Wealth Management in the Nordic Region 2008

Transcription

1 Brochure More information from Wealth Management in the Nordic Region 2008 Description: This report focuses on the onshore liquid wealth of affluent individuals in Denmark, Finland, Norway and Sweden, and the liquid assets they hold, sizing, segmenting and forecasting the affluent population across 10 liquid asset bands. It also presents detailed HNW demographic and decision trigger analysis, and strategies to drive revenue growth based on large scale survey of the main players. Scope - HNW demographic and attitudinal attributes based on our Wealth Management Market Leaders Survey Sizes, segments and forecasts the number of affluent invididuals across 10 liquid asset bands from EUR50k in Denmark, Finland, Norwy and Sweden - Extensive primary research from 20 wealth management companies highlights thier strategies for revenue growth, acquiring and keeping clients - Aggregated data covers onshore liquid assets including cash and deposits, mutual funds, direct investment in equities and direct investment in bonds. Highlights of this title The Nordic HNW client is 50 years old, made his wealth through entrepreneurship or employment earnings, invests heavily in equities, but also maintains significant fixed income and cash holdings. He is also increasingly interested in alternative investments. Growth in the Nordic regions wealth is attributed, in part, to growth in personal disposable income as well as solid returns on equity and fixed income investments. Nevertheless, increasing levels of personal debt are likely to temper growth in liquid assets of Nordic investors over the next few years. Nordic wealth managers have a medium-term customer base, although three quarters of players are forced to share their customer base with at least one other bank. They are intent on boosting their revenue by primarily focusing on improving investment performance, but augmentation of their product and service ranges is also an important strategy. Key reasons to purchase this title - Understand the HNW populations investments by sector and geography, appetite for risk, and reasons for choosing/leaving their wealth service - Assess market attractiveness by reviewing size and growth forecasts for the potential wealthy client base through Assess the threats and opportunities for wealth managers by understanding how peers are planning to grow revenues, acquire and keep clients Contents: Overview 1 Catalyst 1 Summary 1 Methodology 1 Executive Summary 2 Strong investment performance and rising compensation has driven wealth in the Nordic region 2

2 Nordic HNW customers are primarily concerned about financing needs and inheritance planning, but are prepared to take risks and entertain new ideas 2 Nordic wealth managers have medium-term relationships with their clients, and expect to drive revenue growth by improving investment performance and strengthening their product ranges 2 4 Table of tables 5 The Nordic regions WEALTH 6 Solid growth in wages and investment returns are driving the growth in the Nordic regions wealthy population, but rising debt is a threat 6 Wage increases are being undermined by rising debt 6 Affluent investors in the Nordic region have benefited strongly from equity investment returns 7 Bond yields and deposit rates have added slowly but steadily to Nordic investors portfolios 8 The Nordic regions onshore investment is gradually repositioning towards safe havens 9 Nordic investors increased their allocation to deposits by 13% in Wealth in the Nordic region is growing slowly 10 The Nordic affluent population has grown despite low savings rates and slowing investment returns in Outlook for Nordic regions wealthy population in will be characterized by struggling economies worldwide 11 Data Tables 13 The Nordic HIGH NET WORTH INVESTOR 21 Nordic HNWs are younger than their average European counterparts 21 There is a relatively high proportion of under-30s in the Nordic regions HNW population compared to Europe 21 Wealth management service implication: build propositions to capture younger clients 22 In keeping with the European average, Nordic wealth comes primarily from entrepreneurship, followed by earned income 23 Norways entrepreneurial population will grow by 8.3% compounded annually to Wealth management service implication: dedicated client management teams for entrepreneurs and professionals 24 Innovative example from the UK: Wesleyan Assurance develops specialist staff to target doctors and dentists 25 Nordic HNWs hold well-diversified portfolios 25 Wealth management service implication: promote alternative investments as an option for HNWs who are concerned about market volatility 27 Innovative example from the UK: Harewood Solutions launches a fund to take advantage of anticipated property gains 27 Nordic HNW investment will shift towards cash 27 Nordic HNWs are more likely to invest abroad than their peers across the rest of Europe 29 Wealth management service implication: private banks and wealth managers can respond to client demand by expanding their range of investments 30 Innovative example from the UK: Focus Capital develops an emerging market multi-strategy fund 30 Nordic HNW customers are primarily concerned about financing needs and inheritance planning, but are prepared to take risks and entertain new ideas 31 Nordic HNW investors want financing solutions 31 Wealth management service implication: offer a comprehensive range of financing solutions 32 Innovative example from the Netherlands: Fortis Private Banking segments clients on the basis of their liabilities 32 Nordic HNWs demonstrate above-average risk tolerance and are more open to new investment ideas 32 Nordic HNWs are demonstrating the strongest demand for emerging market equities or funds and residential property 34 Wealth management service implication: offer innovative investment opportunities in emerging markets and real estate 36 Innovative example from France: Assetz allows investors to have their cake and eat it too 36 Nordic HNWs are less financially sophisticated than the average European HNW 36 While face-to-face relationship management is less important to HNWs in the Nordic region today, personal recommendations are critical 38 Wealth management service implication: providers can build business through customer advocacy 39 HNW Nordic investors are more loyal to their wealth manager 39 The Nordic Wealth Managers view 42 Wealth managers in the Nordic region have weaker relationships with their clients compared to Europe as a whole 42 Nordic wealth managers have medium-term relationships with their clients, and generally have to share

