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грегор еразім
грегор еразім
грегор еразім
грегор еразім
грегор еразім
грегор еразім
грегор еразім
грегор еразім
грегор еразім
грегор еразім
грегор еразім
грегор еразім
грегор еразім
грегор еразім
грегор еразім
грегор еразім
грегор еразім
грегор еразім
грегор еразім
грегор еразім
грегор еразім
грегор еразім
грегор еразім
грегор еразім
грегор еразім
грегор еразім
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грегор еразім

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  • The rapid meltdown in equities in 2008 occurred amid record levels of volatility, but that volatility plunged in 2009. The Daily Volatility of DJ World Index had sunk to 1.30% by end-2009 from 2.48% at the beginning of the year and 2.56% at its peak in mid-September 2008. In early-2010, volatility has declined further, as crisis fears have continued to fade, though as of June 9th data, volatility levels still remained above those seen during the Asian financial crisis, after the September 11th terrorist attacks in the U.S. and the Russian Crisis. A sharp increase in volatility levels again was seen starting from early May 2010, as the crisis in Greece moved to the center stage of the world economy raising fears of default in more European nations, as this would in turn undermine the global economic recovery.
  • Now, let’s take a look at geographic allocation of assets for HNWIs from some of the regions.In 2009, European HNWIs had 41% of their holdings in investments outside Europe, up 6 percentage points from 2008, marking the largest such shift.The underlying trend was similar among HNWIs in North America, who reduced their home-region holdings by 5 percentage points to 76%.By 2011, HNWIs from North America and Europe are expected to further decrease allocations to home-region by more than 8 percentage pointsThe home-region allocation by HNWIs in North America is expected to drop to 68% from 76% in 2009 and 81% in 2008HNWIs in Europe are expected by 2011 to have shifted their home-region allocations to 48% of all assets from 59% in 2009 and 65% in 2008While HNWIs from the mature economic regions of North America and Europe are expected to continue increasing their allocations to Asia-Pacific in search of higher returns, HNWIs in Europe are also likely to increase their North American holdings to inject stability into their portfolios
  • Last year, HNWI clients indicated they had lost quite a bit of trust in their advisors, wealth management firm, the markets, and the regulatory bodies. This year, HNWI Clients indicated that they have regained trust in their Advisors and Firms, but still are doubtful of the markets, but trust in Regulatory Bodies and Financial Markets has yet to recover fully Let me explain the charts - chart on the left side was the situation in 2008 in terms of HNWIs loss of trust. The chart on the right side is the current situation in terms of how much of that trust have they regained. In 2009, much trust has been regained as 59% of HNWI’s surveyed regained trust in their advisors and 56% in their firms (These are not necessarily Merrill clients)71% of the total HNWIs surveyed still lack trust in the regulatory bodies (Again, these are not necessarily Merrill clients)What this means for wealth management firms and advisors is a client that is much more cautious and is behaving differently after the financial crises, despite some of the market rebounds. These behavioral changes are likely to have long-term implications for firms.
  • Now lets talk about the HNWI allocation within the passion investments categoriesThere were several stark differences noticed in the allocation to passion investments categories during 2009:Luxury Collectibles remained the most preferred choice of passion investments., with an increase from 30% to 27% in the last year. Art decreased 3 percentage points while allocation overall, but still remained the number one allocation for Ultra-HNW>Even through the worldwide auction market saw declines of about 44% in 2009, thre were positive signs emerging from the latest auctions in the last quarter of 2009.Jewelry, Gems & Watches saw a renewed increase in allocation with most significant increases being recorded from Middle East and Asia Pacific ex. Japan HNWIsOther Collectibles and Sports investments also saw a slight increase over 2008 allocation
  • One of the interesting findings this year is around HNW who purchase passion investments for future financial gain. Art and “Other Collectibles” ( wine, coins, memorabilia etc) were the two categories that HNWI perceived to have tangible long-term value,and are most widely considered as other forms of financial investments.While all regions voted Art the highest, European HNWIs came across as the ones who were most likely to invest in Art for financial benefitsSimilarly, Other Collectibles ,also ranked high as a secondary category utilized also for financial benefit -- but North American HNWIs invested in Other Collectibles such as wine, antiques, coins etc for financial reasons at the highest level.As HNWI investors continue to remain cautious around financial markets, “investor-collectors” in passion investments is an interesting trend.
