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Wealth Management in Spain 2008

Publication Date	September 2008
Publisher	Datamonitor
Product Type	Report
Pages	59
ISBN Number	not applicable
Product Code	DAT04322

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Summary

Introduction

This report focuses on the onshore liquid wealth of Mass Affluent and High Net Worth customers. It sizes, segments and forecasts the number of affluent individuals and the liquid assets they hold. It investigates the competitive landscape in terms of players and products and services and presents the results of Datamonitor's large scale survey of the main players.

Scope

HNW demographic and attitudinal attributes based on our Wealth Management Market Leaders Survey 2008
Sizes, segments and forecasts the number of affluent invididuals across 10 liquid asset bands from EUR50k
Extensive primary research from 20 wealth management companies highlights thier strategies for revenue growth, acquiring and keeping clients
Aggregated data covers onshore liquid assets including cash and deposits, mutual funds, direct investment in equities and direct investment in bonds.

Highlights

Over the next two years, wealthy Spanish investors will increasingly favor alternative investments, to the detriment of the safe havens of fixed income and cash/deposits. Equity will continue to account for the single highest percentage of their portfolios but the take-up of ex-property alternative investments, in particular, will accelerate.

Wealth managers operating in Spain enjoy fairly long-term relationships with their clients, with more than half confirming average client relationships of more than 10 years' duration. This is in keeping with Spanish HNWs' above-average loyalty. A growing tendency to change wealth managers may alter this statistic in the future, however.

Among Spanish wealth managers, the most cited strategy for client retention is providing lending as well as asset management services (cited by 55%). This may link directly to the fact that 40% of Spanish HNW wealth is attributed to business or entrepreneurship.

Reasons to Purchase

Understand the HNW population's investments by sector and geography, appetite for risk, and reasons for choosing/leaving their wealth service
Assess market attractiveness by reviewing size and growth forecasts for the potential wealthy client base through 2012
Assess the threats and opportunities for wealth managers by understanding how peers are planning to grow revenues, acquire and keep clients

