swiss HNW investors’ portfolios into different asset classes and how the allocation is expected to develop in the future.
    • Analyzes the product and service demand among Swiss HNW investors.
    Reasons to buy
    • Develop and enhance your client targeting strategies using our data on HNW profiles and source of wealth.
    • Give your marketing strategies the necessary edge and capture new clients using insights from our data on HNW investors’ drivers for seeking investment advice vs self-directing.
    • Tailor your investment product portfolio to match the current and future demand for different asset classes among HNW individuals.
    • Develop your service proposition to match the service and product demand expressed by Swiss HNW investors and react proactively to the forecasted change in demand.


    • Executive Summary
      • HNW clients prefer a heavily managed portfolio with notable exposure to equities and bonds
      • Key findings
      • Critical success factors
    • Profiling the Swiss HNW Investor
      • Inheritance accounts for the largest proportion of Swiss HNW wealth
        • The majority of Swiss HNW individuals are males over the age of 50
          • Table Figure 1: 74.8% of Swiss HNW investors are over the age of 50
        • One third of Swiss HNW clients inherited their wealth
          • Table Figure 2: 50% of Swiss HNW investors accumulate their wealth as a family business owner or firstgeneration entrepreneur
        • Swiss HNW wealth is sourced from property and professional services
          • Table Figure 3: Almost half of Swiss HNW individuals have generated wealth from property and real estate
        • With the exception of director roles, Swiss HNW investors are more likely to fill leadership roles than the European average
          • Table Figure 4: Swiss HNW investors are likely to hold leadership positions
      • Expats in Switzerland form 8.4% of the population
        • The proportion of expats in Switzerland is more prominent than across Europe
          • Table Figure 5: Expats constitute a small but important proportion of the Swiss HNW population
        • HNW expats can obtain residency and citizenship through a range of options
        • Western Europe is the leading feeder region for HNW expats in Switzerland
          • Table Figure 6: The majority of HNW expats in Switzerland are from Western Europe
        • Cost considerations motivate expats to move investments to Switzerland
          • Table Figure 7: Swiss HNW expats invest a proportion of their wealth in Switzerland in order to avoid foreign exchange fees and charges
          • Table Figure 8: Guardian Wealth Management offers offshore and mortgage services to expat investors
    • Swiss HNW Investment Style Preferences
      • Swiss HNW investors have a propensity for their wealth to be professionally managed
        • Discretionary mandates are favored among Swiss HNW investors
          • Table Figure 9: Swiss HNW investors hold the greatest amount of wealth in discretionary mandates
        • Swiss HNW investors seek professional management for expertise and saving time
          • Table Figure 10: Lack of time and lack of expertise motivate Swiss HNW investors to seek professional management
        • Swiss HNW investors use more wealth management firms than the regional average
          • Table Figure 11: Swiss HNW investors prefer to place their managed wealth across three or more professionals
      • Swiss HNW individuals prefer professional wealth management
        • Table Figure 12: Wealth managers currently experience varied demand across investment services
        • Greater demand for traditional mandates is widely forecast
          • Table Figure 13: The greatest demand is expected for services that offer access to professional advice
        • HNW investors favor advisory mandates for the guidance/control balance
          • Table Figure 14: Reasons for investing a proportion of wealth via discretionary mandates differ from those for advisory mandates
        • HNW individuals prefer to have exclusive control
          • Table Figure 15: Swiss HNW investors display clear reasons for investing their wealth directly
    • Understanding Asset Allocation Trends among Swiss HNW Investors
      • Current asset allocation is heavily weighted towards equities
        • Equity and bond investments dominate Swiss HNW portfolios
          • Table Figure 16: Equities and bonds account for the largest asset allocations
        • Equity investments make up over one third of Swiss HNW portfolios
          • Table Figure 17: Like the rest of HNW investors in Europe, Swiss HNW individuals favor equity investments
          • Table Figure 18: The majority of wealth managers expect an increase in demand for equity holdings
        • Bond investments are currently notable but forecast to decline
          • Table Figure 19: Swiss HNW portfolios demonstrate a near-equal proportion of direct and fund holdings
          • Table Figure 20: 85% of wealth managers expect an increase in demand for bond investments
        • HNW individuals prefer to hold cash directly
          • Table Figure 21: Swiss HNW cash allocations favor local currency deposits
          • Table Figure 22: Swiss HNW investors do not hold cash for current returns and the expectation of higher rates
        • HNW client portfolios allocate a minimal proportion to property investments
          • Table Figure 23: Swiss property investments are overwhelmingly held through funds
          • Table Figure 24: Perception of safety is the main reason for holding property investments
        • Alternatives constitute 11.3% of the typical Swiss HNW portfolio
          • Table Figure 25: Swiss HNW investors' allocation into alternatives is above the European average
          • Table Figure 26: Alternatives are favored for features of diversification and future capital appreciation
        • Commodities constitute a minimal proportion of the typical HNW portfolio
          • Table Figure 27: Physical gold and commodity funds represent the majority of commodity allocations
          • Table Figure 28: Demand for commodities is expected to increase on a regional scale as well as in Switzerland
    • Swiss HNW Product and Service Demand
      • Planning services are in high demand in Switzerland
        • Inheritance planning presents an opportunity for wealth managers to resonate with older HNW investors and business owners
          • Table Figure 29: 80.3% of wealth managers experience strong demand for pension planning services
          • Table Figure 30: Strong demand for financial planning services is expected in the next two years
          • Table Figure 31: Union Bancaire Privée's FOSS offers support to families in their search for a family office
    • Appendix
      • Abbreviations and acronyms
      • Definitions
        • HNW
        • Liquid assets
      • Methodology
        • GlobalData's 2016 Global Wealth Managers Survey
        • GlobalData's 2015 Global Wealth Managers Survey
        • GlobalData's WealthInsight
      • Bibliography
      • Further reading

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