Wealth in China: HNW Investors 2018

Powered by

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

"Wealth in China: HNW Investors 2018", report analyzes the investing preferences and portfolio allocation of Chinese HNW investors. It is based on our proprietary Global Wealth Managers Survey.

Chinese HNW investors, who skew heavily towards entrepreneurial males across three industries, show strong demand for most forms of wealth advice and planning. A multi-service proposition underpinned by a proven ability to demonstrate returns will be key to tapping into demand. A uniquely large expat market, a burgeoning appetite for novel options such as robo-advice, and the upcoming monumental transfer of wealth between generations provides arguably the most significant growth opportunity for global wealth managers in the foreseeable future.

Specifically the report –
– Profiles the average Chinese HNW investor in terms of their demographics and explores the expat opportunity in China.
– Analyzes which wealth management mandates are preferred among Chinese HNW investors and how demand will develop going forward.
– Examines the allocation of Chinese HNW investors’ portfolios into different asset classes and how this is expected to develop in the future.
– Discusses HNW investors’ propensity to invest offshore, their preferred booking centers and asset classes, as well as China’s standing as an offshore center.
– Identifies product and service demand among Chinese HNW investors.

Scope

– Females account for a mere 11% of Chinese HNW investors. But as they benefit more from equal rights than ever before they represent a growing target segment.

– Expats constitute 23% of the local HNW population. They represent an attractive target market thanks to their more complex service requirements.

– Chinese HNW asset allocation has become more diverse. The proportion of cash holdings has fallen to 19%, while fixed-income products have risen to 9%.

– Real estate investment demand will soften slightly, but the rise of authentic real estate investment trusts (REITs) will be a game-changer.

– Pensions/retirement and financial planning are the most sought after wealth management services, with 87and 95% of wealth managers reporting strong HNW demand.

Reasons to Buy

– Develop and enhance your client targeting strategies using our data on HNW profiles and sources of wealth.

– Give your marketing strategies the edge required and capture new clients using insights from our data on HNW investors’ preferences for the various styles of asset management.

– Tailor your investment product portfolio to match current and future demand for different asset classes among HNW individuals.

– Develop your product and service proposition to match demand expressed by Chinese HNW investors and react proactively to forecasted changes in demand.

UBS

Table of Contents

Table of Contents

1. EXECUTIVE SUMMARY 2

1.1. The maturing China wealth market offers plentiful growth potential 2

1.2. Key findings 2

1.3. Critical success factors 2

2. OVERVIEW 8

2.1. Understanding the changing demand and demographic patterns of HNW investors is critical in China’s rapidly evolving wealth market 8

2.2. Demographics: Targeting entrepreneurial males across three industries is key 9

2.3. Expats: Providers should leverage the expansive expat opportunity 10

2.4. Investment style preferences: The prospect of superior returns drives the uptake of advice 11

2.5. Asset allocations: All asset classes have strong momentum, especially bonds and commodities 12

2.6. Offshore preferences: A solid track record and a wide product range can entice wealth home 13

2.7. Wealth managers should lead with tax and pension planning 14

3. WEALTH MANAGERS MUST PREPARE FOR A SHIFT IN GENDER AND GENERATIONAL INFLUENCE 15

3.1. China’s wealth market is comparatively young, but wealth preservation strategies should be given greater attention 15

3.2. Women form a small but growing target segment 15

3.2.1. UBS leads the way in Asia, having declared female investors a key target market 16

3.3. Intergenerational wealth is complex but not to be underestimated 17

4. EXPATS ARE AN ATTRACTIVE SEGMENT, BUT UNDERSTANDING THEIR UNIQUE SERVICE REQUIREMENTS IS CRUCIAL 19

4.1. Offering business banking services is paramount to appeal to Chinese HNW expats 19

4.1.1. The large HNW expat market is underpinned by entrepreneurs and long stays 19

4.1.2. HNW entrepreneurs looking to migrate to China will appreciate support navigating the country’s hazy business environment 20

4.1.3. Family life challenges have the potential to have a negative effect on the wide expat market 21

4.2. Wealth managers should foster closer collaboration with their investment banking arm to grow their expat client book 22

5. OFFERING ROBO-ADVICE IS MANDATORY TO COMPETE IN CHINA’S WEALTH MARKET 24

5.1. Robo-advice is rapidly expanding amid mounting industry adoption 24

5.1.1. Once known as laggards, Chinese wealth managers are now embracing the opportunity automated services provide 25

5.2. A combination of automation and in-person will allow wealth managers to target a broader audience and free up time 26

5.3. An over-reliance on automated investment services has a negative effect on retention rates 26

6. BROAD GROWTH IS EXPECTED ACROSS INVESTMENT OPTIONS 28

6.1. While providing an easy sell, rising demand for commodity and bond investments calls for caution 28

6.1.1. HNW demand for commodity and bond investments is set to rise rapidly 28

6.1.2. Wealth managers need to ensure HNW investors understand the risks involved in commodity and bond investments 30

6.2. Wealth managers should redirect HNW demand for real estate towards REITs as volatility picks up 31

6.2.1. China’s residential real estate market is cooling down after years of buoyancy, curbing HNW demand for the asset class 31

