Wealth in Singapore: HNW Investors 2017

Wealth in Singapore: HNW Investors 2017

Summary

"Wealth in Singapore: HNW Investors 2017", report analyzes the investing preferences and portfolio allocation of Singaporean HNW investors. The report is based on our proprietary Global Wealth Managers Survey.

Singapores HNW population remains dominated by business owners and those who accumulated their wealth through earned income. HNW individuals invest around half of managed wealth with their main wealth manager, and the majority of wealth is held via discretionary mandates. Current investment demand is particularly pronounced for equities and corporate bonds; however, the latter are forecast to fall out of favor as investors are looking for new means of diversification in the alternative investment universe. Led by pension and financial planning, overall demand for planning services is moderate. However, going forward we expect increased demand for tax planning.

Specifically the report -
- Profiles the average Singaporean HNW investor in terms of their demographics and analyzes the expat opportunity in Singapore.
- Analyzes which wealth management mandates are preferred among Singaporean HNW investors and how demand will develop looking forward.
- Examines the allocation of Singaporean HNW investors portfolios into different asset classes and how the allocation is expected to develop in the future.
- Analyzes the product and service demand among Singaporean HNW investors.

Scope

- Expats constitute half of Singapores HNW population, hence constituting a lucrative target market.
- Accelerated demand for discretionary mandates will be the pre-eminent trend over the coming year.
- The average Singaporean HNW portfolio is biased towards equity and bond investments, with demand for the latter expected to fall as we are seeing a move into risk assets.
- An above-average proportion of Singaporean HNW wealth is allocated to alternative investments - the majority of which is held in hedge funds. Alternatives should gain further traction.
- Singaporean HNW investors currently show the strongest demand for financial planning, but demand for tax advice is forecast to experience the strongest rise in demand over the coming two years.

Reasons to buy

- Develop and enhance your client targeting strategies using our data on HNW profiles and source of wealth.
- Give your marketing strategies the edge required and capture new clients using insights from our data on HNW investors drivers for seeking investment advice vs self-directing.
- Tailor your investment product portfolio to match the current and future demand for different asset classes among HNW individuals.
- Develop your service proposition to match the service and product demand expressed by Singaporean HNW investors and react proactively to the forecasted change in demand.

Table of Contents
1. EXECUTIVE SUMMARY 1
1.1. Key findings 1
1.2. Critical success factors 1
2. PROFILING THE SINGAPOREAN HNW INVESTOR 7
2.1. HNW investors who have accumulated their fortunes through earned income remain the largest specific segment 7
2.1.1. The vast majority of Singaporean HNW investors are approaching or have reached retirement age, making wealth preservation strategies key 7
2.1.2. Professionals lead Singapores wealth market, but entrepreneurs are also a lucrative target market 8
2.1.3. Property is the main wealth generator among affluent Singaporeans, but financial services remain important too 10
2.1.4. Singaporean HNW investors are more likely to hold director and shareholder roles than their regional peers 12
2.2. Dedicated expat services are a necessity in the Singaporean market 13
2.2.1. Expats account for half of the resident HNW population 13
2.2.2. Government incentives still make Singapore a hub for wealthy expatriate investors 14
2.2.3. HNW expats from the UK and Switzerland represent the largest target segments 14
2.2.4. Expat offerings from the majors, such as Standard Chartered, are increasingly being challenged by start-ups and boutiques 15
2.2.5. Expats settling in Singapore demand control over their investments 17
3. HNW INVESTMENT STYLE PREFERENCES 18
3.1. Convenience and professionalism should feature strongly in every wealth managers targeting campaign 18
3.1.1. Singaporean HNW investors use an average of three wealth management firms 18
3.1.2. Lack of time and expertise motivate HNW investors to seek professional advice 19
3.1.3. The overwhelming majority of HNW wealth is kept in discretionary mandates, and demand will remain strong 20
3.1.4. Current demand is most pronounced for discretionary mandates 21
3.2. Demand for all wealth mandates is not expected to spike significantly 23
3.2.1. Accelerated demand for discretionary mandates will be the pre-eminent trend 23
3.2.2. Investors reluctance to relinquish control still underpins demand for advisory mandates, but lack of time is driving a skew towards discretionary 24
3.2.3. HNW investors feel confident managing a small part of their wealth independently 26
4. ASSET ALLOCATION TRENDS AMONG SINGAPOREAN HNW INDIVIDUALS 27
4.1. A desire to diversify portfolios will drive uptake of alternatives among HNW investors 27
4.1.1. Increasing demand for risk assets means investor education is becoming more important 27
4.1.2. Equities constitute almost a third of Singaporean HNW investors managed wealth 28
4.1.3. Bond investments have declined in popularity over the past year, and will continue to do so 30
4.1.4. HNW investors desire to maintain liquidity is putting a strain on fee income 33
4.1.5. Property remains a small element of Singaporean HNW investment portfolios 34
4.1.6. Conservative Singapore has taken to alternative investment alternatives 36
4.1.7. Commodity investments are of little interest to Singapores HNW clients 39
5. HNW PRODUCT AND SERVICE DEMAND 42
5.1.1. Wealth managers should lead with financial planning services 42
5.1.2. Wealth managers should consider including tax advice in their overall service propositions 43
6. APPENDIX 45
6.1. Abbreviations and acronyms 45
6.2. Definitions 45
6.2.1. Affluent 45
6.2.2. HNW 45
6.2.3. Liquid assets 45
6.2.4. Mass affluent 45
6.3. Methodology 46
6.3.1. GlobalDatas 2016 Global Wealth Managers Survey 46
6.3.2. GlobalDatas 2015 Global Wealth Managers Survey 46
6.3.3. GlobalDatas WealthInsight 46
6.3.4. Exchange rates 47
6.4. Bibliography 47
6.5. Further reading 48

