Wealth in Germany: Sizing the Market Opportunity 2017

Powered by

All the vital news, analysis, and commentary curated by our industry experts.

$3450

Germany’s economy looks set to continue its robust, but moderate growth. However, there are considerable political, economic, and financial uncertainties on the horizon that could significantly impact the country’s wealth market. With lower growth and return prospects, the role of wealth managers in a traditionally risk-averse market will become more challenging.

Wealth in Germany: Sizing the Market Opportunity analyzes the German wealth and retail savings and investments markets, with a focus on the HNW segment. The report is based on our proprietary datasets.

Specifically the report:
– Sizes the affluent market (both by number of individuals and value of their liquid assets) using GlobalData’s proprietary datasets
– Analyzes which asset classes are favored by German 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.
– Identifies key drivers and booking centers for offshore investments.

Scope

– Affluent individuals account for 20% of the German population, holding 74% of liquid assets. This wealth distribution is similar to other developed economies.

– A robust economic performance will continue to underpin growth in Germany’s overall retail savings and investments market, which is forecast to grow by an average of 2.9% a year to 2020. However, it is important to highlight the predicted slowdown in this mature and conservative market.

– Deposits dominate, accounting for 68% of balances. This reflects a habitual, persistent risk aversion that is forecast to remain, in spite of a 0% interest rate and rising inflation.

– Investor uncertainties surrounding domestic elections, Brexit, and the US agenda have significantly dampened stock market appetite. As a result, equities and mutual funds are forecast to grow by only 1.7% a year to 2020.

– Germany’s HNW individuals invest 22% of their assets outside traditional investments, with private equity and property proving popular.

– Offshore investments account for 10% of HNW individuals’ illiquid assets, distinctly below the global average. These investments are driven by the desire for better returns rather than tax efficiency.

Reasons to Buy

– Benchmark your share of the German 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 the penetration of affluent individuals in Germany.

– Evaluate your HNW proposition by understanding how the changing German tax systems will impact HNW clients.

– Review your offshore strategy by learning about HNW motivations for offshore investments and their preferred booking centers.

Table of Contents

EXECUTIVE SUMMARY

1.1. The German economy will remain stable, but the wealth sector is facing uncertain and challenging times

1.2. Key findings

1.3. Critical success factors

2 SIZING AND FORECASTING THE GERMAN WEALTH MARKET

2.1. The wealth market remains concentrated at the top end

2.1.1. Affluent individuals account for 20% of the total adult population

2.1.2. German affluent individuals hold 74% of liquid assets

3 DRIVERS OF GROWTH IN THE GERMAN WEALTH MARKET

3.1. Shifting investor sentiment and market uncertainties will take their toll on savings and investments

3.1.1. The relatively strong German economy will underpin growth in the savings and investments market

3.1.2. A strong bias towards deposits will continue to shape the German market

3.2. Deposits growth will increase over the forecast period

3.2.1. The ECB lowering the main interest rate to 0% reduced the appeal of deposits

3.2.2. Inflation has remained significantly below the ECB target of 2%, but is increasing

3.2.3. Germany's strong traditional preference for deposits and high-risk aversion will continue to drive growth

3.3. A late stock market rally in 2016 will not be enough to ease investor nerves over equities and mutual funds

3.3.1. In spite of volatility, a late Q4 rally meant the DAX recorded its fifth year of growth

3.3.2. The uncertain political, economic, and financial outlook has affected investor confidence

3.3.3. The Investment Tax Reform Act will impact this sector from 2018

3.4. Negative yields are deterring investors from the bond market

4 HNW INVESTMENT PREFERENCES

4.1. HNW individuals allocate 22% of their investible assets outside traditional investments

4.1.1. Alternatives account for just under half of non-traditional assets

4.1.2. Property is the second most popular non-traditional asset class

4.2. Offshore investments form a relatively small proportion of assets and are primarily driven by the desire for better returns

