Wealth in Poland: Sizing the Market Opportunity

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Poland is an emerging economy and has a relatively short history of economic freedom and capital markets. As a result, the retail savings and investments market is very much skewed towards deposits. However, the value of onshore liquid assets held by Polish residents has been growing fast. The HNW population remains tiny, but at the same time is growing its wealth at the fastest pace. With their changing preferences and growing interest in offshore investments, Polish billionaires are a lucrative target for private banks and wealth managers.

Scope

• Affluent individuals, who account for only 3.2% of the overall population, hold 83.8% of total liquid assets in Poland.

• Similarly to other Central and Eastern European markets, Polish retail savings and investments are allocated mainly to deposits, which comprise 81.8% of the total market.

• Despite historically low interest rates, Polish retail investors have not turned significantly to equities or mutual funds, as since the financial crisis they have tended to avoid risky asset classes.

• Polish HNW individuals allocate around 20% of their portfolios in less liquid investments, showing a strong preference towards property.

• The proportion of the HNW portfolio held offshore has doubled in Poland since 2012. Currently 24% of HNW assets are held abroad, primarily in search of better investment opportunities and tax efficiency.

Reasons to Buy

Benchmark your share of the Polish wealth market against the current market size.

Forecast your future growth prospects using our projections for the market to 2019.

Identify your most promising client segment by analyzing penetration of affluent individuals in Poland.

Evaluate your HNW proposition by understanding how low interest rates and stock market volatility affect HNW clients’ preferences.

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

Bank Guarantee Fund
SK Bank
Warsaw Stock Exchange

Table of Contents

EXECUTIVE SUMMARY

The Polish wealth market is set to grow at annual rate exceeding 5%

Key findings

Critical success factors

SIZING AND FORECASTING THE POLISH WEALTH MARKET

Affluent individuals in Poland account for

3.2% of the total adult population

A negligible proportion of affluent individuals in Poland are HNW

Polish HNW individuals hold

26.3% of the country's onshore wealth

DRIVERS OF GROWTH IN THE POLISH WEALTH MARKET

The Polish retail savings and investments market will grow steadily

The value of total savings and investments in Poland will increase by more than 5% per year

Deposits account for

81.8% of the Polish savings and investments market

Retail deposits will continue to outperform real GDP

Interest rates in Poland are at a historical low

Equities and mutual fund holdings are driven by stock market performance

The banking sector's problems are having an impact on the Polish stock market

Equities and mutual funds attract new investments only when the WIG performs well

Polish mutual fund holdings are equally divided into different asset classes

Bond investments are an alternative to other asset classes

HNW INVESTMENT PREFERENCES

HNW individuals allocate 20% of their investible assets outside traditional liquid investments

Low interest rates encourage HNW clients to invest in property

Polish HNW individuals have increased their offshore investments

Access to a better range of investments and tax efficiency drive offshore investments in Poland

Polish HNW individuals tend to book their assets in Europe or the US

APPENDIX

Abbreviations and acronyms

Supplementary data

Definitions

Affluent

Domicile

DTA

FATCA

HNW

Liquid assets

Mass affluent

Onshore

Residency

TIEAs

Methodology

2015 Global Wealth Managers Survey

Global Wealth Model methodology

Global Retail Investments Analytics methodology

Exchange rates

Bibliography

Further reading

About Verdict Financial

Disclaimer

Table

Table 1: Poland: standard personal tax rates

Table 2: Poland: special personal tax rates

Table 3: Poland: maximum real estate tax rates, 2015

Table 4: Poland: total adult population by asset bands (000s), 2009-15

Table 5: Poland: forecast total adult population by asset band (000s), 2016f-19f

Table 6: Poland: total onshore liquid wealth by asset band ($bn), 2009-15

Table 7: Poland: forecast total onshore liquid wealth by asset band ($bn), 2016f-19f

Table 8: Polish zloty-US dollar exchange rate, December 31, 2014 and December 31, 2015

Figures

Figure 1: Affluent individuals account for just over 3.2% of the total adult population in Poland

Figure 2: Affluent individuals hold 83.8% of the total liquid assets in Poland

Figure 3: Annual growth of retail savings and investments in Poland has exceeded 5%

Figure 4: The vast majority of savings in Poland are allocated in deposits

Figure 5: Deposits and mutual funds will drive retail savings growth in Poland

Figure 6: Steady GDP growth in Poland contributes to increased deposit holdings

Figure 7: The Polish stock market is dominated by the financial services sector

Figure 8: Growth in equities and mutual funds is dependent on the WIG's performance

Figure 9: Only 21.9% of Polish mutual fund assets are allocated to equity funds

Figure 10: In Poland, bond holdings are negatively correlated with the stock market

Figure 11: Property investments constitute the bulk of the portfolio held outside traditional asset classes by Polish HNW investors

Figure 12: Polish HNW investors hold almost a quarter of their assets offshore

Figure 13: Polish HNW investors offshore their wealth to access a better range of investment options

Figure 14: Traditional offshore centers and countries with developed capital markets are top offshoring destinations for Polish wealth

Figure 15: The Polish government has signed a number of DTAs and TIEAs

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