  • Moving onto Lifestyle spending we witnessed a continued increasing trend on health and wellness spending. Spending on Luxury / Experiential travel also increased.HNWI purchases of luxury consumables, meanwhile, varied across the globe. In North America, HNWIs had reduced such spending, but in emerging markets such as China and Brazil, HNWI spending on luxury consumables was reportedly on the rise in the latter half of 2009.
  • Now lets talk about the HNWI allocations to Philanthropic activities.In 2009, HNWI allocations to philanthropic activities increased in all regions except North America. Most HNWIs sited the primary reasons for their engagement in philanthropy as “Social Responsibility”. However, what is new is the demand for philanthropic offerings from HNWclients. The primary areas they want help on is “Advice on financial and Tax Planning”, and “Organization and Project Selection” , as well as Monitoring and Impact Assessment.
  • Transcript

    • 1.
    • 2. Gregor Erasim
      Vice President,
      Global Financial Services
      Capgemini
    • 3. Market Sizing and Growth
    • 4. Globally, the number of HNWIs increased 17.1% in 2009 to 10.0m, led by sharp increases in Asia-Pacific and North-America
      Number of HNWIs by Region (Millions), 2006-2009
      Annual Change 2008 - 2009
      Growth (08-09): 17.1%
      CAGR (06-08): -5.0%
      Total 10.1 m
      Total 10.0 m
      13.2%
      Africa
      Total 9.5 m
      Total 8.6 m
      7.1%
      Middle East
      Latin America
      8.3%
      25.8%
      Asia-Pacific
      12.5%
      Europe
      NorthAmerica
      16.6%
      Globally, the number of HNWIs nearly returned to 2007 levels, with Asia-Pacific region catching up with Europe in terms of the number of HNWIs.
      Source: Capgemini Lorenz curve analysis, 2010
      Note: Chart numbers may not add up due to rounding
    • 5. A similar growth pattern was evident for HNWI Financial Wealth, which saw a 18.9% rise in 2009 to $39.0T from $32.8T in 2008
      HNWI Financial Wealth by Region ($ USD Trillions), 2006-2009
      Growth (08-09): 18.9%
      CAGR (06-08): -6.2%
      Annual Change 2008 - 2009
      Total 40.7 T
      Total 39.0 T
      Total 37.2 T
      20.2%
      Africa
      Total 32.8 T
      5.1%
      Middle East
      Latin America
      15.0%
      30.9%
      Asia-Pacific
      14.2%
      Europe
      NorthAmerica
      17.8%
      In 2009, Latin America and Asia-Pacific were the only regions to exceed the 2007 HNWI wealth level, with Asia-Pacific surpassing Europe in HNWI wealth
      Source: Capgemini Lorenz curve analysis, 2010
      Note: Chart numbers may not add up due to rounding
    • 6. In 2009, 8 out of the 10 countries with highest growth in HNWI population were from the Asia-Pacific region
      Country Specific Commentary
      Notable Countries with High HNWI Population Growth (%), 2008-09
      Hong Kong:
      • After a fall of approximately 50% in 2008, the Hong Kong stock exchange rebounded strongly (up 73.5%) in 2009
      • 7. A large percentage of HNWIs who had dropped into the “mass affluent” band in 2008, returned back to the $1mn+ wealth band in 2009
      India:
      • In 2009, Indian stock markets more than doubled
      • 8. The economic outlook of India was very strong, growing nearly 7% during this period
      Israel:
      • Israel was the third highest gainer of HNWI population in 2009, driven by high growth in stock market (40%) and real estate prices (15.5%)
      China:
      • Chinese stock market grew over 100%
      • 9. Chinese economy grew at 8.3%
      Singapore:
      • Singapore stock exchange grew by 81.6%
      In-spite of this dramatic growth HNWI population in 2009 was only 79% of the HNWI population in 2007
      All nine of these countries surpassed 2007 HNWI population levels
      HNWI population in Hong Kong and India increased significantly in 2009, after they experienced the highest drop in HNWI population in 2008.
