Singapore Wealth Management: HNW Investors 2019

Singapore Wealth Management: HNW Investors 2019



The local HNW segment is older than their global peers, highlighting the need for wealth preservation and efficiently passing on wealth through the generations via trusts or simple inheritance planning. Other opportunities include repatriation of offshore assets and high demand for tax planning due to changes brought about by the OECDs Common Reporting Standard. One of the main challenges is the dominance of advisory asset management, which is more time consuming than offering discretionary mandates.

This report analyzes the investing preferences and portfolio allocation of Singapores HNW individuals. It profiles HNW investors in terms of their demographics, examines the allocation of HNW investors portfolios, analyzes their propensity to invest offshore, and explores their product and service demand.

Scope

- Nearly half of male HNW investors are older than 60, compared to just under 40% of female investors. This is high for the region.
- Singapores large expat population is transient, meaning wealth managers must be able to effectively convert them to offshore clients when they leave.
- After years of waning, commodities and property will grow again in HNW portfolios.
- Few providers currently offer impact investing, despite dramatic growth in demand from the next generation of investors.

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 and service portfolio to match current demand among HNW individuals and to react proactively to forecasted changes in demand.

1. EXECUTIVE SUMMARY
1.1. Singapores wealth market is dominated by foreigners
1.2. Key findings
1.3. Critical success factors
2. SIZING AND FORECASTING
2.1. The proportion of HNW individuals in Singapore will remain relatively static
2.2. Over a thirdof Singapores liquid assets are held by HNW individuals
3. DEMOGRAPHICS
3.1. HNW entrepreneurs are a lucrative target market
3.1.1. The majority of HNW individuals have reached or are approaching retirement age
3.1.2. Earned incomeaccounts for a greater proportion of HNW wealth than entrepreneurship
3.2. Financial services and healthcarearethe main (and growing) HNW wealth generators
4. HNW EXPATS
4.1. Expats are anabove-average and growing part of the HNW market
4.1.1. Expats constitute over 31% of the local HNW market, which isnotablecompared to even other high-immigration nations
4.1.2. HNW expats from the UK and China represent an attractive target segment
4.1.3. The transient nature of the Singaporean expat market means being able to transfer an onshore relationship to an offshore one is critical
4.1.4. Auxiliary services will be useful in recruiting expats
4.1.5. Job opportunities and lifestyle factors are the biggest drivers for expats
5. HNW INVESTMENT STYLE PREFERENCES
5.1. The lack of time and advanced investments drive uptake of advice
5.1.1. Convenient access to sophisticated investments resonates most with Singaporean HNWs
5.1.2. Singaporean HNW investors spread their wealth across 3.7 wealth managers
5.1.3. The largest proportion of HNW wealth is now kept in discretionary mandates
5.1.4. A sophisticated digitalproposition is increasingly important to attract HNW investors
5.2. Advisory and discretionaryservicesofferopportunities fortraditional wealth managers
5.2.1. The strongest growth in demand will be for discretionary and advisory asset management
5.2.2. HNW investors self-direct to retain control over their assets
6. HNW ASSET ALLOCATION PREFERENCES
6.1. A desire for further diversification will drive uptake of alternatives among HNW investors
6.1.1. Equities dominate the typical HNW portfolio, exposing it to greater volatility
6.1.2. Equities constitute almost a quarter of HNW investors managed wealth
6.1.3. Continued strength in bond and cash demand suggests caution rules in Singapore
6.1.4. Investment is driven by expected higher income or risk aversion
7. OFFSHOREINVESTMENT DRIVERS AND MOTIVATORS
7.1. HNW offshore holdings are close to par with the wider region
7.1.1. Singaporean HNW investors have been consistently offshoring two fifths of their portfolio
7.1.2. Offshore hubs with major stock markets are the main draw
7.2. The aim for better returns offshore is linked to local knowledge
7.2.1. The offshore portfolio is more skewed towards equities
8. HNW PRODUCT AND SERVICE DEMAND
8.1. HNW investors show strong demand for all advice and planning services, but financial planning is particularly sought after
8.1.2. Tax planning and social investment represent a growing opportunity
8.2. Strong market growth will drive demand for all auxiliary services
8.2.1. Demand for secured investment portfolio lending is forecast to increasethe most, as investors are betting on strong stock market performance
8.2.2. Offering philanthropy services will become more important as the next generation takesover
9. APPENDIX
9.1. Abbreviations and acronyms
9.2. Definitions
9.2.1. Affluent
9.2.2. HNW
9.2.3. Liquid assets
9.3. Methodology
9.3.1. GlobalDatas 2019 Global Wealth Managers Survey
9.3.2. Level of agreement calculation
9.3.3. Service level of demand score
9.3.4. Forecast level of demand calculation
9.4. Secondary sources
9.5. Further reading

List Of Figures

Figure 1: Singapore affluence is forecast to grow again at a steady rate,albeit at about half the rate of 2018
Figure 2: Liquid assets continue to increase, with mass affluentsaccounting for the majority
Figure 3: HNW individuals remain predominately older males, partly due to inward HNW migration
Figure 4: HNW individuals almost entirely derive their wealth from earned income and entrepreneurship
Figure 5: Financial services andhealthcare have helped power the current generation of HNW investors
Figure 6: Expats represent an above-average proportion of the Singapore HNW population
Figure 7: HNW expats are drawn to Singapore for its jobs and superior quality of life
Figure 8: Lack of time and access to more sophisticated investments are primary drivers
Figure 9: Singapore HNW individuals use a similar number of wealth managers than the regional average
Figure 10: Discretionary mandateshave become key in Singapores HNW space
Figure 11: Automated services experiencelower demand relative to more established options
Figure 12: Demand for discretionary and advisory management is expected to surge over the next 12 months
Figure 13: HNW individuals self-direct in order to maintain exclusive control
Figure 14: Singapore HNW investors are overweight in cash and alternatives
Figure 15: Direct equity investments are the most popular product among HNW individuals
Figure 16: Demand for bonds will increase the mostin Singapore,in contrastto the equity bulls in the rest of AsiaPacific
Figure 17: Risk aversionand diversification benefits strongly affect asset allocation preferences
Figure 18: Offshoring wealth is a major drain on the AUM wealth managers in Singapore can expect from local HNWs
Figure 19: Singapore HNW offshore holdings are in established wealth management centers
Figure 20: Better returns drive offshore investment, followed distantly by geographic diversification
Figure 21: New Yorks and Hong Kongs large liquid stock markets entice Singaporeans offshore
Figure 22: Demand is most pronounced for financial planning
Figure 23: Strong opportunities exist for more diversified product offerings

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