"Wealth in France: HNW Investors 2017" analyzes the French investment market, with a focus on the HNW segment. The report is based on our proprietary datasets.
Almost a third of French HNW investors have generated their wealth through being a first-generation entrepreneur. Inheritance ranks second as a source of wealth, and 46% of French investors attribute their fortune to the property and financial services sectors, reflective of market demand and stability. When opting to have wealth managed by a professional, French HNW clients are mostly driven by a lack of time and expertise. However, clients who self-direct their portfolios show a strong reluctance to relinquish complete control. Equities are the preferred asset class, followed by property and bonds. Demand is quite pronounced for tax advice, but financial planning services demand is forecast to grow at a faster pace.
Specifically the report -
- Sizes the affluent market (both by number of individuals and their demographics) using our proprietary datasets.
- Analyzes which asset classes are favored by French investors and how their preferences impact the growth of the total savings and investments market.
- Examines HNW clients’ attitudes towards non-liquid investments such as property and commodities.
- Equities and property make up the majority of French HNW portfolios. However, demand for alternative investments is expected to increase rapidly over the next year, while bonds have a significantly weaker outlook.
- France’s HNW individuals are most likely to choose discretionary mandates. However, despite a strong preference for professional management nearly 30% opt for execution-only mandates, which is in stark contrast to the regional average.
- Over 7% of French HNW individuals are expats, and most of them come from neighboring countries such as the UK and Belgium.
Reasons to buy
- Benchmark your share of the French 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 France.
- Evaluate your HNW proposition by understanding how the French tax system will impact HNW clients.
1.1. French clients accumulate wealth through business ventures and inheritance
1.2. Key findings
1.3. Critical success factors
2. PROFILING THE FRENCH HNW INVESTOR
2.1. Entrepreneurship and inheritance account for the largest sources of wealth
2.1.1. The bulk of French HNW individuals are males over 50 years old
2.1.2. Sources of wealth accumulation for French HNW investors are diverse
2.1.3. Many HNW investors have built their fortunes through property and real estate
2.1.4. Nearly half of HNW individuals in France are CEOs and directors
2.2. Expats account for over 7% of the local HNW population
2.2.1. Exceptional Economic Contribution residence permit facilitates business ventures
2.2.2. Nearly 80% of HNW expats are from Western Europe
2.2.3. Alexander Peter Wealth Management leads with expat services
3. FRENCH HNW INVESTMENT STYLE PREFERENCES
3.1. Wealth managers should highlight the time-saving benefits of their services
3.1.1. Over half of France’s HNW wealth is held in discretionary mandates
3.1.2. A lack of time and expertise drives demand for professional advice
3.1.3. France’s HNW investors place just over half of their managed wealth with their main wealth manager
3.2. French HNW investors’ lack of time is increasing demand for execution-only mandates
3.2.1. Demand is strongest for advisory mandates
3.2.2. Advisory mandates will remain the favored asset management service
3.2.3. A strong reluctance to give up control is driving demand for advisory mandates
3.2.4. French HNW investors who self-direct want exclusive control over some of their portfolio
4. UNDERSTANDING ASSET ALLOCATION TRENDS AMONG FRENCH HNW INDIVIDUALS
4.1. Alternatives will register the fastest increase over the next year
4.1.1. Equities continue to make up the largest segment of HNW portfolios
4.1.2. Equity investments constitute the largest proportion of the average French HNW portfolio
4.1.3. Asset diversification is the main driver for equities investments
4.1.4. Bond investments are lower in France than in the rest of Europe
4.1.5. Wealth managers expect bond holdings to decrease strongly
4.1.6. Cash and near-cash allocations are above the global average
4.1.7. Clients cite risk-aversion and future investment opportunities as drivers for allocations into deposits
4.1.8. Property constitutes a quarter of the typical HNW portfolio
4.1.9. Risk aversion is the main driver for property investments
4.1.10. Alternatives constitute a meager percentage of the typical HNW portfolio
4.1.11. Asset diversification is the leading driver for investments in alternatives
4.1.12. Commodities allocations are as low as the European average
4.1.13. Asset diversification is the leading driver of commodity investments
5. HNW PRODUCT AND SERVICE DEMAND
5.1. Wealth managers should lead with tax planning services
5.1.1. High taxation rates drive demand for planning services
5.1.2. Allen & Overy partners with advisors to increase their competitive advantage
5.1.3. Demand for all planning services is forecast to increase
5.1.4. Primonial grows its AUM by offering a multi-service proposition
6.1. Abbreviations and acronyms
6.2.3. Liquid assets
6.2.4. Mass affluent
6.3.1. 2016 Global Wealth Managers Survey
6.3.2. 2015 Global Wealth Managers Survey
List of Tables
Table 1: Production revenue by sector (€bn), 2000-15
Table 2: Net wealth tax rates
Table 3: Euro to US dollar exchange rate, December 31, 2015 and December 31, 2016
List of Figures
Figure 1: The bulk of HNW investors in France are males over the age of 50
Figure 2: First-generation entrepreneurship is the main source of wealth for France’s HNW investors
Figure 3: Property and real estate is the leading generator of French wealth
Figure 4: A quarter of HNW investors in France are CEOs
Figure 5: 7.2% of France’s HNW client base is made up of expats
Figure 6: Nearly 40% of Frances’s HNW expats are from the UK
Figure 7: Alexander Peter Wealth Management targets British expats
Figure 8: Over half of HNW assets are managed using discretionary mandates
Figure 9: A lack of time is the major driver of demand for wealth management services in France
Figure 10: The vast majority of France’s HNW investors use two or more advisors
Figure 11: HNW demand is particularly high for advisory services
Figure 12: Advisory asset management will experience the highest increase in demand
Figure 13: HNW investors in France are reluctant to relinquish control
Figure 14: Advisors should build strong relationships with their clients to offset self-directing trends
Figure 15: The average French HNW portfolio is relatively balanced
Figure 16: The majority of equity investments are held in funds
Figure 17: Equities growth will be driven by asset diversification and dividend income opportunities
Figure 18: Bonds are the third most important investment vehicle
Figure 19: Bond investments are forecast to decrease across the continent
Figure 20: Cash and near-cash allocations are higher in France than the rest of Europe
Figure 21: Risk aversion will drive cash and near-cash investment growth
Figure 22: Property funds are significantly more popular than direct investments
Figure 23: Property investments are forecast to increase further
Figure 24: Private equity funds are the most popular alternatives investment
Figure 25: The majority of industry experts expect alternative investments to increase
Figure 26: French HNW investors prefer to hold commodities directly
Figure 27: Asset diversification drives French HNW investment in commodities
Figure 28: Tax planning is the priority for France’s HNW investors
Figure 29: Allen & Overy advises wealth managers on tax matters
Figure 30: Financial planning will experience the highest increase in demand
Figure 31: Primonial offers a wide range of wealth management services