      Source: Capgemini Lorenz curve analysis, 2010; (2) EIU, February 2010; (3) World Federation of Exchanges, 2010;
      Note: GDP refers to nominal GDP
    • 10. The global HNWI population still remains concentrated with the top three markets accounting for 53.5% of global HNWIs
      HNWI Population by Country (k) , 2008 - 2009
      53.5% of total worldwide HNWI population (54% in 2008)
      Australia moved back to 10th position by overtaking Brazil.
      2008 Ranks
      1
      2
      3
      4
      5
      6
      7
      8
      9
      11
      10
      12
      HNWI growth
      Rate(%)
      2008-2009
      16.5%
      20.8%
      6.4%
      31.0%
      23.8%
      10.8%
      17.9%
      19.7%
      9.2%
      34.4%
      11.9%
      12.5%
      The top 12 countries by HNWI Population remain the same from 2008, but countries from Asia-Pacific have higher growth rates compared to other regions.
      Source: Capgemini Lorenz curve analysis, 2010
    • 11. Real GDP Growth Rates (%),
      2008-2009
      Percent Change (%)
      North
      America
      Latin America
      Western Europe
      Asia Pacific
      Eastern
      Europe
      However, China and India avoided the trend with strong GDP growth in both 2008 and 2009.
      GDP Contracted in the Majority of the Countries in 2009, Highlighting a Strong Economic Interdependence Worldwide
      Source: Economist Intelligence Unit – April 2010. Real GDP variation over previous year.
    • 12. Global Market Capitalization Rose Nearly 47% in 2009, and Reached $47.9 Trillion
      Market Capitalization by Region (USD Trillions), 2002 - 2009
      CAGR (’07-’08)
      (48.6%)
      CAGR (’08-’09)
      47.1%
      CAGR (’02-’07)
      22.7%
      63.4
      52.2
      USD Trillions
      47.9
      42.9
      37.6
      Asia Pacific
      31.5
      32.6
      22.8
      Europe / Middle East / Africa
      Americas
      Global markets lost the last five years of growth in 2008, but they rebounded in 2009 across all regions and recovered nearly three years of growth.
      Source:World Federation of Exchanges, January 2010
    • 13. After Reaching Record Highs in 2008, Volatility Levels Plunged Sharply in 2009
      Commentary
      Daily Volatility of DJ World Index a, January 1997 – June 2010
      • The daily volatility peaked to 1.11% in Oct 1998, during the Russian Financial Crisis (right after the crisis in Asia)
      • 14. As the tech bubble reached its trough, the daily volatility peaked again, to 1.25%, before dropping back to 0.5% in 2004
      • 15. During the summer of 2007, the index started an upward trend that skyrocketed in mid-September 2008 to reach 2.56%, more than double the values of previous crises
      • 16. Volatility levels were at 2.48% at the beginning of 2009, but plunged sharply in 2009 and ended the year at 1.30%
      • 17. There is a very high correlation between this measure and the Chicago Board of Exchange (CBOE) VIX index, which is also known as the “fear” index and is based on the implicit volatility in options pricing
      Q4
      2008
      Sept 11,
      2001
      Asian Debt Crisis
      June 2010
      Tech
      Bubble
      Russian
      Crisis
      Daily Volatility of DJ World Index (%)
      Although volatility levels dropped significantly in 2009, they still remain above the highs reached during previous crises over the last decade.
      Source:Dow Jones World (W1) Index – Daily close values from January 1st, 1997 to June 9th, 2010
      a. As calculated by Capgemini
    • 18. Key Findings – Market Sizing & Growth
      • In 2009, HNWI population and wealth nearly returned to 2007 levels:
      • 19. In 2009, the world’s high net worth individual (HNWI) population increased by 17.1% to 10.0m and their wealth increased by18.9% to US$39.0T from 2008 levels.
