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Wealth in the UK: HNW Customers

Wealth in the UK: HNW Customers

Summary

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

Synopsis

  • Evaluate product and service demand among UK HNW individuals, from discretionary asset management to pension, inheritance, and tax advice services.
  • Analyze the best methods to capture new UK HNW clients, including expats, and how best to maintain communication throughout the client relationship.
  • Interpret the investment portfolios of UK HNW individuals through detailed asset allocation analysis.
  • Understand the major sources of HNW wealth in the UK.
Reasons To Buy
  • How do UK HNW individuals amass their wealth?
  • What investments make up a typical UK HNW investment portfolio?
  • Which wealth management products and services are in demand in the UK?
  • How often do UK wealth managers contact their clients via email, social media, and face-to-face meetings?
  • How will UK HNW clients’ profile change in the coming years?
Key Highlights

UK HNW individuals have typically amassed their wealth through business and entrepreneurship. However, with significant wealth also drawn from earned income and inheritance, wealth managers must be prepared to service a wide range of clients.

UK HNW individuals have a longstanding love affair with equity investments, with 64.1% of their portfolios dedicated to this asset class, mainly via investment funds. On the other hand, cash is held directly by the vast majority of investors.

Providing planning advice is a must for wealth managers, especially as demand for inheritance, pensions, and retirement planning will increase.


  • Executive Summary
    • The UK's HNW clients believe in traditional wealth management
    • Key findings
    • Critical success factors
  • Introduction
    • Wealth in the UK: HNW Customers is part of a three-part series
    • The majority of data is drawn from our 2014 Global Wealth Managers Survey
  • Profiling the UK HNW Customer
    • The source of UK HNW wealth is dominated by entrepreneurs
      • A diversified market still requires a focus on entrepreneurs and business owners
      • Many HNW individuals have built their fortunes through financial services
    • Expats account for 10.6% of the UK HNW population
      • The majority of HNW expats originate from three countries
      • MASECO Private Wealth targets French HNW individuals residing in the UK
      • Investor visas provide a flow of new HNW individuals from outside the EEA
      • The new SRT is a further consideration for wealth managers targeting expats
  • Understanding Asset Allocation Trends Among UK HNW Individuals
    • Current asset allocation is heavily weighted toward equities
      • While equities dominate portfolios, bonds and property are underweight
      • Direct or fund holding preference varies by asset class
      • Detailed asset allocation confirms the growing importance of equity funds
    • UK HNW individuals' investments in equities will grow even further
      • Bonds markets will suffer because interest rates are low
      • Property investment is set to increase significantly among UK HNW individuals
  • Product and Service Demand Among UK HNW Individuals
    • Asset management services
      • UK HNW individuals expect discretionary mandates
      • Competitor activity is increasing in execution-only, but for HNW individuals discretionary is the preferred option
    • Planning services
      • Wealth managers cannot afford to not offer planning services
      • Demand for pension and inheritance planning will continue to grow
    • Credit products
      • Demand for mortgages and loans is increasing
      • No further growth is anticipated for credit products
    • Insurance products
      • In the UK demand for life insurance is lower than the European average
      • Demand for insurance services will remain stable
  • Customer Acquisition and Servicing
    • Client acquisition
      • Referrals are a critical tool for client acquisition in the UK
    • Client communication
      • Over a third of UK wealth managers meet their clients on a weekly basis, but remote channels help save time
      • Social media usage is increasing, but it is still mainly used as a marketing tool
      • Mobile app provision is below the European average
  • 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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