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Wealth in the US: HNW Customers

Wealth in the US: HNW Customers

Summary

Part of a two-part series, Wealth in the US: HNW Customers analyzes the profile of US 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 US HNW individuals where applicable.

Synopsis

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

The US is the largest wealth market globally, with wealth creation occurring through a variety of means. The most common source of US HNW wealth is through inheritance. The HNW expat population represents 10.1% of the total US HNW population, with an increasing number of Chinese expats.

US HNW investors are heavily invested in traditional assets such as equities and bonds. However, over the next two years US wealth managers expect that allocation into traditional assets will decrease, with investment preferences shifting towards alternative investments.

Discretionary asset management services are slightly preferred over advisory mandates in the US wealth management market. Tax planning is central to US HNW wealth management, especially with FATCA fully in force and ongoing tax amnesties in place.


  • Executive Summary
    • Only high quality services can be successful in the US
    • Key findings
    • Critical success factors
  • Profiling the US HNW Consumer
    • US HNW wealth is mostly amassed by inheritors
      • US Trust provides Family Wealth Services
      • Morgan Stanley launches Institute of Family Wealth Management
      • Credit Suisse targets entrepreneurs
    • HNW wealth is sourced from a diverse range of industries
    • Expats account for over a 10th of the US HNW population
      • The number of HNW expats from China has been increasing
      • Job transfers are the main reason HNW individuals migrate to the US
  • Understanding Asset Allocation Trends Among US HNW Individuals
    • Current asset allocation is heavily weighted towards equities
      • Equity investment dominates HNW portfolios, with reduced allocation in cash and near-cash
      • Direct holdings are slightly preferred among US HNW investors
    • Demand for alternative investments will increase significantly
  • Product and Service Demand Among US HNW Individuals
    • Asset management services
      • US HNW individuals prefer discretionary mandates
      • Wealth managers expect discretionary asset management to see the most growth in demand
    • Planning services
      • Wealth managers must offer tax planning services to attract HNW individuals
      • The strongest growth in demand will be for financial planning
      • Credit Suisse Private Bank boasts a comprehensive service offering
    • Credit products
      • There is low demand for loans and mortgages among US HNW clients
      • Demand for loans will recover
    • Art and philanthropy advice
      • Demand for niche services in the US is well above the global average
      • Demand for philanthropy and art advice services will increase moderately
    • Insurance products
      • Demand for both general and life insurance is muted
      • Insurance products will experience only a slight increase in demand
  • Customer Acquisition and Communication
    • Referrals are crucial to client acquisition
    • Client communication
      • Face-to-face meetings typically take place once a quarter
      • Mobile app provision is low
      • Social media usage has been decreasing, but some competitors see opportunity in the space
  • Appendix
    • Abbreviations and acronyms
    • Definitions
      • Affluent
      • HNW
      • Liquid assets
      • Mass affluent
      • Robo-advisors
    • Methodology
      • Verdict Financial's 2014 Global Wealth Managers Survey
      • Verdict Financial's 2013 Global Wealth Managers Survey
      • Exchange rates
        • Table Euro-US dollar exchange rate
    • Bibliography
    • Further reading

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