      • 20. The Asia-Pacific region caught up with Europe in terms of HNWI population, while the Asia-Pacific HNWI wealth surpassed the HNWI wealth in Europe
      • 21. Global HNWI population remains highlyconcentrated:
      • 22. In 2009, the U.S, Japan and Germany still accounted for 53.5% of the world’s HNWI population, down slightly from 2008.
      • 23. The spillovers from the global financial crisis negatively affected GDP growth in 2009 and governments worldwide stepped up efforts to stimulate economic recovery and boost the financial system
      • 24. Key drivers of wealth such as Market Capitalization, Commodities, Hedge Funds had a year of strong gains
      • 25. Going forward a sustained economic recovery remains a cause of concern:
      • 26. World GDP growth is likely to be positive in 2010-11 and is expected to be led by Asia-Pacific (ex Japan). However, policymakers across the world are working on formulating viable government stimulus exit strategies. 
      Note: (a) HNWIs hold at least US$1 million in financial assets excluding primary residences, collectibles, consumables, and consumer durables
      (b) Ultra-HNWIs hold at least US$30 million in financial assets excluding primary residences, collectibles, consumables, and consumer durables
    • 27. Asset Allocation
    • 28. After 2008, HNWI allocations to cash dropped back to 2007 levels as proportion of their assets held in Fixed Income and Equities rose
      Breakdown of HNWI Financial Assets (%), 2006 to 2011F
      Key Points
      Alternative
      Investments a
      • Fixed Income allocations increased as HNWIs continued to place greater emphasis on predictable cash flows:
      • 29. Barclays Capital Global Aggregate Bond Index retuned 9% since December 2008.
      • 30. The proportion of HNWI assets held in equities in 2009 increased slightly as stock markets across regions rebounded:
      • 31. Stock markets recovered in most of the countries and global market capitalization rose to $47.9 trillion in 2009 from $32.6 trillion in 2008, a growth of nearly 47%
      • 32. Allocations to Cash/Deposits decreased as HNWIs preferred investments in Fixed Income and Equities with a view of recouping some of the losses made in 2008
      Real Estate b
      Cash / Deposits
      Fixed Income
      Equities
      By 2011, HNWI allocations to Equities is expected to increase an additional six percentage points as HNWIs regain their risk appetite and confidence in markets.
      a. Includes structured products, hedge funds, derivatives, foreign currency, commodities, private equity, venture capital
      b. Comprises commercial real estate, real estate investment trusts (REITs), residential real estate (excluding primary residence), undeveloped property, farmland and other
      Source:March 2007, April 2008 , March 2009 and March 2010 Capgemini/ Merrill Lynch FA survey; World Federation of Exchanges, March 2010; Bloomberg Businessweek, Money Report, March 2010
    • 33. Proportion of HNWI assets held in Equities was highest in North America while that held in Real Estate was highest in Asia-Pacific ex. Japan
      Breakdown of HNWI Financial Assets by Region (%), 2009
      Key Points
      • In North America, equity holdings edged up from 34% of total holdings in 2008 to 36% in 2009 as stock values rose
      • 34. Asia-Pacific ex. Japan HNWIs increased allocations to Real Estate:
      • 35. Direct real estate investment in the region jumped 56% y-o-y in the second half of 2009 to an estimated US$25 billion
      • 36. In Europe equity holdings increased to 26% from 21% in 2008 as stock values rose:
      • 37. European stock market capitalization grew by 38%
      • 38. Middle East allocation that traditionally focus on Real-Estate, decreased allocation from 25% in 2008 to 23% as hotspots such as Dubai witnessed a major slump in demand
      Alternative
      Investments a
      Real Estate b
      Cash/
      Deposits
      Fixed Income
      Equities
      HNWIs from Latin America and Japan were the most conservative, allocating in excess of 52% to Cash/Deposits and Fixed Income, despite rebound in markets.