List Of Figures

Figure 1: Singaporean HNW investors are typically male and above the age of 50 8
Figure 2: Earned income and business ownership are the most important generators of HNW wealth 10
Figure 3: Property and real estate account for by far the largest share of Singapores HNW investors 11
Figure 4: Director is the most common title held by Singaporean HNW individuals 12
Figure 5: Expats share of the Singaporean HNW population is more than twice that across the region 13
Figure 6: UK migrants dominate Singapores sizable HNW expat market 15
Figure 7: Segmentation of its expat offering, and demonstration of its targeted credentials, keep Standard Chartered strong in this lucrative space 16
Figure 8: Control issues dominate the expatriation of wealth in Singapore 17
Figure 9: Singaporean HNW investors prefer to work with at least two wealth management firms 19
Figure 10: Lack of time and expertise drive financial advice uptake among affluent Singaporeans 20
Figure 11: The majority of Singapores HNW wealth is now in discretionary mandates 21
Figure 12: Singaporean HNW individuals are showing strongest demand for discretionary mandates, reflecting a relatively newfound ability to relinquish some control 22
Figure 13: The recent skew towards discretionary asset management is expected to prevail in 2017-18 24
Figure 14: HNW investors are reluctant to relinquish control over their investments 25
Figure 15: Investors reluctance to relinquish control completely means a small proportion of HNW wealth will remain unmanaged 26
Figure 16: Singapore HNW investors are increasing their exposure to risk assets 28
Figure 17: HNW investors prefer direct equity holdings, making market access a hygiene factor 29
Figure 18: Capital appreciation opportunities and dividend income are the top drivers of equity investments 30
Figure 19: HNW investors allocate just 7.3% of managed wealth to fixed-income products 31
Figure 20: Demand for fixed-income products is set to decrease 32
Figure 21: Just under a quarter of managed Singaporean HNW wealth is held in cash products 33
Figure 22: HNW demand for cash products is expected to stagnate 34
Figure 23: A lackluster property market in recent years continues to curb HNW investment in Singapore 35
Figure 24: Asset diversification is the key driver of the limited property investments occurring 36
Figure 25: Alternatives constitute a minor proportion of the typical HNW portfolio 37
Figure 26: Diversification benefits are driving demand for alternatives 38
Figure 27: Commodities are of little interest to affluent Singaporean investors 40
Figure 28: Commodity holdings are forecast to remain low 41
Figure 29: Demand for financial planning services is recording the strongest demand levels in a market where demand levels are highly polarized 43
Figure 30: Already strong HNW demand for financial and pension planning services is forecast to increase further 44

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