4.2.1. Only a small proportion of HNW wealth is invested offshore

4.2.2. The availability of better investment returns is the biggest driver of offshore investment

4.2.3. Switzerland and the US are the preferred offshore booking centers

4.2.4. The German government has taken numerous steps to tackle offshore tax evasion

4.2.5. Several key taxes are currently subject to increases or changes

5 APPENDIX

5.1. Abbreviations and acronyms

5.2. Supplementary data

5.3. Definitions

5.3.1. Affluent

5.3.2. Domicile

5.3.3. DTC

5.3.4. FATCA

5.3.5. HNW

5.3.6. Liquid assets

5.3.7. Mass affluent

5.3.8. Mass market

5.3.9. Onshore

5.3.10. Residency

5.3.11. Exchange of information

5.3.12. TIEAs

5.4. Methodology

5.4.1. GlobalData's 2016 Global Wealth Managers Survey

5.4.2. Global Wealth Model methodology

5.4.3. Global Retail Investments Analytics methodology

5.5. Bibliography

5.6. Further reading

Table

Table 1: German personal income tax rates for a single person, 2016

Table 2: Total German adult population by asset band (000s), 2011-15

Table 3: Total German adult population by asset band (000s), 2016e-20f

Table 4: Germany: onshore liquid assets by asset band ($bn), 2011-15

Table 5: Germany: onshore liquid assets by asset band ($bn), 2016e-20f

Table 6: Euro to US dollar exchange rate, December 31, 2015 and December 31, 2016

Figures

Figure 1: Affluent individuals account for 20% of the total adult population in Germany

Figure 2: Affluent individuals account for 74% of total liquid assets in Germany

Figure 3: Growth in Germany's retail savings and investments market will be more muted to 2020

Figure 4: The total retail savings and investments market is expected to remain strongly skewed towards deposits

Figure 5: Deposits dominate the retail savings and investments market, and will see the fastest growth to 2020

Figure 6: Retail deposits will outperform GDP growth to 2020

Figure 7: Germany's stock market has performed well since 2011

Figure 8: Mutual funds and equities remain volatile, with lower growth rates forecast

Figure 9: Bonds are forecast to perform below GDP growth

Figure 10: Private equity and property investments form the bulk of investments outside traditional asset classes for German HNW investors

Figure 11: German investors hold limited offshore assets

Figure 12: Better investment returns constitute the main driver of offshore investments for German HNW individuals

Figure 13: Most German offshore booking is performed in Switzerland and the US

Figure 14: Germany has signed TIEAs with many offshore centers globally

Frequently asked questions

Wealth in Germany: Sizing the Market Opportunity 2017 standard reports
Currency USD
$3,450

Can be used by individual purchaser only

$10,350

Can be shared globally by unlimited users within the purchasing corporation e.g. all employees of a single company


Undecided about purchasing this report?

Enquire Before Buying

Get in touch to find out about multi-purchase discounts

reportstore@globaldata.com
Tel +44 20 7947 2745

Every customer’s requirement is unique. With over 220,000 construction projects tracked, we can create a tailored dataset for you based on the types of projects you are looking for. Please get in touch with your specific requirements and we can send you a quote.

See what our customers are saying

“The GlobalData platform is our go-to tool for intelligence services. GlobalData provides an easy way to access comprehensive intelligence data around multiple sectors, which essentially makes it a one-for-all intelligence platform, for tendering and approaching customers.

GlobalData is very customer orientated, with a high degree of personalised services, which benefits everyday use. The highly detailed project intelligence and forecast reports can be utilised across multiple departments and workflow scopes, from operational to strategic level, and often support strategic decisions. GlobalData Analytics and visualisation solutions has contributed positively when preparing management presentations and strategic papers.”

Business Intelligence & Marketing Manager, SAL Heavy Lift

“COVID-19 has caused significant interference to our business and the COVID-19 intelligence from GlobalData has helped us reach better decisions around strategy. These two highlights have helped enormously to understand the projections into the future concerning our business units, we also utilise the project database to source new projects for Liebherr-Werk to use as an additional source to pitch for new business.”