      a. Includes structured products, hedge funds, derivatives, foreign currency, commodities, private equity, venture capital.
      b. Comprises commercial real estate, real estate investment trusts (REITs), residential real estate (excluding primary residence), undeveloped property, farmland and other
      Source: March 2010 Capgemini/ Merrill Lynch FA survey ; Asia Investment Market View 2H 2009, CBRE Research, Asia, CB Richard Ellis, Accessed March 2010
    • 39. HNWI geographic allocations to North America and Europe decreased in 2009, while those to Asia-Pacific and Latin America increased
      Africa
      Middle East
      Latin America
      Asia-Pacific
      Europe
      North America
      Breakdown of HNWI Geographic Asset Allocation (%), 2006 - 2011F
      Key Points
      • In 2009, HNWIs increased allocation to emerging markets in search of higher returns and diversification of portfolios:
      • 40. Allocation to Asia-Pacific increased by 3 percentage points and Latin America increased by 2 percentage points from 2009 to 2011 as the equity markets in these regions grew by 38% and 94% respectively
      • 41. From 2009 to 2011, allocation to all other regions are expected to remain stable except Asia-Pacific and Europe:
      • 42. Allocation to Europe is expected to decrease by 3 percentage points
      • 43. Allocation to Asia-Pacific is expected to increase by 3 percentage points
      In 2011, due to the prospects of rapid growth and higher returns, Asia-Pacific is expected to surpass Europe as a HNWI investment destination.
      Source: March 2007, April 2008, March 2009 and March 2010 Capgemini/ Merrill Lynch FA survey; World Federation of Exchanges, March 2010
    • 44. Africa
      Africa
      Middle East
      Middle East
      Latin America
      Latin America
      Asia Pacific
      Asia Pacific
      Europe
      Europe
      North America
      North America
      By 2011, HNWIs from North America and Europe are expected to decrease allocations to home-region by more than 8 percentage points
      Breakdown of Predicted HNWI Geographic Allocation by Region (%), 2006 - 2011F
      Europe
      North America
      Key Points
      Key Points
      • North American HNWIs are expected to decrease their allocations to home-regions by 8 percentage points:
      • 45. Allocations to Asia-Pacific region is expected to increase by 5 percentage points in search of higher returns
      • 46. European HNWIs are expected to decrease their allocations to home-regions by 9 percentage points:
      • 47. Allocations to Asia-Pacific region is expected to increase by 4 percentage points in search of higher returns
      • 48. Allocations to North American region is expected to increase by 4 percentage points in search of stable returns
      Note: Data for the Middle East not depicted, however trend remains same
      Source: March 2007, April 2008, March 2009 and March 2010 Capgemini/ Merrill Lynch FA survey
    • 49. Key Findings – Asset Allocation
      • Post the financial crisis, HNWIsa slowly reduced their holdings in Cash/Deposits as allocation to Fixed Income increased:
      • 50. Fixed Income allocation rose to 31% in 2009 from 29% in 2008 as HNWIs exercised some degree of caution and placed greater emphasis on predictable income streams.
      • 51. Globally, equities accounted for 29% of total HNWI financial assets at the end of 2009, up from 25% a year earlier as many of the world's stock markets recovered sharply.
      • 52. HNWIs increased their allocations to markets outside their home regions in search of higher returns and geographic diversification of their portfolios:
      • 53. Europe, with a 6 percentage point growth, had largest the largest increase in allocations to markets outside the home region, while for North America and Asia-Pacific the increase in allocations were 5 and 4 percentage points respectively.
      • 54. Looking forward to 2011, the trend of geographic distribution of assets is likely to continue while allocations to Equities is expected to increase across regions
      Note: a HNWIs hold at least US$1 million in financial assets excluding primary residences, collectibles, consumables, and consumer durables
    • 55. Spotlight
    • 56. Key Findings – Changes in HNW Investor Psyche Post Crises
      • While financial markets have rebounded to a degree, HNWI clients have emerged more cautious and conservative manner, yet are much more engaged in their financial affairs after the crises. However their investment decisions are driven much more from emotional than intellectual factors.
