Offshore Wealth Management Market Analysis by Investor Drivers and Motivations

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Reasons to buy the Offshore Wealth Management market report:

  • Gain a comprehensive understanding of the offshore wealth management market.
  • Gain insights into offshore investment preferences across multiple jurisdictions and wealth tiers to assess investors’ motivation to offshore wealth.
  • Identify the key factors driving the HNW offshore investors.
  • Learn the key takeaways from a comprehensive analysis of the offshore wealth management market.

How is our report unique from other reports in the market?

Use this report to:

  • Understand growth sectors within the non-resident investor segment in recent years.
  • Gain insight into the drivers behind retail and HNW investor offshoring.
  • Forecast HNW demand for offshore wealth management in all key markets.
  • Learn the size of key market segments within the offshore investment market.
  • Understand how best to promote your offshore proposition.
  • Review and adjust your proposition based on a detailed understanding of the different segments that make up the offshore investment market.

We recommend this valuable source of information to anyone involved in:

  • ​​​Bankers/Fintech Companies/Lending Companies
  • ​Digital Payment companies/Insurance Companies/​Retail Banks
  • Financial Service Technology Leaders and Startups
  • Business Development and Market Intelligence
  • Investment Analysts and Portfolio Managers
  • Professional Services – Investment Banks, PE/VC firms
  • M&A/Investment, Management Consultants, and Consulting Firms

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Offshore Wealth Management Market Report Overview

Globally, offshore investment penetration increases from 10% among mass market investors to 45% among the mass affluent. As a result, mass market investors are unattractive to offshore wealth managers.

Proportion of Segment With Offshore Holdings, 2023 (%)

Proportion of Segment With Offshore Holdings

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This offshore wealth management market report draws on GlobalData’s proprietary surveys to analyze the drivers behind offshore investments. The report examines and contrasts offshore investment preferences across multiple jurisdictions and wealth tiers, providing readers with an in-depth understanding of what motivates investors to offshore wealth.

Key Investment Drivers ·       Business Interests

·       Better Returns

·       Better Range of Investments

·       General Geographic Diversification

·       Tax Efficiency

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Offshore Wealth Management - The HNW Offshore Portfolio

The average HNW offshore investment portfolio is well-diversified. With a narrow lead over equities, real estate accounts for the largest component of the average global HNW offshore portfolio. The diversification opportunities and tax efficiencies are critical drivers. Some of the other investment preferences are alternatives, cash and near cash, bonds, and commodities.

Home market bias and an expectation of better returns abroad are key drivers of equity investments, which constitute a fifth of HNW offshore wealth. Looking at regional stock market performances, there have been notable differences in recent years. The US outshone other jurisdictions over the past few years. Europe is also drawing in more offshore stock market investors thanks to strong market performance and a wider range of value stocks, which appeal to the older HNW segment.

HNW Onshore and Offshore Portfolios by Region, 2023 (%)

HNW Onshore and Offshore Portfolios by Region, 2023 (%)

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Offshore Wealth Management - Offshore Drivers

A wide range of considerations drive HNW investors to channel offshore investments including business interests, better returns, better range of investments, general geographic diversification, and tax efficiency. Business interests are the number one reason HNW investors hold wealth offshore.

Globally, there are more than 3 million HNW entrepreneurs (including both entrepreneurs and individuals who have inherited and continued a business). This equates to more than 20% of the global HNW population. As a result, entrepreneurs are a key target market for most of the world’s wealth management giants. The likes of BNP Paribas, UBS, and Julius Baer have declared entrepreneurs a key segment.

Global HNW Offshore Investment Drivers, 2023 (%)

Global HNW Offshore Investment Drivers, 2023 (%)

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Key Highlights

  • At a global level, over 40% of global HNW wealth is booked offshore.
  • Globally, offshore investment penetration increases among mass market investors to mass affluent.
  • Real estate accounts for the largest component of the average global HNW offshore portfolio, driven by diversification opportunities and tax efficiencies.
  • While return on investment considerations are important across wealth segments, they are notably more important among retail (i.e., non-HNW) investors.

DBS
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Table of Contents

Offshore Marker Overview

The HNW Offshore Portfolio

Offshore Drivers

Key Takeaways

Appendix

Table

List of Tables

Table 1: Non-resident assets growth rates, 2020-21

Table 2: Selected markets rates of offshore investment in the general population, 2020-21

Figures

List of Figures

Figure 1: Offshore assets surged early in the pandemic as investors sought safe havens early on and then sought out investment opportunities

Figure 2: The tidal wave of non-resident wealth into Europe is receding

Figure 3: The central roles of New York and London remain even after wealth drains from elsewhere in the regions

Figure 4: Asia-Pacific is once again back to driving growth in the offshore market

Figure 5: Negative macroeconomic ‘push’ factors are driving the increase in HNW offshore investment

Figure 6: Australian investors who are keen to directly own a trendy tech stock are being targeting by moomoo

Figure 7: Anonymity and tax were largely absent as drivers for offshoring during the pandemic

Figure 8: Banks significantly increased their hiring for regulation and compliance in the early months of 2022

Figure 9: Regulation-related job hiring from Dec 14, 2021 to March 14, 2022 compared to previous quarter

Figure 10: The North American market is well provisioned with offshore services

Figure 11: Currency risk has grown over the last 10 years and is heightened in times of crisis

Figure 12: Most private wealth firms in the US and Canada can connect clients to offshore partners

Figure 13: Citibank’s offshore investment options cover multiple asset classes

Figure 14: ESG is just as important as high returns in markets that Standard Chartered has presence in

Figure 15: Standard Chartered’s international service caters to both liquid and illiquid offshore investments

Figure 16: HSBC Premier India services focus on international privileges and NRIs

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