Abstract
Introduction
The global economic crisis has had a major effect on Singapore' s onshore
wealthy population, potentially causing them to lose faith in their wealth
managers. To keep clients, wealth managers need to know what this lucrative
customer wants from them, in terms of products, services and interaction.
Scope of this research
- HNW demographic and attitudinal attributes based on our Wealth Management
Market Leaders Survey 2009
- Extensive primary research from 17 wealth management companies highlights
their strategies for revenue growth, acquiring and keeping clients
Research and analysis highlights
For the wealthy population living in Singapore, 2008 was a particularly tough
period to bear. Business owners faced weak operating conditions, the equity
market fell and properties lost value. After the first nine months of
2009,global economies are starting to appear more stabilized and a growing
expectation of recovery is starting to emerge.
Datamonitor believes that Singaporean HNWs will return to risky assets over
the short-term as economic conditions improve and investment assets increase
in value.
Clients in Singapore have superior financial product knowledge compared to
their Asia Pacific counterparts, however they struggled to fully understand
how market conditions impacted on their portfolio. This presents an
opportunity for wealth managers to add some real value to their offering by
providing educational services for clients if needed.
Key reasons to purchase this research
- Understand the HNW population' s investments by sector and geography,
appetite for risk, and reasons for choosing/leaving their wealth service
- Assess the threats and opportunities for wealth managers by understanding
how peers are planning to grow revenues, acquire and keep clients
Table of Contents
OVERVIEW
- Catalyst
- Summary
- Methodology
EXECUTIVE SUMMARY
- The wealth of Singaporean investors suffered at the hands of the global
financial crisis
- HNWs become more defensive at the start of 2009, however as economic
conditions continue to improve the expectation is that they will return to
real estate investments and equities
- While personal relationships and increased face to face contact from
wealth managers are vital at this time, wealthy clients are also viewing
financial stability as a key provider attribute
SINGAPORE' S WEALTH
- Singapore produced strong growth in the lead up to the financial crisis,
however 2008 was a tough time for investors
- Labor market conditions weakened for Singaporean workers in 2008
- Entrepreneurs struggled to grow their wealth as business conditions
deteriorated in Singapore
- Events in the global economy sparked selling pressure in the local stock
market
- Singaporean house prices declined for the first time in four years in Q3
2008
- The wealth data in 2009
THE SINGAPOREAN HNW INVESTOR
- Singaporean HNWs became more defensive in 2009, reducing their property
fund exposure and investing heavily in cash
- Cash and near cash represent an important asset class for Singaporean
HNWs
- Singaporean HNWs are expected to increase their investment in real
estate funds and reduce their exposure to cash
- Singaporean HNWs have superior knowledge of investments, however client
contact is still vitally important
- HNWs are risk seeking individuals and exhibit higher-than-average
knowledge of financial products
- Singaporean HNWs place high importance on personal relationships when
doing business, however they are less demanding for face to face
relationship management than the regional average
- The global downturn has shifted the demands of Singaporean investors
- Due to uncertainty in the markets, the majority of HNWs want investments
that they can easily understand
THE SINGAPOREAN WEALTH MANAGER' S VIEW
- Over the next two years, HNWs will be demanding protected products,
advisory asset management and exchange traded funds
- The majority of HNW clients will be demanding capital protected products
and advisory asset management over the next two years
- Wealth managers expect to focus their resources on foreign currency
investments over the next two years
- While personal relationships are still key in HNWs' choice of wealth
managers, they are focusing more on the financial stability of providers in
today' s market
- Financial stability is very important to HNWs in Singapore
- Singaporean wealth managers see personal relationships and technology as
their biggest strength
- Offering financial planning is seen as the best method for increasing
share of wallet
- Financial planning has increased in importance this year
- Singaporean wealth managers have less frequent contact with their clients
compared to the Asia Pacific average
- Singaporean wealth managers contact their clients over the phone less
frequently than their Asia Pacific counterparts
- Singaporean wealth managers are behind their Asia Pacific counterparts
at getting in front of their clients
- The overall performance of the portfolio and specific news events are
what HNWs most want to talk about when they speak to their wealth manager
APPENDIX
- 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
- Global Wealth Model
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
TABLES
- Table: What proportion of your HNWs' portfolios is allocated to the
following five asset classes?
- Table: HNWs' portfolio allocation now versus in 2 years' time
- Table: HNW attributes on a scale of 1 to 4 (1 = very low, 2 = somewhat
low, 3 = somewhat high, 4 = very high)
- Table: HNW attributes on a scale of 1 to 4 (1 = very low, 2 = somewhat
low, 3 = somewhat high, 4 = very high)
- Table: What are HNWs demanding today?
- Table: Over the next two years, how much demand do you expect from HNWs
for the following product areas?
- Table: What product areas will your wealth management service focus most
resources on in the next 2 years?
- Table: What will determine HNWs' choice of wealth management service over
the next two years?
- Table: What are your company' s biggest strengths and weaknesses today?
- Table: What is the most effective means of increasing share of wallet
today?
- Table: On average, how often do your relationship managers speak by phone
to each HNW client?
- Table: On average, how often do your relationship managers speak in person
to each HNW client?
- Table: When speaking with clients, what do they most want to talk about
today?
FIGURES
- Figure: The global financial crisis dramatically impacted on the
Singaporean labor market
- Figure: Business confidence suffered in 2008 as global economic conditions
impacted on the local market
- Figure: Like most developed economies in the Asia Pacific region,
Singapore' s stock market declined sharply in 2008
- Figure: The Singaporean property market boom cooled off in 2008
- Figure: The majority of HNW wealth in Singapore is invested in the ' cash
or near cash' asset category, with this accounting for 30% of all investments
- Figure: Wealthy Singaporean investors are set to increase their exposure
to real estate funds over the next two years
- Figure: HNW investors in Singapore have a higher risk appetite than the
average Asia Pacific HNW investor
- Figure: HNW clients in Singapore place more importance on having personal
relationships with their wealth manager than the average Asia Pacific HNW
investor
- Figure: In Singapore, HNW investors are demanding simple, transparent
investments
- Figure: Over the next two years, the greatest demand amongst HNW investors
in Singapore will be for capital protected products with 90% of HNW investors
demanding this category of product
- Figure: Wealth managers in Singapore will be focusing most of their
resources on foreign currency investments over the next two years
- Figure: HNW investors in Singapore will be most influenced by a provider' s
financial stability when selecting a wealth manager over the next two years
- Figure: Personal relationships were viewed as the greatest strength of
Singaporean wealth managers
- Figure: The best way for wealth managers in Singapore to increase share of
wallet is to offer financial planning
- Figure: In Singapore the Wealth Management relationship managers speak to
clients by phone approximately once a month
- Figure: The vast majority of relationship managers speak to clients in
person once a quarter
- Figure: The majority of clients in Singapore want to speak to their wealth
manager about performance of their overall portfolio
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