Content

Overview
Catalyst
Summary
- Methodology
Executive Summary
- The Spanish Wealth Market Has Expanded Strongly In The Last Four Years, With A Sizeable Percentage Of Hnw Investable Assets Attributable To Business And Entrepreneurship
- Special Feature: Services For Spanish Business Owners Must Address A Range Of Personal, Family And Commercial Considerations
- A Penchant For Savings And Stock Market Growth Are Driving The Increase In Spain's Wealthy Population
- Spain's Onshore Investment Market Is Tentatively Shifting Towards Safe Havens
- Spain's High Net Worth Investors Are Less Financially Sophisticated Than Their European Peers
- Wealth Managers In Spain Enjoy Fairly Strong Relationships With Their Clients Compared To Europe As A Whole
- Special Feature: Wealth Management Services For Spanish Entrepreneurs
- Services For Business Owners Must Address A Range Of Personal, Family And Commercial Considerations
- Entrepreneurs Account For The Single Highest Percentage Of Spanish Hnw Wealth
- Entrepreneurs Are Time-Poor, But Need To Stay In Control
- Regional Private Banking Centers Deliver Added Convenience
- Bny Mellon's Updated Internet Platform Facilitates Customized Reporting And Notifications
- Business Owners Are Open To Innovative And Sophisticated Investment Solutions
- Merrill Lynch Integrates Its Asian Private And Investment Banking Operations To Deliver Better Investment Solutions For Clients
- Entrepreneurs Expect Their Wealth Manager To Offer Integrated Commercial Banking Facilities
- Efforts To Integrate Commercial And Private Banking Are Pursued Through Joint Client Consultations
- Estate Planning Services Must Encompass The Added Dimension Of Succession Planning
- Succession Planning For Entrepreneurs And Their Families Is An Increasingly Lavish Affair
- Cross-Border Business And New Legislation Increase The Need For Tax Advice
- Fortis Makes Tax Advice A Core Element Of Its Integrated "Fortis House" Concept
- Action Points For Spanish Wealth Managers
- Spain's Wealth
- A Penchant For Savings And Solid Investment Returns Are Driving The Increase In Spain's Wealthy Population
- A Healthy Savings Habit Is Boosting Spain's Wealth, But Increasing Personal Debt Will Temper Growth In Liquid Assets In The Future
- Equity Investment Returns Have Boosted Spain's Wealth Accumulation
- Bond Yields And Deposit Rates Have Added Slowly To Spanish Investors' Portfolios
- Spain's Property Investment Sector Is In Decline
- Spain's Onshore Investment Market Is Tentatively Shifting Towards Safe Havens
- Spanish Investors Put 85 Billion Into Deposits In 2007
- The Affluent Population In Spain Grew Strongly Until 2006 Before Leveling Off
- A Strong Penchant For Savings And Solid Investment Returns Have Fuelled The Growth In The Spanish Wealth Market To Date
- Outlook For Spain's Wealthy Population In 2008-12
- 2008-9 Will Be Characterized By Struggling Economies Worldwide
- Data Tables
- The Spanish High Net Worth Investor
- Spain's High Net Worth Investors Represent The European Average In Terms Of Age
- Spain's Hnws Are Concentrated In The 31-50 Age Range, But There Are Relatively Few Under
- Wealth Management Service Implication: The Wealth Value Proposition Needs To Be Built Around The Needs Of Middle-Aged Clients
- In Contrast To The European Average, Spain's Wealth Comes Less From Inheritance And More From Entrepreneurship And Earned Income
- Wealth Management Service Implication: Dedicated Client Management Teams For Entrepreneurs And Professionals Are Critical
- Innovative Example From The Uk: The Coutts Entrepreneur/Business Owner Proposition Goes Beyond Private And Commercial Banking
- Spanish Hnws Are Heavily Invested In Equities, But Also Maintain Significant Cash And Fixed Income Holdings
- Hnw Spanish Investment Will Shift Towards Alternative Investments
- Spanish Hnws' Onshore Investments Are More Eurocentric Than Those Of Their Peers Across The Rest Of Europe
- Wealth Management Service Implication: Private Banks And Wealth Managers Can Deliver Superior Returns By Broadening Their Clients' Horizons And Holdings
- Innovative Example From The Uk: Hsbc Hosts Emerging Markets Investment Seminar For Its Premier Customers
- Spanish Hnw Customers Are Concerned About Passing On Their Assets, But Are Prepared To Take Calculated Risks And Entertain New Ideas
- Spanish Hnw Investors Want To Provide For Their Heirs
- Wealth Management Service Implication: Providers Should Be Offering A Comprehensive Range Of Estate Planning Products And Services
- Innovative Example From The Uk: Butterfield Private Bank Introduces Its New Iht Service
- Spanish Hnws Are Open To Risk And To New Investment Ideas, But Wary Of Unknown Territory
- Spanish Hnws Are Demonstrating The Strongest Demand For Alternatives And Emerging Markets Equities/Funds
- Wealth Management Service Implication: Use Innovative Products To Deliver Solid Returns
- Innovative Example From The Uk: Focus Capital Develops An Emerging Market Multi-Strategy Fund
- Spain's Hnws Are Less Financially Sophisticated Than The Average European Hnw
- Spanish Hnws Tend To Rely Less On A Personal Recommendation When Selecting A Wealth Manager, But Face-To-Face Relationship Management Is More Highly Valued
- Wealth Management Service Implication: Providers Must Invest In Strategies To Build On Existing Relationships In Order To Attract And Retain Their Clients
- Innovative Example From The Us: First Tennessee Enlists Its Retail Branch Staff To Attract Mass Affluent Clients
- Wealthy Spanish Investors Are More Loyal To Their Wealth Manager
- The Spanish Wealth Manager's View
- Wealth Managers In Spain Enjoy Fairly Strong Relationships With Their Clients And Will Drive Revenue Growth By Strengthening Product Range And Targeting New Clients
- Spanish Wealth Managers Have More Long-Term Customer Bases, Compared To Their European Peers, And Have To Share Their Clients With At Least One Other Bank
- Although Wealth Managers Are Also Keen To Win New Clients, They Intend To Primarily Focus On Product Development In Order To Increase Revenue
- Increasing Face-To-Face Contact Will Be The Most Effective Means Employed To Increase Share Of Wallet
- Cash Management Services Will Offer The Greatest Business Potential For Spain's Wealth Managers In The Coming Years
- The Key To Attracting Clients Will Be Personal Relationships
- Spanish Wealth Managers Can Best Attract New Clients By Leveraging Personal Relationships
- Wealth Managers' Own Clients And Intermediaries Are The Best Route To New Clients
- The Key To Keeping Clients Will Be A Solid Investment Performance, Understanding Customer Needs, And Providing Proactive Advice
- Wealth Managers In Spain Will Need To Augment Their Lending Services And Keep Their Clients Apprised Of Both Their Portfolio Positions And Upcoming Investment Opportunities
Appendix
- The Drivers Of Growth In The Wealthy Population
- Nominal Income Growth (Combined With Inflation, Changes In Gdp By Sector, Household Savings Rates And Debt Levels)
- Investment Returns (Market Capitalization, Interest Rates And Bond Yields)
- The Following Measures Are Not, In Themselves, Drivers Of Wealthy Population Growth
- Market Capitalization
- Gdp
- The Following Measures Are Not Drivers Of Wealthy Population Growth Except Under Very Restricted Circumstances
- Primary Residence Value Growth
- Inheritance
- Methodology
- Wealth Management Market Leaders Survey 2008
- Global Wealth Model
- The Uk Sub-Model
- Global Sub-Model (For All Other Countries)
- Forecasting Methodology
- Continuous Refinement To The Understanding Of Liquid Wealth Distribution
- Datamonitor's Wealth Numbers Compared With Other Wealth Numbers
- Definitions
- Western Europe
- Bibliography
- Further Reading
- Ask The Analyst
- Datamonitor Consulting
- Disclaimer
List Of Tables
- Table 1: Number Of Affluent Individuals In Spain By Liquid Asset Band, 000s, 2003-7
- Table 2: Number Of Affluent Individuals In Spain By Liquid Asset Band, 000s, 2008-12
- Table 3: Aggregate Onshore Liquid Assets Of Affluent Individuals In Spain By Liquid Asset Band, m, 2003-7
- Table 4: Aggregate Onshore Liquid Assets Of Affluent Individuals In Spain By Liquid Asset Band, m, 2008-12
- Table 5: "What Percentage Of The Hnw Client Base In Spain Is In Each Age Band?

