United Kingdom (UK) Wealth Management – High Net Worth (HNW) Investors 2021

Pages: 35 Published: February 17, 2022 Report Code: GDFS0566CI

Most HNW individuals in the UK gained their wealth through earned income and are showing strong demand for planning and ESG-based products. However, a multi-service proposition is a must as demand is expected to increase across all planning services and mandates, especially robo-advisory services. Wealth managers need to adjust their current service proposition to better serve the post-Brexit environment, which will continue to affect investments.

The UK wealth management report sizes the opportunity within the UK wealth market and analyzes the investment preferences, service requirements, and portfolio allocations of UK HNW investors. The report is based on GlobalData’s proprietary global Wealth Managers Survey.

What are the market dynamics in the UK Wealth Management industry?

The UK has been one of the countries worst-hit by the outbreak of the COVID-19 pandemic, resulting in a widespread disturbance in the performance of certain sectors in the country. The financial services sector is the leading wealth generator in the UK. The wealth-creating potential of the financial world is nothing new, reflecting its outsized role in the UK economy generally, with plentiful high salaries being offered for positions across this industry, from banking to insurance.

The tech and telecommunications sector is the second largest contributor to HNW wealth and was one of the sectors that remained resilient in the face of the pandemic-induced crisis. This sector highly benefited from increased internet usage and a greater need for connectivity amid the crisis due to consumers’ shift to working from home and online purchasing. Wealth managers should prepare for more HNW wealth to be generated from this sector, with companies well placed to benefit from increased digitization across the entire economy. The healthcare sector, which is the third largest contributor to HNW wealth, experienced substantial growth in 2021, with rising demand for medicine, medical equipment, and personal protective equipment. In July 2021, the UK government launched the UK Life Sciences Vision, a 10-year plan to address challenges and spur innovations in the healthcare sector, which should therefore positively contribute to the performance of this sector over the coming years.

What are the various investment services for HNW investors in the UK wealth management market?

Advisory asset management, automated investment services, discretionary asset management, and execution -only asset management, are the various investment services for HNW investors in the UK wealth management market.

UK HNW investors are becoming increasingly hands-on with their investments during the pandemic and recession. Wealth managers need to accommodate this growing desire for control and ensure relationship managers are providing the necessary reassurance to retain faith in the expertise of the investment team. Automated investment services have evidently found their place among the other mandates, with current demand exceeding execution-only services and the expected increase in demand being the highest.

The UK wealth management market, by investment service

The UK wealth management market, by investment service

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

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

The 2020 stock market crash, also dubbed the Coronavirus Crash, has caused a deep dent in the performance of the country’s stock market, thereby negatively affecting both wealth management firms and their clients’ wealth in the UK. With the pandemic still ongoing, investor confidence remains low and the country’s flagship index was unable to reach its pre-COVID levels even in 2021. However, UK HNW individuals are avid equity investors and allocations remain above the regional average.

The UK wealth management market, by wealth allocation

The UK wealth management market, by wealth allocation

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

Equity, cash and near-cash products, bonds, property, alternatives, and commodities are the major asset classes of offshore investment for HNW investors in the UK wealth management market.

Overseas commodities are currently a big draw for UK investors. Strong demand for commodities can be seen as a natural response to market volatility during the COVID-19 crisis, as commodities provide better diversification and hedging opportunities. Investing in properties abroad also provides good hedging opportunities against inflation. In addition, the benefits of appreciating value, rental income, and low mortgage rates encourage offshore investors to opt for direct investment alongside funds and real estate investment trusts.

The UK wealth management market, by offshore investment

The UK wealth management market, by offshore investment

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Which are the major companies in the UK wealth management market?

Citibank and Canaccord Genuity are the major companies in the UK wealth management market.

Market report scope

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
Investment services Advisory Asset Management, Automated Investment Services, Discretionary Asset Management, and Execution-Only Asset Management
Key companies Citibank and Canaccord Genuity

Scope

  • Expats constitute 18.9% of the local HNW population. They represent an attractive target market thanks to their more complex service requirements.
  • UK HNW individuals spread their investments almost in line with the European average, with equities, cash and near-cash, and property dominating.
  • The average UK HNW investor offshores 42.6% of their wealth abroad. While this proportion is expected to strongly increase over the next 12 months, the rise is expected to be less pronounced than in the wider region.

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 current and future demand for different asset classes among HNW individuals.
  • Develop your service proposition to match the demand expressed by UK HNW investors and react proactively to forecast changes in demand.

Key Players

Citibank
Canaccord Genuity

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 for HNW investors in the UK wealth management market.

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

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

Citibank, Canaccord Genuity are the major companies in the wealth management market in UK.

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