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Wealth in Taiwan: HNW Investors 2017

Wealth in Taiwan: HNW Investors 2017

Summary

Wealth in Taiwan: HNW Investors 2017, explores the investment preferences and portfolio allocation of Taiwanese HNW investors. The report is based on our proprietary Global Wealth Managers Survey.

With a focus on its manufacturing and IT sectors, Taiwan is an emerging market known for its entrepreneurial spirit and geographical proximity to hubs such as Hong Kong. The majority of Taiwanese HNW investors are over the age of 50, which can be attributed to historical industrialization and the notable proportion of individuals who are family business owners or first-generation entrepreneurs. Equity and cash investments constitute the greatest proportions of Taiwanese HNW portfolios, similar to the regional average. Taiwanese wealth managers experience strong demand for financial services, with pension planning in particularly high demand.

Specifically the report -

  • Profiles the average Taiwanese HNW investor in terms of their demographics.
  • Analyzes which wealth management mandates are preferred among Taiwanese HNW investors and how demand will develop going forward.
  • Examines the allocation of Taiwanese HNW investors’ portfolios into different asset classes and how this is expected to develop in the future.
  • Analyzes product and service demand among Taiwanese HNW investors.
Scope
  • 61% of Taiwanese HNW individuals have accumulated their wealth as a family business owner or first-generation entrepreneur, mainly through the manufacturing and IT sectors.
  • Taiwanese HNWs have a strong affinity for advisory mandates. Portfolios are often overseen by multiple wealth managers, with a balance between guidance and control the main driver.
  • Asset allocation is heavily weighted towards equities and cash, but wealth managers anticipate strong growth for bond and cash investments.
  • HNW investors are in hot pursuit of financial and pension planning services, but wealth managers expect tax and inheritance planning services to experience notable increases in demand.
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’ drivers for seeking investment advice vs self-directing.
  • Tailor your investment product portfolio to match current and future demand for different asset classes among HNW individuals.
  • Develop your service proposition to match the product and service demand expressed by Taiwanese HNW investors and react proactively to forecasted changes in demand.


  • Executive Summary
    • Understanding the needs of first-gen entrepreneurs is paramount
    • Key findings
    • Critical success factors
  • Profiling the Taiwanese HNW Investor
    • The largest proportion of Taiwanese HNW wealth can be attributed to business ownership
      • The majority of Taiwanese HNW individuals are males over the age of 50
        • Table Figure 1: Just 10% of HNW investors in Taiwan are aged 50 or younger
      • A third of Taiwanese HNW clients are first-generation entrepreneurs
        • Table Figure 2: 61% of Taiwanese HNW investors accumulate their wealth as a family business owner or firstgeneration entrepreneur
      • Taiwanese HNW wealth is sourced from manufacturing and IT services
        • Table Figure 3: Nearly half of Taiwanese HNW investors have generated their wealth from the manufacturing industry
      • BNP Paribas specifically caters to business owners
        • Table Figure 4: Entrepreneurs are an important target market for BNP Paribas
      • Taiwanese HNW investors are most likely to hold chairman and director roles
        • Table Figure 5: Taiwanese HNW investors are most likely to hold chairman and director roles
    • Expats in Taiwan are not a significant opportunity for wealth managers
      • The proportion of expats in Taiwan is less prominent than across Asia Pacific
        • Table Figure 6: Expats constitute a minor proportion of the Taiwan HNW population when compared to Asia Pacific
      • HNW expats can obtain residency through an entrepreneur visa
      • The US and Asia Pacific are the leading feeder markets for HNW expats in Taiwan
        • Table Figure 7: The majority of HNW expats in Taiwan are from the US and Hong Kong
  • Taiwanese HNW Investment Style Preferences
    • Taiwanese HNW investors prefer their wealth to be professionally managed
      • Advisory mandates are favored among Taiwanese HNW investors
        • Table Figure 8: Taiwanese HNW individuals have a propensity for advisory mandates
      • Taiwanese HNW investors seek professional management for better returns
        • Table Figure 9: Better returns and access to more sophisticated investments motivate Taiwanese HNW investors to seek a professional
      • Taiwanese HNW investors rely on more wealth management firms than the regional average
        • Table Figure 10: Taiwanese HNW clients place over half of their portfolio with their main wealth manager
    • HNW individuals in Taiwan prefer professional wealth management
      • Table Figure 11: Demand is strongest for advisory asset management
      • Greater demand for traditional mandates is widely forecast
        • Table Figure 12: Demand for advisory and automated services will rise notably over the next two years
      • HNW investors favor advisory mandates for the ability to balance guidance and control
        • Table Figure 13: Taiwanese HNW investors value advisory asset management for its collaborative features
      • HNW individuals prefer to have exclusive control
        • Table Figure 14: Wealth managers believe HNW investors who choose execution-only management lack trust in professionals
  • Understanding Asset Allocation Trends among Taiwanese HNW Investors
    • Asset allocation is weighted towards equities and cash
      • In the typical Taiwanese HNW portfolio, assets are spread across all classes
        • Table Figure 15: Taiwanese HNW investments are well diversified, with cash leading the way
      • Equity investments constitute the second-largest proportion of Taiwanese HNW portfolios Equity funds are favored over direct holdings
        • Table Figure 16: Taiwanese HNW investors hold a below-average proportion of wealth in equity investments
        • Table Figure 17: HNW individuals value equity investments for their capital appreciation opportunities
      • Bond investments are forecast to increase in demand Investors are attracted to direct holdings
        • Table Figure 18: Over half of Taiwanese bond investments are kept in corporate investment-grade bonds
        • Table Figure 19: Equity investments are driven by the predictability of returns
      • HNW individuals hold the greatest proportion of wealth in cash investments
        • Table Figure 20: Taiwanese HNW investors favor local and foreign currency deposits
        • Table Figure 21: Cash will remain a major component of Taiwan's HNW investor portfolio
      • HNW client portfolios in Taiwan are currently underweight in property investments
        • Table Figure 22: Funds are the preferred property investment of Taiwanese HNW individuals
        • Table Figure 23: Property prices are driven by price appreciation and inflation protection
      • Alternatives constitute a minimal proportion of the typical Taiwanese HNW portfolio Taiwanese HNW individuals prefer direct holdings to funds
        • Table Figure 24: Compared to the wider region, HNW investors in Taiwan hold a smaller proportion of wealth in alternatives
        • Table Figure 25: Wealth managers in Taiwan are downbeat about the prospects of alternative investments compared to the wider region
      • Taiwanese HNW individuals mostly shun commodity investments Commodity investments held in funds and ETFs are most common
        • Table Figure 26: HNW commodity holdings are even lower in Taiwan than in the wider region
        • Table Figure 27: Wealth managers in Taiwan are more hopeful about commodity demand than across Asia Pacific
  • Taiwanese HNW Product and Service Demand
    • Planning services are in high demand in Taiwan
      • Inheritance planning presents an opportunity for wealth managers to resonate with older HNW investors and business owners
        • Table Figure 28: Wealth managers experience very strong demand for financial and pension planning services
        • Table Figure 29: Around half of wealth managers expect demand for all financial services to increase in the next two years
        • Table Figure 30: UBS launches toolkit to help UHNW individuals set up a family office
  • Appendix
    • Abbreviations and acronyms
    • Definitions
      • HNW
      • Liquid assets
    • Methodology
      • GlobalData's 2016 Global Wealth Managers Survey
      • GlobalData's WealthInsight
      • Exchange rates
        • Table Taiwan new dollar to US dollar exchange rate, December 31, 2015 and December 31, 2016
    • Bibliography
    • Further reading

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