6.2.2. The establishment of a REIT sector will allow for greater diversification while freeing up capital traditionally locked in real estate 32

7. CHINESE OFFSHORE HNW WEALTH IS BIG BUSINESS 33

7.1. The offshore proportion of China’s HNW market is above average despite increasingly strict capital controls 33

7.2. Property accounts for the majority of China’s offshore investments 34

7.2.1. Diversification benefits provide a compelling draw for real estate investments offshore 34

7.2.2. The US, Australia, and Canada are the top property investment locales 35

7.2.3. Broad disincentives may dampen appetite for offshore property 36

8. WEALTH MANAGERS MUST BE COMPREHENSIVE 37

8.1. Chinese HNW clients show strong demand for auxiliary services 37

8.2. Wealth managers have to address demand/supply gaps around tax planning and inheritance 38

8.2.1. An aging entrepreneur community calls for a greater focus on succession planning 38

8.2.2. Chinese investors’ significant offshore holdings will continue to support strong demand for tax planning services 39

9. APPENDIX 40

9.1. Abbreviations and acronyms 40

9.2. Supplementary data 40

9.3. Definitions 42

9.3.1. Affluent 42

9.3.2. HNW 42

9.3.3. Liquid assets 42

9.4. Methodology 42

9.4.1. GlobalData’s 2017 Global Wealth Managers Survey 42

9.4.2. GlobalData’s 2016 Global Wealth Managers Survey 43

9.4.3. Level of agreement calculation 43

9.4.4. Service level of demand score 43

9.4.5. Forecast level of demand calculation 43

9.5. Bibliography 44

9.6. Further reading 46

Table

List of Tables

Table 1: Cash and near-cash products: importance of asset allocation drivers 40

Table 2: Equities: importance of asset allocation drivers 40

Table 3: Bonds: importance of asset allocation drivers 41

Table 4: Property: importance of asset allocation drivers 41

Table 5: Commodities: importance of asset allocation drivers 41

Table 6: Alternatives: importance of asset allocation drivers 42

Figures

List of Figures

Figure 1: Female HNW investors tend to be younger than their male counterparts 9

Figure 2: Expats account for almost a quarter of Chinese HNW investors 10

Figure 3: Demonstrating effectiveness is crucial given the factors that drive uptake of advice 11

Figure 4: An over-reliance on direct property limits earning potential 12

Figure 5: A better range and the prospect of better returns offshore are driving HNW wealth abroad 13

Figure 6: With the exception of philanthropy, HNW individuals exhibit strong demand for all auxiliary services 14

Figure 7: China’s wealth market has a comparatively younger and marginally more male-dominated profile than evident elsewhere in Asia Pacific 16

Figure 8: UBS targets female investors with its Unique proposition 17

Figure 9: Chinese wealth managers recognize the intergenerational wealth opportunity, but less so than their global peers 18

Figure 10: Chinese HNW expats are more likely to be longer-term residents pursuing business interests 20

Figure 11: Chinese HNW expats have complex demands and are lucrative from a loyalty perspective 21

Figure 12: Chinese wealth managers are most reliant on client referrals and contacts for HNW expat acquisition 23

Figure 13: Chinese wealth managers are already meeting increased demand for automated advice 25

Figure 14: Hiring talent represents a significant challenge in China 26

Figure 15: Chinese HNW demand for commodities and bonds is forecast to record the highest increase 28

Figure 16: Bonds appeal to more risk-averse Chinese HNW investors – a reality evident elsewhere in the world 30

Figure 17: The leading property investment drivers have added importance for Chinese HNW investors 32

Figure 18: China’s HNW investors hold a more significant offshore portfolio than elsewhere due to perceived access to a better range of investments 34

Figure 19: Offshore property is of great appeal to Chinese HNW investors 35

Figure 20: Chinese HNW investors show high levels of demand for auxiliary services 38

Frequently asked questions

Wealth in China: HNW Investors 2018 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 Request a Free Sample

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.

Sample Report

Wealth in China: HNW Investors 2018 was curated by the best experts in the industry and we are confident about its unique quality. However, we want you to make the most beneficial decision for your business, so we offer free sample pages to help you:

  • Assess the relevance of the report
  • Evaluate the quality of the report
  • Justify the cost

Download your copy of the sample report and make an informed decision about whether the full report will provide you with the insights and information you need.

Below is a sample report to understand what you are buying

See what our customers are saying
testimonial-image
testimonial-image
testimonial-image
testimonial-image
testimonial-image
testimonial-image
testimonial-image

“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
France Life Insurance Market Size and Trends by Line of…
$3,999 | June 2024
Financial Services
New
Wealth Management Trends and Themes in 2024
$5,250 | May 2024
Financial Services
New
Peru Insurance Industry - Key Trends and Opportunities to 2028
$1,450 | May 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 China: HNW Investors 2018 in real time.

  • Access a live Wealth in China: HNW Investors 2018 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.