Market Analyst & Management, Liebherr-Werk

Your daily news has saved me a lot of time and keeps me up-to-date with what is happening in the market, I like that you almost always have a link to the source origin. We also use your market data in our Strategic Business Process to support our business decisions. By having everything in one place on the Intelligence Center it has saved me a lot of time versus looking on different sources, the alert function also helps with this.

Head of Key Accounts, Saab AB

Having used several other market research companies, I find that GlobalData manages to provide that ‘difficult-to-get’ market data that others can’t, as well as very diverse and complete consumer surveys.

Marketing Intelligence Manager, Portugal Foods

Our experience with GlobalData has been very good, from the platform itself to the people. I find that the analysts and the account team have a high level of customer focus and responsiveness and therefore I can always rely on. The platform is more holistic than other providers. It is convenient and almost like a one stop shop. The pricing suite is highly competitive and value for our organisation.

I like reports that inform new segments such as the analysis on generation Z, millennials, the impact of COVID 19 to our banking customers and their new channel habits. Secondly the specialist insight on affluent sector significantly increases our understanding about this group of customers. The combination of those give us depth and breadth of the evolving market.

I’m in the business of answering and helping people make decisions so with the intelligence center I can do that, effectively and efficiently. I can share quickly key insights that answer and satisfy our country stakeholders by giving them many quality studies and primary research about competitive landscape beyond the outlook of our bank. It helps me be seen as an advisory partner and that makes a big difference. A big benefit of our subscription is that no one holds the whole data and because it allows so many people, so many different parts of our organisation have access, it enables all teams to have the same level of knowledge and decision support.

Head of Customer Insight and Research, Standard Chartered

“I know that I can always rely on Globaldata’s work when I’m searching for the right consumer and market insights. I use Globaldata insights to understand the changing market & consumer landscape and help create better taste & wellbeing solutions for our customers in food, beverage and healthcare industries.

Globaldata has the right data and the reports are of very high quality compared to your competitors. Globaldata not only has overall market sizes & consumer insights on food & beverages but also provides insights at the ingredient & flavour level. That is key for B2B companies like Givaudan. This way we understand our customers’ business and also gain insight to our unique industry”

Head of Consumer Sensory Insights, Givaudan

GlobalData provides a great range of information and reports on various sectors that is highly relevant, timely, easy to access and utilise.  The reports and data dashboards help engagement with clients; they provide valuable industry and market insights that can enrich client conversations and can help in the shaping of value propositions. Moreover, using GlobalData products has helped increase my knowledge of the finance sector, the players within it, and the general threats and opportunities.

I find the consumer surveys that are carried out to be extremely beneficial and not something I have seen anywhere else. They provided an insightful view of why and which consumers take (or don’t) particular financial products. This can help shape conversations with clients to ensure they make the right strategic decisions for their business.

One of the challenges I have found is that data in the payments space is often piecemeal. With GD all of the data I need is in one place, but it also comes with additional market reports that provide useful extra context and information. Having the ability to set-up alerts on relevant movements in the industry, be it competitors or customers, and have them emailed directly to me, ensures I get early sight of industry activity and don’t have to search for news.

Senior Account Manager, TSYS
Financial Services
New
Worldline - Competitor Profile
$350 | March 2024
Financial Services
New
Global Risk Report Quarterly Update - Q1 2024
$1,100 | April 2024
Go even deeper with GlobalData Intelligence Center

Every Company Report we produce is powered by the GlobalData Intelligence Center.

Subscribing to our intelligence platform means you can monitor developments at Wealth in Germany: Sizing the Market Opportunity 2017 in real time.

  • Access a live Wealth in Germany: Sizing the Market Opportunity 2017 dashboard for 12 months, with up-to-the-minute insights.
  • Fuel your decision making with real-time deal coverage and media activity.
  • Turn insights on financials, deals, products and pipelines into powerful agents of commercial advantage.