Table of Contents
Executive Summary
French HNW clients accumulate wealth through business ventures
Key findings
Critical success factors
Profiling The French HNW Investor
Family business owners account for the largest proportion of French HNW wealth
A diversified market requires wealth management services focused on HNW inheritor and earned income populations
Business France offers investment services to those seeking to do business with France
Many French HNW individuals have built their wealth in the property and manufacturing sectors
Wealth managers will do well to target HNW expats
Expats account for 8.5% of France's HNW population
The French Residence Permit Program offers residency to entrepreneurs
More than 60% of France's HNW expats come from Western Europe
Foreign exchange is the main reason HNW expats move investments to France
HNW Investment Style Preferences
French HNW investors seek an active role in managing their wealth
Exclusivity and better returns motivate HNW investors to opt for wealth managers
Over half of France's HNW wealth is held in discretionary mandates
Advisory asset management is expected to display the greatest demand increase
Greater demand for discretionary and advisory asset management is forecast
HNW investors cite various reasons for investing a proportion of their wealth independently
Understanding Asset Allocation Trends Among French HNW Investors
French wealth managers expect a noticeable increase in demand for equity
Equities will continue to make up the largest segment of HNW portfolios
French HNW individuals hold 42% of wealth in equities
Equity is predominately allocated to direct holdings rather than funds
French HNW clients cite time and diversification as reasons for preferring equity funds to direct holdings
Bonds are the second most important investment option for French HNW clients
Bond funds and direct corporate bonds account for the majority of holdings
Cash deposits are equally important for HNW portfolios in France and Western Europe
Cash investments are nearly equally allocated between local and foreign currency deposits
Clients cite varied reasons for opting for cash funds over direct holdings
Demand for property investments is expected to grow over the next year
54.5% of French HNW investors prefer direct property investments to funds and ETPs
AXA Investment Managers provides clients with direct property investment opportunities
Alternatives represent just 6% of French HNW portfolios
French HNW investors prefer funds to direct holdings
Demand for alternative investments is expected to grow
French HNW clients invest the smallest proportion of their wealth into commodities
Funds make up a significant proportion of commodity holdings
Diversification and protecting against inflation drive commodity investments
HNW Product And Service Demand
Demand is varied among planning services
Financial planning is the most desired among French HNW investors
Inheritance and pension planning services are expected to see moderate demand increases
Property and tax services experience moderate demand from French HNW investors
Investment property advice sees less demand than tax planning
Tax planning services will become a focal point of wealth management services
Appendix
Abbreviations and acronyms
Definitions
HNW
Methodology
Verdict Financial's 2015 Global Wealth Managers Survey
Verdict Financial's 2014 Global Wealth Managers Survey
Bibliography
Further reading
About Verdict Financial
Disclaimer
List of Figures
Figure 1: Family business owners and first-generation entrepreneurs account for over half of France's HNW investors
Figure 2: Business France works with entrepreneurs to foster business opportunities with regional and global scope
Figure 3: Rationale for Martin Maurel acquisition, as presented by Rothschild and Co
Figure 4: Property and manufacturing are the most significant drivers of French HNW wealth
Figure 5: 42.7% of HNW expat clients are classified as long-term residents
Figure 6: Almost half of France's HNW expats come from the UK
Figure 7: HNW expats living in France want to avoid foreign exchange fees and charges
Figure 8: HNW clients expect access to sophisticated investment options and better returns by using professional wealth management services
Figure 9: 52.8% of HNW assets are managed using discretionary mandates
Figure 10: Wealth managers experience the greatest demand for discretionary asset management
Figure 11: French wealth managers predict advisory mandates will see the largest demand increase over the next two years
Figure 12: French HNW investors are confident in and have a preference for managing a portion of their investments
Figure 13: Equities will continue to make up the largest proportion of French HNW portfolios
Figure 14: The majority of HNW investors prefer direct equity holdings to funds
Figure 15: Wealth managers are confident that equity demand will increase significantly
Figure 16: 56.2% of bond holdings are kept in funds
Figure 17: French HNW clients opt for bonds to diversify their portfolios
Figure 18: France's HNW cash holdings are mostly held in local and foreign currency deposits
Figure 19: Similar to the rest of Western Europe, wealth managers in France expect demand for cash to decrease
Figure 20: French HNW investors prefer property investments held in direct holdings to funds
Figure 21: The AXA WF Global Flexible Property fund exposes investors to long-term returns from direct property investments
Figure 22: Rental income drives HNW demand for property
Figure 23: Alternative holdings are nearly equally allocated among hedge funds, private equity, and other structured products
Figure 24: Amundi Asset Management offers clients 23 years of experience in managing alternative portfolios
Figure 25: Asset diversification is the main driver for alternative investments and funds
Figure 26: French HNW investors prefer to invest in commodity funds rather than direct holdings
Figure 27: The main driver for commodity funds is asset diversification
Figure 28: Pension planning experiences the least demand from French HNW clients
Figure 29: Notable increases in demand for pension and inheritance planning are expected
Figure 30: 74.4% of wealth managers experience strong demand for tax planning services
Figure 31: Over the next two years a moderate increase in demand for investment property advice is expected
