Wealth in France: HNW Investors; Understanding HNW investors and wealth management strategies.

Wealth in France: HNW Investors; Understanding HNW investors and wealth management strategies.

Code: VF-VF0040CI | Published: Jul-2016 | Pages: 45 | Verdict Financial
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More than half of French HNW investors generated their wealth through being a business owner or first-generation entrepreneur. 56% of French investors attribute their wealth to the property and manufacturing industries, reflective of market demand and stability. When opting to have wealth managed by a professional, French HNW clients expect access to sophisticated and exclusive products as well as better returns. However, clients who self-direct their portfolios cite confidence and ease-of-use with digital platforms as reasons for managing their wealth.

Key Findings
- More than 60% of French HNW expats come from Western Europe. Countries in the Middle East, such as Saudi Arabia and the United Arab Emirates (UAE), are also feeder nations.

- 19.3% of wealth managers believe clients invest in their country of residence if they are uncertain about returning to their country of origin. French HNW expats also hope to avoid foreign exchange fees and gain better control over their investments.

- Frances HNW individuals are most likely to choose discretionary mandates but despite a strong preference for professional management, 26.5% opt for execution-only mandates.

- Equities and bonds make up the majority of French HNW portfolios. However, 76% of wealth managers expect a decrease in demand for bond investments over the next year, while property and alternatives show stronger outlooks.

- 66.7% of wealth managers experience strong demand for financial planning services. It is expected that pension planning will see the greatest increase in demand among planning services.

Synopsis
Verdict Financials "Wealth in France: HNW Investors" report analyzes the investing preferences and portfolio allocation of French HNW investors. The report is based on our proprietary Global Wealth Managers Survey.

Specifically the report:

- Profiles the average French HNW investor in terms of their demographics and analyses the expat opportunity in France.

- Analyzes which wealth management mandates are the preferred ones among French HNW investors and how demand will develop looking forward.

- Examines the allocation of French HNW investors portfolios into different asset classes and how the allocation is expected to develop in the future.

- Analyzes the product and service demand among French HNW investors.

Reasons To Buy
- Develop and enhance your client targeting strategies using our data on HNW profiles and sources of wealth.

- Give your marketing strategies the edge required and capture new clients using insights from our data on HNW investors drivers for seeking investment advice vs self-directing.

- Tailor your investment product portfolio to match the current and future demand for different asset classes among HNW individuals.

- Develop your service proposition to match the service and product demand expressed by French HNW investors and react proactively to the forecasted change in demand.

Key Highlights
- Develop and enhance your client targeting strategies using our data on HNW profiles and sources of wealth.

- Give your marketing strategies the edge required and capture new clients using insights from our data on HNW investors drivers for seeking investment advice vs self-directing.

- Tailor your investment product portfolio to match the current and future demand for different asset classes among HNW individuals.

- Develop your service proposition to match the service and product demand expressed by French HNW investors and react proactively to the forecasted change in demand.

