"Wealth in China: HNW Investors 2017", analyzes the investing preferences and portfolio allocation of Chinese HNW investors. The report is based on our proprietary Global Wealth Managers Survey.
The Chinese private banking industry is difficult to penetrate, but wealth managers that are aware of the local makeup of the HNW market will find it to be highly profitable. Chinese HNW investors have mainly sourced their wealth through a mixture of first-generation entrepreneurship and business ownership. While the largest chunk of HNW wealth is held via discretionary mandates, a noteworthy proportion remains up for grabs. The average portfolio is heavily invested into cash and near-cash products and property, and this is not expected to change in the near future. Chinese HNW clients also show moderate to strong demand for auxiliary services; in particular, financial and pension planning are popular, and demand for all planning services is forecast to rise. As a result, a multi-service proposition is critical in China.
Specifically the report -
- Profiles the average Chinese HNW investor in terms of their demographics and analyzes the expat opportunity in China.
- Analyzes which wealth management mandates are preferred among Chinese HNW investors and how demand will develop looking forward.
- Examines the allocation of Chinese HNW investors' portfolios into different asset classes and how this will change in the future.
- Analyzes product and service demand among Chinese HNW investors.
- Business owners are a lucrative segment, accounting for over 61% of the local HNW population.
- Expats also represent a noteworthy proportion of the Chinese resident HNW population, with the largest number stemming from the US.
- HNW investors allocate an above-average and growing proportion of their wealth into cash and near-cash products and real estate.
- 41% of HNW wealth is kept in discretionary mandates, but demand for automated investment services is on the rise.
- Financial and pension planning are particularly sought after, and should be part of every wealth manager's offering.
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 current and future demand for different asset classes among HNW individuals.
- Develop your service proposition to match the product and service demand expressed by Chinese HNW investors and react proactively to forecasted changes in demand.
Table of Contents
1. EXECUTIVE SUMMARY
- 1.1. A comprehensive service proposition is critical to success in China
- 1.2. Key findings
- 1.3. Critical success factors
2. PROFILING CHINESE HNW INVESTORS
- 2.1. A significant proportion of HNW investors have sourced their wealth through financial services and real estate
- 2.1.1. Female business owners represent a growing target market
- 2.1.2. Wealth managers in China must understand the specific needs of HNW business owners
- 2.1.3. A significant proportion of HNW individuals have built their fortunes through real estate and manufacturing
- 2.1.4. Chinese HNW investors are less likely to hold director roles than their peers in the wider region
- 2.2. Expats are an attractive segment in China
- 2.2.1. Expats account for over 25% of the Chinese HNW population
- 2.2.2. The majority of HNW expats in China come from the US, Australia, and Hong Kong
3. CHINESE HNW INVESTMENT STYLE PREFERENCES
- 3.1. Wealth managers will have to up their game to capture the large pot of Chinese HNW wealth that remains unmanaged
- 3.1.1. Chinese HNW clients place a below-average proportion of their wealth with their main wealth manager
- 3.1.2. Fostering loyalty is critical to minimize the risk of increased churn
- 3.1.3. The largest share of HNW wealth is kept in discretionary mandates, but a significant proportion remains up for grabs
- 3.2. Wealth managers cannot afford to ignore the opportunity automated investment services provide
- 3.2.1. Demand for advisory mandates will experience the strongest increase in demand
- 3.2.2. Demand for automated investment management will increase significantly
- 3.2.3. Wealth managers looking to push discretionary mandates should focus on the convenience factor
- 3.2.4. Self-directed services pose a real threat to traditional wealth managers
4. UNDERSTANDING ASSET ALLOCATION TRENDS AMONG HNW INDIVIDUALS IN CHINA
- 4.1. Chinese HNW investors allocate almost a third of their assets into cash or near-cash products
- 4.1.1. Equities constitute a below-average proportion of HNW investors' managed wealth
- 4.1.2. Bond investments have decreased in popularity over the past year
- 4.1.3. Cash and near-cash investments constitute an above-average proportion of the typical HNW portfolio
- 4.1.4. Offering a wide range of REITs is a must to lure investors away from direct property holdings
- 4.1.5. Offering a wide range of alternatives is a must in China
- 4.1.6. Chinese HNW investors have strong exposure to commodities
5. HNW PRODUCT AND SERVICE DEMAND
- 5.1. Demand for planning services is forecast to rise rapidly
- 5.1.1. Financial planning needs to be a core element of Chinese wealth managers' propositions
- 5.1.2. Demand for all auxiliary services is forecast to increase
- 6.1. Abbreviations and acronyms
- 6.2. Definitions
- 6.2.1. Affluent
- 6.2.2. HNW
- 6.2.3. Liquid assets
- 6.2.4. Mass affluent
- 6.3. Methodology
- 6.3.1. GlobalData's 2016 Global Wealth Managers Survey
- 6.3.2. GlobalData's 2015 Global Wealth Managers Survey
- 6.3.3. GlobalData's WealthInsight
- 6.4. Bibliography
- 6.5. Further reading
List of Figures
- Figure 1: The average Chinese HNW investor is younger than in the wider region
- Figure 2: Business owners dominate China's wealth market
- Figure 3: Entrepreneurs are a priority for Credit Suisse
- Figure 4: Over a quarter of HNW investo