"

Table 6: "What Percentage Of Hnw Client Base In Spain Accumulated Its Wealth Through The Following Sources?

"

Table 7: "What Percentage Of Hnw Customers' Portfolios In Spain Is Allocated To The Following Products?

"

Table 8: "In Two Years' Time, What Percentage Of Hnw Customers' Portfolios In Spain Will Be Allocated To The Following Products?

"

Table 9: "What Percentage Of Hnw Customers' Portfolio In Spain Is Allocated To The Following Regions?

"

Table 10: "What Are Hnw Clients In Spain Most Interested In Today?

"

Table 11: "Please Rate High Net Worth Clients In Spain On A Scale Of One To Four In Terms Of The Following Risk-Related Variables

"

Table 12: "For Which Investment Opportunities Is There A Lot Of Demand From Hnws In Spain?

"

Table 13: "Please Rate High Net Worth Clients In Spain On A Scale Of One To Four On The Following Variables Related To Financial Sophistication

"

Table 14: "Please Rate High Net Worth Clients In Spain On A Scale Of One To Four On The Following Relationship-Related Variables

"

Table 15: "Please Rate High Net Worth Clients In Spain On A Scale Of One To Four On The Following Loyalty-Related Variables

"

Table 16: Clients In Spain Are More Likely To Change Their Wealth Manager Now Than Two Years Ago
Table 17: "How Long Has Your Client Base In Spain Been With You, On Average?

"

Table 18: "How Many Wealth Managers Do Hnw Customers In Spain Have, On Average?

"

Table 19: "What Will Most Determine Revenue Growth In Spain's Wealth Management Market In The Next Two Years?

"

Table 20: "What Is The Most Effective Means Of Increasing Wealthy Clients' Share Of Wallet In Spain?