Table of Contents

EXECUTIVE SUMMARY
French HNW clients accumulate wealth through business ventures
Key findings
Critical success factors
PROFILING THE FRENCH HNW INVESTOR
Family business owners account for the largest proportion of French HNW wealth
A diversified market requires wealth management services focused on HNW inheritor and earned income populations
Business France offers investment services to those seeking to do business with France
Many French HNW individuals have built their wealth in the property and manufacturing sectors
Wealth managers will do well to target HNW expats
Expats account for 8.5% of Frances HNW population
The French Residence Permit Program offers residency to entrepreneurs
More than 60% of Frances HNW expats come from Western Europe
Foreign exchange is the main reason HNW expats move investments to France
HNW INVESTMENT STYLE PREFERENCES
French HNW investors seek an active role in managing their wealth
Exclusivity and better returns motivate HNW investors to opt for wealth managers
Over half of Frances HNW wealth is held in discretionary mandates
Advisory asset management is expected to display the greatest demand increase
Greater demand for discretionary and advisory asset management is forecast
HNW investors cite various reasons for investing a proportion of their wealth independently
UNDERSTANDING ASSET ALLOCATION TRENDS AMONG FRENCH HNW INVESTORS
French wealth managers expect a noticeable increase in demand for equity
Equities will continue to make up the largest segment of HNW portfolios
French HNW individuals hold 42% of wealth in equities
Equity is predominately allocated to direct holdings rather than funds
French HNW clients cite time and diversification as reasons for preferring equity funds to direct holdings
Bonds are the second most important investment option for French HNW clients
Bond funds and direct corporate bonds account for the majority of holdings
Cash deposits are equally important for HNW portfolios in France and Western Europe
Cash investments are nearly equally allocated between local and foreign currency deposits
Clients cite varied reasons for opting for cash funds over direct holdings
Demand for property investments is expected to grow over the next year
54.5% of French HNW investors prefer direct property investments to funds and ETPs
AXA Investment Managers provides clients with direct property investment opportunities
Alternatives represent just 6% of French HNW portfolios
French HNW investors prefer funds to direct holdings
Demand for alternative investments is expected to grow
French HNW clients invest the smallest proportion of their wealth into commodities
Funds make up a significant proportion of commodity holdings
Diversification and protecting against inflation drive commodity investments
HNW PRODUCT AND SERVICE DEMAND
Demand is varied among planning services
Financial planning is the most desired among French HNW investors
Inheritance and pension planning services are expected to see moderate demand increases
Property and tax services experience moderate demand from French HNW investors
Investment property advice sees less demand than tax planning
Tax planning services will become a focal point of wealth management services
APPENDIX
Abbreviations and acronyms
Definitions
HNW
Methodology
Verdict Financials 2015 Global Wealth Managers Survey
Verdict Financials 2014 Global Wealth Managers Survey
Bibliography
Further reading
About Verdict Financial
Disclaimer

List of Figures


Figure 1: Family business owners and first-generation entrepreneurs account for over half of Frances HNW investors
Figure 2: Business France works with entrepreneurs to foster business opportunities with regional and global scope
Figure 3: Rationale for Martin Maurel acquisition, as presented by Rothschild and Co
Figure 4: Property and manufacturing are the most significant drivers of French HNW wealth
Figure 5: 42.7% of HNW expat clients are classified as long-term residents
Figure 6: Almost half of Frances HNW expats come from the UK
Figure 7: HNW expats living in France want to avoid foreign exchange fees and charges
Figure 8: HNW clients expect access to sophisticated investment options and better returns by using professional wealth management services
Figure 9: 52.8% of HNW assets are managed using discretionary mandates
Figure 10: Wealth managers experience the greatest demand for discretionary asset management
Figure 11: French wealth managers predict advisory mandates will see the largest demand increase over the next two years
Figure 12: French HNW investors are confident in and have a preference for managing a portion of their investments
Figure 13: Equities will continue to make up the largest proportion of French HNW portfolios
Figure 14: The majority of HNW investors prefer direct equity holdings to funds
Figure 15: Wealth managers are confident that equity demand will increase significantly
Figure 16: 56.2% of bond holdings are kept in funds
Figure 17: French HNW clients opt for bonds to diversify their portfolios
Figure 18: Frances HNW cash holdings are mostly held in local and foreign currency deposits
Figure 19: Similar to the rest of Western Europe, wealth managers in France expect demand for cash to decrease
Figure 20: French HNW investors prefer property investments held in direct holdings to funds
Figure 21: The AXA WF Global Flexible Property fund exposes investors to long-term returns from direct property investments
Figure 22: Rental income drives HNW demand for property
Figure 23: Alternative holdings are nearly equally allocated among hedge funds, private equity, and other structured products
Figure 24: Amundi Asset Management offers clients 23 years of experience in managing alternative portfolios
Figure 25: Asset diversification is the main driver for alternative investments and funds
Figure 26: French HNW investors prefer to invest in commodity funds rather than direct holdings
Figure 27: The main driver for commodity funds is asset diversification
Figure 28: Pension planning experiences the least demand from French HNW clients
Figure 29: Notable increases in demand for pension and inheritance planning are expected
Figure 30: 74.4% of wealth managers experience strong demand for tax planning services
Figure 31: Over the next two years a moderate increase in demand for investment property advice is expected
Business France
Rothschild and Co
Martin Maurel
AXA Investment Managers
Amundi Asset Management
CME Group

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