Product and Service Needs of Wealth Management Clients

Product and Service Needs of Wealth Management Clients published by Datamonitor in July, 2009. This report consists of 43 pages and the price starts from US $ 4495.

Introduction

Abstract

Introduction

The current crisis has profoundly impacted the types of products and services in demand among HNWs in Europe and Asia Pacific, and it will continue to impact their preferences going forward. To compete effectively, wealth managers need to understand what is in demand currently, what will be in demand going forward and how best to meet these demands.

Scope of this research

• Extensive primary research from 159 wealth management companies in Europe and 100 wealth management players in Asia Pacific
• European countries/regions covered in this report are Belgo-Dutch region, France, Germany, Italy, Nordics, Spain, Switzerland and the UK
• Asia Pacific countries covered in this report are Australia, China, Hong Kong, India, Singapore and Taiwan

Research and analysis highlights

In the last 12 months, the portfolios of HNWs in Europe and Asia Pacific have become much more defensive. Proportions of cash or near cash in portfolios have surged by eight percentage points in Europe and 10 percentage points in Asia Pacific, while real estate investments have fallen markedly.

In the next two years, wealth managers expect defensive products - specifically capital protected products and deposits and savings products - to be in the greatest demand among HNWs. While financial planning is expected to be the most popular service among HNWs.

Datamonitor thinks that a market recovery will prompt a large-scale return to direct equity investment, property and commodities by 2011. On the service side, Datamonitor sees most promise in advisory services around financial planning and tax.

Key reasons to purchase this research

• Gain a high-level snapshot of HNWs' current demands in Europe and Asia Pacific and an understanding of the factors influencing these demands.
• Find out what wealth managers think HNWs in Europe and Asia Pacific will be demanding in future.
• Learn about key product and service innovations in areas expected to be in great demand among HNWs.

Table of Contents

OVERVIEW

• Catalyst
• Summary
• Methodology

EXECUTIVE SUMMARY

• The downturn has fundamentally increased the weighting of safer products within HNW portfolios and raised demands for discretionary asset management
• HNWs' investment behavior is being shaped by their changing nature and attitudes
• Wealth managers expect defensive products and advisory services to be in most demand in the next two years
• Datamonitor believes higher risk products will come back strongly by 2011 and that advice will top the list of HNW service demands

CURRENT PRODUCT AND SERVICE NEEDS

• There has been a global movement towards lower risk assets in the wake of the economic and financial meltdown
  • HNW portfolios in Europe and Asia Pacific are now strongly weighted towards the safer asset categories
  • Current portfolios are skewed towards very low risk product areas
  • European HNWs have large amounts invested in cash and near cash, and fixed income products
  • Asia Pacific HNWs have large amounts invested in cash and near cash, and equities
• The services in demand by HNWs reflect the economic and market turbulence that has been in evidence
  • HNWs across Europe and Asia Pacific are looking for wealth managers to provide services that assist them through these troubled times
  • Discretionary asset management services are very much in demand in Europe at the present time
  • In Asia Pacific, HNWs are looking for hand holding and advisory asset management services
• The changes in investment allocations are the result of changes in the nature and attitudes of HNWs
  • HNWs' appetite for risk is a key influencer of the asset mix in HNWs' portfolios
  • Knowledge of products is strongly correlated with the relative importance of different product categories

FUTURE PRODUCT AND SERVICE NEEDS

• HNWs are expected to continue to play it safe in the next two years, while demanding advisory services
  • Capital protected products, and deposits and savings products will be in most demand in the next two years, according to wealth managers
  • The current turmoil is expected to shape the service needs of HNWs in the next two years
• Datamonitor believes that higher risk products will have made a strong return by 2011, and agrees that advice will top the list of service demands
  • Datamonitor expects stock market recovery to commence in 2010 and HNWs to return en masse to high risk products by 2011
  • Datamonitor agrees with wealth managers that HNWs will be in search of advice over the next two years
• Examples of innovations in promising product and service areas
  • Examples of product innovation
  • Examples of service innovation

APPENDIX

• Definitions
• The drivers of growth in the wealthy population
  • Income growth (combined with inflation, changes in GDP by sector, household savings rates and debt levels)
  • Investment returns (market capitalization, interest rates and bond yields)
• The following measures are not, in themselves, drivers of wealthy population growth
  • Market capitalization
  • GDP
• The following measures are not drivers of wealthy population growth except under very restricted circumstances
  • Primary residence value growth
  • Inheritance
• Methodology
  • Wealth Management Market Leaders Survey 2009
• Bibliography
• Further reading
• Ask the analyst
• Datamonitor consulting
• Disclaimer

TABLES

• Table: Year-on-year change in the asset categories (percentage points)
• Table: HNWs' portfolio allocations by product area
• Table: European HNWs' portfolio allocations by product area now
• Table: Asia Pacific HNWs' portfolio allocations by product area now
• Table: Services currently in demand by HNWs
• Table: Services currently in demand by European HNWs
• Table: Services currently in demand by HNWs in Asia Pacific
• Table: Appetite for risk among HNWs in 2008 and 2009
• Table: Correlations between HNW knowledge of products in 2009 and the percentage of their portfolios in particular products in 2009
• Table: Expected HNW demand for the following product areas in the next two years
• Table: Expected HNW demand in Europe for the following product areas in the next two years
• Table: Expected HNW demand in Asia Pacific for the following product areas in the next two years
• Table: Expected HNW demand for the following service areas in the next two years
• Table: Expected HNW demand in Europe for the following service areas in the next two years
• Table: Expected HNW demand in Asia Pacific for the following service areas in the next two years

FIGURES

• Figure: Both regions have seen a sharp contraction in the relative proportion of real estate investments
• Figure: HNWs have much more defensive portfolios than in 2008
• Figure: Cash and near cash makes up the biggest proportion of European HNWs' portfolios
• Figure: Across Asia Pacific, the proportion of HNWs' portfolios held in equities has not changed much in 2009, compared to 2008
• Figure: The recent volatility is a key determinant of what services are in demand
• Figure: Asset management demands are polarized around discretionary and execution-only services
• Figure: More hand holding is much in demand in Asia Pacific
• Figure: HNWs' appetite for risk has fallen sharply from 2008 to 2009, corresponding with the rebalancing of their portfolios away from riskier assets
• Figure: Stock market performance and HNWs appetite for risk are correlated
• Figure: Wealth managers have very different views about what the future will hold for products
• Figure: European wealth managers think capital protected products will be the real winner in the next two years
• Figure: Wealth managers in Asia Pacific identify deposits and savings as looking particularly promising
• Figure: Wealth managers in Asia Pacific expect big take up of execution only asset management, while European wealth managers think discretionary asset management will be the big winner
• Figure: There will be good demand for ancillary wealth management services in Europe
• Figure: Wealth managers in Asia Pacific expect a lot of country-specific variations in HNW service demands

Related Reports