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Wealth in Russia: HNW Customers

Wealth in Russia: HNW Customers

Summary

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

Synopsis

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

The typical Russian HNW client is likely to have earned their income from the oil and gas industry. The HNW demographic is made up mainly of businessmen, while expats represent only a fraction of the local HNW population.

Direct corporate bond holdings account for a quarter of the average Russian HNW portfolio. The wealthiest Russians also show a strong interest in the commodities market; however, the next two years should see a greater diversification of investment portfolios.

Personal relationships between clients and their advisors form the foundation of wealth management business in Russia. Regular face-to-face meetings are a must and consequently create a challenge for private bankers in terms of time management.


  • Executive Summary
    • The mass affluent market promises strong growth and large volumes
    • Key findings
    • Critical success factors
  • Profiling the Russian HNW Consumer
    • Most Russian HNW individuals are entrepreneurs
    • Oil and gas is the main wealth industry
    • Expats represent just 4.6% of the Russian HNW population
      • The expat opportunity is limited and it is difficult to obtain economies of scale for a dedicated service
      • Job opportunities and business start-ups have been driving HNW individuals to Russia
      • Skilled work visas allow job transfers for up to three years
      • The UK and Germany are the largest feeder countries for HNW expats
      • The current economic and political situation is encouraging expats to leave Russia
  • Understanding Asset Allocation Trends Among Russian HNW Individuals
    • Bonds dominate Russian HNW portfolios
      • Wealth managers have shifted their clients' focus from cash to debt
      • Corporate bonds account for a quarter of HNW portfolios
      • The Russian fund market remains tiny and underdeveloped
    • Alternatives and equity will see an upsurge in demand
      • Over the next two years, equity is expected to see a 68% increase in demand
  • Product and Service Demand Among Russian HNW Individuals
    • Asset management services
      • Russian HNW individuals prefer specialists to maintain control over their investments
      • Over the next two years discretionary asset management will see rising demand
    • Planning services
      • Wealth managers must offer tax advice to attract HNW individuals
      • There will be rising demand for all services, particularly inheritance planning
      • Pension planning is well served in other parts of the market
    • Credit products
      • Increasing interest in real estate investment has boosted demand for credit
      • Demand for mortgages and loans is expected to rise, but market conditions are not encouraging
    • Art and philanthropy advice
      • Russian wealthy individuals show very weak interest in niche products
      • Demand for art and philanthropy advice will not increase significantly but it is worth keeping this option open
      • Insurance products
      • Insurance products will see rising demand, however
  • Customer Acquisition and Communication
    • Client referrals are crucial to the onboarding of clients
    • Client communication
      • Face-to-face meetings typically take place once a month
      • Wealth managers have decreased the frequency of social media communication
  • 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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