"

Table 21: "Rate The Following Product Areas In Terms Of Their Business Potential Among Wealthy Clients In Spain During The Next Two Years

"

Table 22: "Of The Following Product Areas, Which Three Will Your Company Focus Most Resources On In The Next Two Years?

"

Table 23: "What Are The Key Influences That Determine A Client's Choice Of Wealth Management Service In Spain?

"

Table 24: "What Are The Most Effective Wealth Management Customer Acquisition Techniques In Spain?

"

Table 25: "What Are The Most Likely Reasons For Clients In Spain To Leave A Wealth Management Service?

"

Table 26: "What Is The Best Way To Retain Wealthy Clients In Spain?

"

List Of Figures
- Figure 1: Rising Personal Debt Threatens To Undermine A Strong Savings Habit
- Figure 2: Growth In The Spanish Stock Markets Exceeds That Of Western Europe
- Figure 3: 10-Year Government Bond Yields Peaked In Mid-2007
- Figure 4: Retail Investors Strongly Increased Their Deposit Holdings In 2006 And 2007
- Figure 5: After Strong Growth In 2006 The Spanish Affluent Population Leveled Off At 4.7 Million In 2007
- Figure 6: Spain's Wealthy Population Will Continue To Grow In 2008-09, Albeit Slowly, To Reach Almost Six Million By 2012
- Figure 7: The 31-50 Age Band Accounts For The Greatest Share Of Hnw Customers In Spain At 42%
- Figure 8: Business/Entrepreneurship Is The Main Source Of Wealth In Spain, Accounting For 40% Of The Hnw Population
- Figure 9: 36% Of Hnw Portfolios In Spain Are Invested In Equities
- Figure 10: In Spain, Over The Next Two Years, Hnw Customers Will Increasingly Look To Alternative Investments, Which Will Grow Its Share Of Their Portfolios From 8% To 11%
- Figure 11: Hnw Investors In Spain Have 70% Of Their Portfolios Invested In Europe
- Figure 12: Inheritance Planning Is A Key Priority For Hnw Investors In Spain
- Figure 13: Hnw Investors In Spain Have A Higher Level Of Openness To Risk And Innovation Than The Average European Hnw Investor
- Figure 14: Emerging Market Equities/Funds And Alternative Investments Represent The Investment Opportunity Most In Demand From Hnw Clients In Spain
- Figure 15: Hnw Investors In Spain Are Less Financially Sophisticated Than The Average European Hnw Investor
- Figure 16: Hnw Investors In Spain Place Less Emphasis On Personal Recommendations Than The Average European Hnw Investor
- Figure 17: Hnw Investors In Spain Are Fairly Loyal To Their Wealth Managers
- Figure 18: Clients In Spain Are More Likely To Change Their Wealth Manager Now Than Two Years Ago
- Figure 19: 87% Of Wealth Managers In Spain Have Had A Relationship With Their Clients For More Than Five Years On Average
- Figure 20: 32% Of Hnw Clients In Spain Have Just One Wealth Manager
- Figure 21: Strengthening Product Range Will Be The Key Driver Of Revenue Growth In The Next Two Years For Wealth Managers In Spain
- Figure 22: Increasing Face-To-Face Contact Is The Most Effective Means Of Increasing Share Of Hnw Wallet In Spain
- Figure 23: Cash Management Services Offer The Greatest Business Potential For Wealth Managers In Spain During The Next Two Years
- Figure 24: 60% Of Wealth Managers In Spain Are Planning To Focus Resources On The 'Financial Planning' Product Area Over The Next Two Years
- Figure 25: Personal Relationship Is The Primary Influence Over A Client's Choice Of Wealth Manager In Spain
- Figure 26: Referrals From Existing Clients And Intermediaries Are The Most Effective Customer Acquisition Techniques For Wealth Managers In Spain
- Figure 27: Inadequate Investment Performance Is The Most Likely Reason For Clients To Leave A Wealth Manager In Spain
- Figure 28: Providing Lending As Well As Asset Management Is The Most Effective Means Of Retaining Hnw Customers In Spain