3 them with at least one other bank 42 Nordic wealth managers expect to drive revenue growth by improving investment performance and strengthening their product ranges 45 Wealth managers will focus less on winning new clients and more on improving returns and product ranges 45 Increasing face-to-face contact and financial planning services will be the most effective means employed to increase share of wallet 46 Socially responsible funds will offer the greatest business potential for Nordic wealth managers in the coming years 48 The key to attracting clients will be personal relationships and service quality 51 Nordic wealth managers can best attract new clients by leveraging personal relationships and ensuring high standards of service 51 Wealth managers own clients are the best route to new clients 53 The key to keeping clients will be providing them with proactive advice and keeping their RMs happy 55 Despite acknowledging the need to improve their advice and guard against defecting RMs, wealth managers in the Nordic region are focusing on minimizing errors as a client retention strategy 56 APPENDIX 58 The drivers of growth in the wealthy population 58 Nominal income growth (combined with inflation, changes in GDP by sector, household savings rates and debt levels) 58 Investment returns (market capitalization, interest rates and bond yields) 58 The following measures are not, in themselves, drivers of wealthy population growth 58 Market capitalization 58 GDP 58 The following measures are not drivers of wealthy population growth except under very restricted circumstances 59 Primary residence value growth 59 Inheritance 59 Methodology 59 Wealth Management Market Leaders Survey Global Wealth Model 59 The UK sub-model 59 Global sub-model (for all other countries) 60 Forecasting methodology 60 Continuous refinement to the understanding of liquid wealth distribution 60 Datamonitors wealth numbers compared with other wealth numbers 60 Bibliography 61 Definitions 61 Western Europe 61 Further reading 61 Ask the analyst 62 Datamonitor consulting 62 Disclaimer 62 List of Tables Table 1: Number of affluent individuals in Denmark by liquid asset band, 000s, Table 2: Number of affluent individuals in Finland by liquid asset band, 000s, Table 3: Number of affluent individuals in Norway by liquid asset band, 000s, Table 4: Number of affluent individuals in Sweden by liquid asset band, 000s, Table 5: Aggregate onshore liquid assets of affluent individuals in Denmark by liquid asset band, bn, Table 6: Aggregate onshore liquid assets of affluent individuals in Finland by liquid asset band, bn, Table 7: Aggregate onshore liquid assets of affluent individuals in Norway by liquid asset band, bn, Table 8: Aggregate onshore liquid assets of affluent individuals in Sweden by liquid asset band, bn, Table 9: Number of affluent individuals in Denmark by liquid asset band, 000s, Table 10: Number of affluent individuals in Finland by liquid asset band, 000s, Table 11: Number of affluent individuals in Norway by liquid asset band, 000s, Table 12: Number of affluent individuals in Sweden by liquid asset band, 000s, Table 13: Aggregate onshore liquid assets of affluent individuals in Denmark by liquid asset band, bn, Table 14: Aggregate onshore liquid assets of affluent individuals in Finland by liquid asset band, bn, 2008-

