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Market Research Report

Wealth in the US: Sizing the Market Opportunity 2017

Published by GlobalData Product code 356445
Published Content info 47 Pages
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Wealth in the US: Sizing the Market Opportunity 2017
Published: March 16, 2017 Content info: 47 Pages

"Wealth in the US: Sizing the Market Opportunity 2017" analyzes the American wealth and retail savings and investments markets, with a focus on the HNW segment. The report is based on our proprietary datasets.

The US is home to the largest affluent population in the world and hosts a very advanced financial services sector, including the most sophisticated mutual fund and equity markets globally. The large affluent population is financially literate with high retail participation in both equities and mutual funds. US wealth managers thus have a lucrative target market onshore. In the future, growth in the affluent population's liquid assets will be pronounced compared to other developed economies. At the end of 2016, over two thirds of the US adult population was considered affluent, making the US home to the largest affluent population in the world.

Specifically the report -

  • Sizes the affluent market (both by number of individuals and the value of their liquid assets) using our proprietary datasets.
  • Analyzes which asset classes are favored by American investors and how their preferences impact the growth of the total savings and investments market.
  • Examines HNW clients' attitudes towards non-traditional investments such as property and commodities.
  • Identifies key drivers and booking centers for offshore investments.
  • Examines the tax landscape in the US and future implications for investors.


  • HNW individuals account for 1.8% of the US population and their numbers are expected to swell by over 5% year-on-year to 2020. UHNW individuals (those with over $10m in assets) are expected to increase by almost 10%.
  • The US retail investments market remains buoyant, but growth slowed significantly throughout 2014 and 2015, largely due to outflows of equities following a bumper year for the stock market in 2013.
  • HNW individuals are allocating over a tenth of their investible assets outside of traditional investments, with private equity, commodity funds, and direct property investments the most popular alternative choices in 2016
  • Offshore investments sit at 12.8%, with geographic diversification and tax efficiency the main drivers. Following the onset of the Foreign Account Tax Compliance Act (FATCA), client anonymity has diminished significantly as a driver of offshoring.

Reasons to buy

  • Benchmark your share of the American wealth market against the current market size.
  • Forecast your future growth prospects using our projections for the market to 2020.
  • Identify your most promising client segment by analyzing penetration of affluent individuals in the US.
  • Evaluate your HNW proposition by understanding how the American tax system impacts HNW clients.
  • Review your offshore strategy by identifying HNW motivations for offshore investments and their preferred booking centers.
Table of Contents

