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Germany Wealth Management – High Net Worth (HNW) Investors 2022

Germany wealth management market report sizes the opportunity within Germany’s wealth market and analyzes the investment preferences, service requirements, and portfolio allocations of the country’s HNW investors.

What are the market dynamics in Germany wealth management market for HNW investors?

German HNW individuals have made their fortunes predominantly through earned income and entrepreneurship. The latter is largely due to the importance of privately-owned Mittelstand companies in the economy. Entrepreneurial income, although currently accounts for a small proportion, is gradually becoming a growing source of wealth generation for the German HNW individuals. Despite the COVID-19 pandemic, the German startup ecosystem remained resilient. According to the data published by the Statistisches Bundesamt, the number of startups registered in Germany increased in 2021 as compared to that in 2020. Many new entrepreneurs are unlikely to qualify as HNW yet but fall into the mass affluent category. However, supporting these entrepreneurs early one, before they amass their fortunes is likely to create goodwill early on and build lasting relationships before competitors can.

Deutsche Bank Wealth Management’ NextGen app allows users to network and exchange information. Access to the app is by invitation-only for NextGen alumni around the globe. Users have to set up an individual profile, detailing their entrepreneurial background, personal interests and expertise, and then are able to connect with each and exchange information. Users can also access insights and other content provided by Deutsche bank. The bank’s business and technology teams in the US and Bucharest co-developed the app. The app has been made available to clients from more than 20 countries as part of the bank’s Next Generation program.

What are the key investment preferences for HNW investors in Germany wealth management market?

The key investment preferences in Germany wealth management market are advisory asset management, automated investment services, discretionary asset management, and execution-only asset management.

While advisory mandates dominate in terms of HNW assets under management (AUM) allocated, current demand is distributed relatively equally across different types of mandates, highlighting the importance of a multi-asset management strategy. However, most striking is the strong demand for automated investment services. HNW investors are increasingly attracted to the more affordable approach offered by robo-advisory options.

Germany wealth management market, by key investment preferences

The German wealth management market, by key investment preferences

For more key investment preference insights, download a free sample

What are the key reasons for expatriation for HNW investors in Germany wealth management market?

The key reasons for expatriation in Germany wealth management market include job transfer, retirement, business start-up, tax efficiencies, better opportunities for children, better lifestyle conditions, and political/economic instability.

Most important drivers of expatriation to Germany are better lifestyle conditions, followed by better opportunities for children. IamExpat media ranked Germany as the 15th best place to live in for expats in its 2020 survey. Providers eager to tap into the potentially lucrative expat opportunity should ensure that broad marketing and prospecting communications leverage these prominent motivators. In addition to lifestyle conditions, wealth managers need to highlight the portfolio benefit and value derived from a well-structured, tax-optimized investment portfolio. This is the first step in demonstrating an empathetic connection with HNW individuals, who are likely to adopt a different mindset and be driven by different factors when choosing any kind of financial provider (compared to an average domestic affluent German individual).

Germany wealth management market, by key reasons for expatriation

The German wealth management market, by key reasons for expatriation

For more key expatriation reason insights, download a free sample

What are the major asset classes of wealth allocation for HNW investors in Germany wealth management market?

Equity, cash and near cash, bonds, property, alternatives and commodities are the major asset classes of wealth allocation in Germany’s wealth management market.

The German HNW portfolio remains skewed towards equities and bonds, which together constitute a reasonable percent of HNW wealth. Indeed, fixed income products account for the highest proportion – a long-standing trend characterizing the German HNW market. However, cash and near-cash holdings are forecast to experience the most pronounced increase in demand over the next year, and wealth managers will have to work hard to convince investors of the benefits of fee-bearing investments.

Germany wealth management market, by major asset classes of wealth allocation

The German wealth management market, by major asset classes of wealth allocation

For more major asset classes of wealth allocation insights, download a free sample

What are the major asset classes of offshore investment for HNW investors in Germany wealth management market?

The major asset classes of offshore investment in Germany wealth management market include equity, cash and near-cash products, bonds, property, alternatives, and commodities.

Commodities and alternative investments are also preferred asset classes for offshore investment; this is a natural response to market volatility, as many commodities are prized for their hedging or uncorrelated returns. As German HNW investors value more sophisticated investments, a professional wealth manager should provide a wide range of commodity investment solutions to its clients, in order to offer better diversified and hedging opportunities.

Germany wealth management market, by major asset classes of offshore investment

The German wealth management market, by major asset classes of offshore investment

For more major asset classes of offshore investment insights, download a free sample

Who are the key players in Germany wealth management market?

The key players in Germany wealth management market include AllBright Foundation and Deutsche Bank.

Market report scope

Important drivers for expatriation Job transfer, retirement, business start-up, tax efficiencies, better opportunities for children, better lifestyle conditions, and political/economic instability
Key reasons for expatriation Job Transfer, Retirement, Business Start-Up, Tax Efficiencies, Better Opportunities For Children, Better Lifestyle Conditions, and Political/Economic Instability
Major asset classes of wealth allocation Equity, cash and near cash, bonds, property, alternatives, and commodities
Major asset classes of offshore investment Equity, cash and near cash, bonds, property, alternatives, and commodities
Key Investment services Advisory asset management, automated investment services, discretionary asset management, and execution -only asset management
Key players AllBright Foundation and Deutsche Bank

Scope

  • Expats represent an attractive target market thanks to their more complex service requirements.
  • The market for robo-advisory services is growing rapidly in the country’s HNW space.
  • German HNW individuals spread their investments in line with the European average, with bonds, equities, and property dominating.

Reasons to Buy

  • Develop and enhance your client targeting strategies using our data on HNW profiles and sources of wealth.
  • Enhance your marketing strategies and capture new clients using insights from our data on HNW investors’ asset management style preferences.
  • Tailor your investment product portfolio to match the current and future demand for different asset classes among HNW individuals.
  • Develop your service proposition to match the demand expressed by German HNW investors and react proactively to forecasted changes in demand.

Key Players

AllBright Foundation

Deutsche Bank

Table of Contents

Table of Contents

Demographics

Expats

Investment Style Preferences

Asset Allocation Preferences

Offshore Investment Preferences

Products and Services

Appendix

Frequently Asked Questions

Advisory asset management, automated investment services, discretionary asset management, and execution-only asset management are the various investment services in the German wealth management market.

Job transfer, retirement, business start-up, tax efficiencies, better opportunities for children, better lifestyle conditions, and political/economic instability are the key reasons for expatriation in the German wealth management market.

Equity, cash and near cash, bonds, property, alternatives and commodities are the major asset classes of wealth allocation in the German wealth management market.

Equity, cash and near cash products, bonds, property, alternatives, and commodities are the major asset classes of offshore investment in the German wealth management market.

AIA and DBS are the key players in the German wealth management market.

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