4 12 19 Table 15: Aggregate onshore liquid assets of affluent individuals in Norway by liquid asset band, bn, Table 16: Aggregate onshore liquid assets of affluent individuals in Sweden by liquid asset band, bn, Table 17: "What percentage of the HNW customer base in the Nordic countries is in each age band?" 22 Table 18: "What percentage of the HNW customer base in the Nordic countries accumulated its wealth through the following sources?" 24 Table 19: "What percentage of HNW customers portfolios in the Nordic countries is allocated to the following products?" 27 Table 20: HNW customers portfolio allocation now versus in two years time 28 Table 21: "What percentage of HNW customers portfolio in the Nordic countries is allocated to the following regions?" 30 Table 22: "What are HNW customers in the Nordic countries most interested in today?" 32 Table 23: "Please rate high net worth clients in the Nordic countries on a scale of one to four in terms of the following risk-related variables" 33 Table 24: "For which investment opportunities is there a lot of demand from HNWs in the Nordic countries?" 36 Table 25: "Please rate high net worth clients in the Nordic countries on a scale of one to four on the following variables related to financial sophistication" 37 Table 26: "Please rate high net worth clients in Spain on a scale of one to four on the following relationshiprelated variables" 39 Table 27: "Please rate high net worth clients in the Nordic countries on a scale of one to four on the following loyalty-related variables" 40 Table 28: "Please rate high net worth clients in the Nordic region on a scale of one to four on the following loyalty-related variables" 41 Table 29: "How long has your client base in the Nordic countries been with you, on average?" 43 Table 30: "How many wealth managers do HNW customers in the Nordic countries have on average?" 44 Table 31: "What will most determine revenue growth in the Nordics wealth management market in the next two years?" 46 Table 32: "What is the most effective means of increasing wealthy clients share of wallet in the Nordic region?" 47 Table 33: "How much business potential do the following product areas have among wealthy clients in the Nordic region for the next two years?" 49 Table 34: "From the product areas just mentioned, which three will wealth managers focus most resources on in the next two years?" 51 Table 35: "What are the key influences that determine a clients choice of wealth management service in the Nordic countries?" 52 Table 36: "What are the most effective wealth management customer acquisition techniques in the Nordic countries?" 54 Table 37: "What are the most likely reasons for clients in the Nordic countries to leave a wealth management service?" 56 Table 38: "What is the best way to retain wealthy clients in the Nordic countries?" 57 List of Figures Figure 1: Rising debt and declining savings rates have tempered growth in liquid assets 7 Figure 2: Growth in the Nordic and Norway exchanges exceeds that of Western Europe 8 Figure 3: Since 2006, bond yields in the region have increased 9 Figure 4: Nordic investors shifted strongly towards safe havens in Figure 5: Nordic affluent population growth slowed in 2007 as market conditions took their toll 11 Figure 6: After declining in 2008 and 2009, the Nordic affluent population will grow again, to reach 4.3 million by Figure 7: The age band accounts for the greatest share of HNW customers in the Nordic region at 39% 22 Figure 8: Business/entrepreneurship is the main source of wealth in the Nordic countries, accounting for 38% of all HNWs liquid assets 24 Figure 9: 31% of HNW portfolios in the Nordic countries are invested in equities 26 Figure 10: In the Nordic region, over the next two years HNW customers will increasingly look to the "cash or deposits" category, which will grow its share of their portfolios from 15% to 24% 28 Figure 11: HNW investors in the Nordic countries have 55% of their portfolios invested in Europe 29 Figure 12: Financing needs represent a key priority for Nordic HNWs 31 Figure 13: HNW investors in the Nordic countries have a higher level of openness to risk and innovation than the average European HNW investor 33 Figure 14: Direct investment in residential property is the investment opportunity most in demand from

5 HNW clients in the Nordic countries 35 Figure 15: HNW investors in the Nordic countries are less financially sophisticated than the average European HNW investor 37 Figure 16: HNW investors in the Nordic countries place less emphasis on provider relationships than the average European HNW investor 38 Figure 17: HNW investors in the Nordic countries are slightly more loyal than their European peers 40 Figure 18: Clients are demanding more face-to-face contact with their wealth manager now than two years ago in the Nordic countries 41 Figure 19: 51% of Nordic wealth managers have had their client relationships for more than five years on average 43 Figure 20: 27% of HNW investors in the Nordic countries have just one wealth manager 44 Figure 21: Improving investment performance will be the key driver of revenue growth in the next two years for wealth managers in the Nordic countries 45 Figure 22: Offering financial planning is the most effective means of increasing share of HNW wallet in the Nordic region 47 Figure 23: Socially responsible funds have the greatest business potential for wealth managers in the Nordic region for the next two years 48 Figure 24: 50% of wealth managers in the Nordic countries are planning to focus resources on traditional investments and alternative investments over the next two years 50 Figure 25: Personal relationship and quality of service are the primary influences on a clients choice of wealth manager in the Nordic countries 52 Figure 26: Referrals from existing clients are the most effective customer acquisition technique for wealth managers in the Nordic countries 54 Figure 27: Lack of proactive advice is the most likely reason for clients to leave a wealth manager in the Nordic countries 55 Figure 28: Nordic wealth managers believe that resolving all problems quickly and completely is the most effective means of retaining their HNW customers 57 Ordering: Order Online - Order by Fax - using the form below Order by Post - print the order form below and send to Research and Markets, Guinness Centre, Taylors Lane, Dublin 8, Ireland.

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