Table of Contents

  • 1.1. Key findings 2
  • 1.2. Critical success factors 2
  • 2.1. Affluent individuals in the US account for more than two thirds of the adult population 8
  • 2.1.1. Regional strategies are critical to effectively competing in such a large and diverse market 8
  • 2.1.2. HNW investors account for 1.8% of the market, and the very rich will get richer 9
  • 2.2. Overall growth of total liquid assets has been highly variable in recent years 10
  • 2.2.1. Wealth held by affluent investors has risen robustly, providing wealth managers with ample opportunities 10
  • 2.2.2. US HNW individuals hold over a third of total liquid assets - a share that will rise 10
  • 3.1. 2016 saw moderate growth, and the four-year outlook is one of cautious optimism 12
  • 3.1.1. A late cycle economic bounce will result in continued expansion of retail wealth 12
  • 3.1.2. The US market is heavily weighted towards equity and mutual funds 13
  • 3.1.3. Bonds will rally slightly in 2017, but the market will remain weighted to mutual funds and equities 15
  • 3.2. Deposits will see slightly slower but steadier growth, supported by benign inflation and higher interest rates 16
  • 3.2.1. A moderate rise in inflation and small interest rate hikes will have little effect on the deposit market 17
  • 3.2.2. GDP growth is also unlikely to strongly affect deposit allocations, especially if there is no real wage upturn to kickstart consumer spending 17
  • 3.2.3. The closure of the FDIC Transaction Account Guarantee program has diminished the attractiveness of deposits 17
  • 3.3. Bonds, equities, and mutual funds are more closely aligned with the fortunes of the stock market 18
  • 3.3.1. The US stock market recovered in 2016 after stagnating in 2015 18
  • 3.3.2. Retail bonds are to maintain moderate growth over the forecast period as the effects of QE and the zero interest rate policy diminish 20
  • 3.3.3. Bonds may lose their ultra-safe image as the effects of QE fall out of the US bond market 20
  • 3.3.4. The performance of the stock market also has a direct impact on equities and mutual funds 21
  • 3.3.5. Mutual funds in the US have become heavily weighted towards equities 23
  • 3.3.6. The US ETF industry will only continue to grow and evolve to meet the needs of retail investors 24
  • 4.1. HNW individuals allocate 14% of their investible assets outside of traditional investments 26
  • 4.1.1. Private equity funds, commodity funds, and direct property investments are the most popular HNW illiquid assets 26
  • 4.1.2. Private equity rides high and will continue to expand in 2017 26
  • 4.2. HNW individuals hold 12.8% of their assets offshore 27
  • 4.2.1. US HNW investors have usually had among the lowest proportion of assets offshore 27
  • 4.2.2. Achieving truly global portfolio exposure is the main offshore driver 28
  • 4.2.3. Personal tax rates are high but are a diminishing driver for offshore investment 29
  • 4.2.4. Trump's proposed tax cuts are likely to further eliminate tax efficiency as a driver of offshoring 30
  • 4.2.5. The UK, Canada, and China are now the most popular booking centers for US HNW individuals 31
  • 4.2.6. FATCA IGAs have been signed with a significant number of countries 32
  • 4.2.7. Amnesties have been set up to encourage wealth onshore 33
  • 5. APPENDIX 35
  • 5.1. Abbreviations and acronyms 35
  • 5.2. Supplementary data 36
  • 5.3. Definitions 39
  • 5.3.1. Affluent 39
  • 5.3.2. Bonds 40
  • 5.3.3. Cash 40
  • 5.3.4. Deposits 40
  • 5.3.5. Domicile 40
  • 5.3.6. Double taxation convention 40
  • 5.3.7. Equities 40
  • 5.3.8. Exchange of information 40
  • 5.3.9. FATCA 41
  • 5.3.10. HNW 41
  • 5.3.11. Liquid assets 42
  • 5.3.12. Mass affluent 42
  • 5.3.13. Mutual funds 42
  • 5.3.14. Onshore 42
  • 5.3.15. Residency 42
  • 5.4. Methodology 43
  • 5.4.1. 2016 Global Wealth Managers Survey 43
  • 5.4.2. 2015 Global Wealth Managers Survey 43
  • 5.4.3. Global Retail Investments Analytics methodology 43
  • 5.4.4. Forecasting methodology 44
  • 5.4.5. Global Wealth Model methodology 44
  • 5.5. Bibliography 45
  • 5.6. Further reading 45

List of Tables

  • Table 1: Federal income tax rates and income bands for 2017 23
  • Table 2: US: adult population segmented by affluent category and asset band (000s), 2010-15 29
  • Table 3: US: adult population segmented by affluent category and asset band (000s), 2016-20 30
  • Table 4: US: retail wealth segmented by affluent category and asset band (000s), 2010-15 31
  • Table 5: US: retail wealth segmented by affluent category and asset band (000s), 2016-20 32

List of Figures

  • Figure 1: More than two thirds of the US population is affluent, which represents the world's largest wealth opportunity 9
  • Figure 2: HNW and mass affluent individuals account for almost all onshore US liquid assets 11
  • Figure 3: The US retail savings and investments market will show moderate growth over the forecast period 13
  • Figure 4: Equity and mutual fund holdings account for 67.6% of the total onshore market 14
  • Figure 5: The US market is heavily weighted towards equity and mutual funds 16
  • Figure 6: Deposits will see steady growth, adding $2.02tn over four years 18
  • Figure 7: The US stock markets ended 2016 on an all-time high 19
  • Figure 8: Retail bond holdings will see modest growth after snapping their losing streak in 2015 21
  • Figure 9: Mutual funds and equities mirror the NYSE Index 23
  • Figure 10: US mutual funds are heavily weighted in equities 24
  • Figure 11: Direct property investments are the most popular asset outside traditional liquid allocations 27
  • Figure 12: US HNW individuals allocate 12.8% of their wealth offshore 28
  • Figure 13: Global diversification and tax efficiency are the main drivers of offshoring wealth 29
  • Figure 14: The UK, Canada, and China are now the booking centers of choice for US HNW citizens 32
  • Figure 15: Aside from FATCA, tax agreements have been signed across the world 33
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