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Wealth in China: HNW Customers

Wealth in China: HNW Customers

Summary

Part of a two-part series, Wealth in China: HNW Customers analyzes the profile of Chinese HNW individuals from their investments to product demand to sources of wealth. This report is based on our 2014 Global Wealth Managers Survey. Where applicable, the results of the survey are accompanied by best-practice case studies on how to target Chinese HNW individuals.

Synopsis

  • Evaluate product and service demand among HNW individuals, from discretionary asset management to art advisory services and credit.
  • Analyze the best methods for capturing new Chinese HNW clients and how best to maintain communication during the client relationship.
  • Interpret the investment portfolios of Chinese HNW individuals through detailed asset allocation analysis.
  • Understand the major sources of HNW wealth in China.
Reasons To Buy
  • How do Chinese HNW individuals amass their wealth?
  • What investments make up an average Chinese HNW investment portfolio?
  • Which wealth management products and services are in demand in China?
  • How often do Chinese wealth managers contact their clients face-to-face, via email, and through social media?
  • How do Chinese HNW individuals compare to their Asia Pacific peers?
Key Highlights

HNW individuals in China have amassed wealth mainly through entrepreneurship. The most prominent industries from which HNW individuals have amassed wealth are property, financial services, and manufacturing.

China hosts a large HNW expat community, with expats constituting 11.1% of the local HNW population according to our research. 56% of these expats have lived in the country for more than five years. Going forward, China is expected to attract a larger number of expats in the finance sector as the industry matures.

The private banking market in China is still developing, meaning there is greater room for growth than in more developed markets. All asset management and auxiliary services are forecast to experience strong increases in demand, and wealth managers should consider partnerships if they lack the in-house expertise to address changing needs.


  • Executive Summary
    • Understanding the servicing needs of local HNW clients is critical to success in China
    • Key findings
    • Critical success factors
  • Introduction
    • Wealth in China: HNW Customers is part of a two-part series
    • The majority of data is drawn from our 2014 Global Wealth Managers Survey
  • Profiling HNW Consumers in China
    • A significant proportion of Chinese HNW entrepreneurs have sourced their wealth from financial services and mining
      • Wealth managers in China have to understand the particular needs of HNW entrepreneurs
      • The majority of HNW individuals have built their fortunes through finance and manufacturing
    • Expats are an attractive segment in China
      • A significant proportion of HNW expats in China come from the US, Australia, Taiwan, and Canada
  • Understanding Asset Allocation Trends Among HNW Individuals in China
    • Chinese HNW investors allocate a quarter of their assets into cash or near-cash products
      • HNW investors in China tend to prefer direct investments, with the exception of equity funds
      • Local currency products and direct bond investments are popular among Chinese HNW individuals
      • With the exception of property, demand for all asset classes is forecast to increase over the next two years
  • Product and Service Demand Among HNW Individuals in China
    • Asset management services
      • Wealth managers in China should now lead with advisory mandates
      • Looking forward, demand for asset management will increase
    • Planning services
      • Retirement planning needs to be a core element of a Chinese wealth manager's proposition
      • Demand for all auxiliary services is forecast to skyrocket as Chinese HNW individuals are becoming more demanding
      • Wealth managers able to provide pension advice can address client demand more effectively
    • Credit products
      • Positive lending conditions are driving demand for credit in China
      • Demand for margin lending will rise significantly
    • Niche products
      • Demand for philanthropy services is forecast to increase, but does not justify the creation of an in-house unit
    • Insurance
      • Protection products are not an easy sale in China
      • Being able to support clients with their insurance needs is increasingly important
  • Customer Acquisition and Communication
    • Players looking to enter the Chinese wealth management market should not underestimate the importance of client referrals
      • Client referrals and relationship managers are crucial to client acquisition in China
    • Client communication
      • China's demanding HNW clients expect regular contact
      • Mobile wealth management is on the rise in China
      • Wealth managers in China are leading the way when it comes to social media
  • Appendix
    • Abbreviations and acronyms
    • Definitions
      • Affluent
      • Mass affluent
      • HNW
      • Liquid assets
    • Methodology
      • Verdict Financial's 2014 Global Wealth Managers Survey
      • Verdict Financial's 2013 Global Wealth Managers Survey
    • Bibliography
    • Further reading

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