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Wealth in France: HNW Customers

Wealth in France: HNW Customers

Summary

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

Synopsis

  • Understand the major sources of HNW wealth in France and the industries from which it has been amassed.
  • Interpret the investment portfolios of French HNW individuals through detailed asset allocation analysis.
  • Evaluate product and service demand among French HNW individuals, from discretionary asset management to art advisory and philanthropy services.
  • Analyze the best methods to capture new French HNW clients and how best to maintain communication throughout the client relationship.
Reasons To Buy
  • How do French HNW individuals amass their wealth?
  • Which assets make up an average French HNW investment portfolio?
  • Which wealth management products and services are in demand in France?
  • How often do French wealth managers contact their clients through email, social media, and face-to-face meetings?
  • How do French HNW individuals compare to their European peers?
Key Highlights

The typical French HNW client is a family business owner who has amassed their wealth through manufacturing. Expats constitute a relatively small percentage of the French HNW population, and thus it will be difficult for wealth managers to achieve the economies of scale necessary to target this market efficiently.

The French HNW portfolio shows less risk preference compared to the European average in terms of asset allocation. French clients tend to allocate a larger share of their wealth into bonds compared to their European counterparts. Looking forward, the weight of bonds is expected to decrease as French investors seek better returns from equities.

Advisory asset management is the mandate of choice among French HNW individuals. Over the next two years, discretionary and advisory asset management are expected to see significant increases in demand. French wealth managers should ensure their mandates are robust enough to meet this demand.


  • Executive Summary
  • Profiling the French HNW Consumer
    • Family business owners form the largest HNW group in France
      • Manufacturing is the main source of wealth despite the sector's difficulties
    • Expats represent 7.3% of the French HNW population
      • The expat opportunity is limited, making it difficult to obtain economies of scale
      • France benefits from free movement around the EU, with tighter visa restrictions for those outside of Europe
      • If a wealth manager sets up a dedicated expat desk, expertise on the UK is critical
  • Understanding Asset Allocation Trends Among French HNW Individuals
    • The French HNW portfolio allocation emphasizes low risk
      • Investment caution has resulted in a large bond allocation among French HNW investors
      • The French HNW portfolio is well diversified
      • Equity funds are popular among French investors
    • Equity will see a strong upsurge in demand
      • Over the next two years equity is expected to see the strongest growth in demand, while demand for bonds and cash will decline
  • Product and Service Demand Among French HNW Individuals
    • Asset management services
      • French HNW individuals prefer to maintain control over their investments
      • Over the next two years, discretionary asset management will see the greatest increase in demand
      • HNW clients demand bespoke discretionary asset mandates from wealth managers
    • Planning services
      • Wealth managers must offer tax and financial advice to attract HNW individuals
      • Demand for all services will increase dramatically
      • Pension planning is not well served by other parts of the market
    • Credit products
      • Demand for credit is below the regional average
      • Demand for mortgages and loans will drop
    • Insurance products
      • Insurance products experience the strongest demand
      • Life insurance demand will experience vast growth
    • Art advisory and philanthropy products
      • Demand for niche products remains below the regional average
      • Philanthropy and art advisory services will see a significant rise in demand
  • Customer Acquisition and Communication
    • Client referrals are the most likely to lead to new private banking clients
      • Entering the market is a challenge for new wealth managers
    • Client communication
      • Face-to-face meetings typically take place once a quarter
      • Mobile apps do not yet cover the optimal range of functionalities
      • Wealth managers are not keen on social media as a platform for client servicing
      • Company policy tends to restrict wealth managers from using social media
  • Appendix
    • Abbreviations and acronyms
    • Definitions
      • Affluent
      • HNW
      • Liquid assets
      • Mass affluent
    • Methodology
      • Verdict Financial's 2014 Global Wealth Managers Survey
      • Verdict Financial's 2013 Global Wealth Managers Survey
    • Bibliography
    • Further reading

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