      • 57. Trust has been regained to a degree in advisors and wealth management firms, but a large majority of HNWIs have yet to regain trust in the regulatory bodies that were supposed to be monitoring the markets, which impacts the willingness to invest fully in the markets.
      • 58. HNWI investment decisions are now being driven much more emotionally than intellectually, with many investors not yet ready to take on the same risk as they did prior to the crises
      • 59. HNWIs are educating themselves about products, understanding disclosures, and investment risks before conferring with their advisors, and are seeking more specialized advice, greater transparency & simplicity and effective risk management capabilities from their wealth management firms.
      Source: Capgemini Research 2010;
    • 60. While HNWI Clientshaveregained trust in their Advisors and Firms, their trust in Regulatory Bodies and Financial Markets has yet to recover fully
      Agreement of HNWI Clients ‘Losing Trust’ and Confidence in the Following Entities, 2008
      Agreement of HNWI Clients ‘Regaining Trust’
      and Confidence in the Following Entities, 2009
      32%
      FinancialAdvisor
      59%
      47%
      16%
      FinancialAdvisor
      Wealth Management Firm
      29%
      56%
      17%
      48%
      Wealth Management Firm
      23%
      Financial Markets
      36%
      67%
      Financial Markets
      47%
      Regulatory Bodies & Institutions
      Regulatory Bodies & Institutions
      17%
      11%
      71%
      83%
      Despite the improved trust and confidence in Advisors and Firms, HNWIs have undergone major behavioral changes, which are likely to have long-term implications.
      Source: Capgemini/Merrill Lynch Client Survey 2010
      Note 1) Total for each category may not add to 100% as the percentage of respondents with neutral answers has been excluded
      Note 2) Survey asked, ‘To what extent do you agree or disagree with the following statements around your current base of HNWI and Ultra-HNWI clients?’ (Please rate each criterion on a scale of 1-7, 7 being extremely important and 1 being not at all important)
    • 61. Passion Investments & Philanthropy
    • 62. HNWI allocation to Luxury Collectibles grew to 30% in 2009, while allocation to Art Collections decreased to 22%
      HNWI Allocation to Passion Investments (%), 2006-2009
      Commentary
      • Luxury collectibles market rebounded as jets, cars, and yachts saw an increase in demand again, particularly from Asia
      • 63. The Art market slowly returned to activity with successful art auctions in the latter part of 2009
      • 64. Allocation to Jewelry, Gems and Watches grew to 23% amidst inflation fears as cash flush HNWI bought more in this category
      • 65. Allocation to Other Collectibles (Wines, Antiques, Coins, etc.) grew to 14%:
      • 66. The Fine Wine Exchange, Live-ex 100 index, which tracks the price of 100 of the world’s best investment grade wines rose 15.7% during the whole of 2009
      Miscellaneousa
      Sports Investmentsb
      Other Collectiblesc
      Jewelry, Gems & Watches
      Art
      Luxury Collectiblesd
      Pre-crisis
      a “Miscellaneous” represents club memberships, travel, guns, musical instruments etc.
      b “Sports Investments” represents sports teams, sailing, race horses, etc.
      c “Other Collectibles” represents coins, wine, antiques, etc.
      d “Luxury Collectibles” represents automobiles, boats, jets, etc.
      eSurvey Question: Please provide a representative PERCENTAGE breakdown of how your HNWI and UHNWI clients allocate their assets across Investments of Passion (IoP)
      Source: March 2010 Capgemini /Merrill Lynch Wealth Management Financial Advisor Survey; “Car Auctions bring in $122.6 million despite storms, recession” – Peter Corbett, The Arizona Republic, January 26, 2010;
    • 67. Art and Other Collectibles are most widely considered as another form of financial investment
      Commentary
      Categories that HNWIs Considered Another Form of Financial Investments (%), 2009
      • Art and “Other Collectibles” were the most popular categories which wealthy considered as other forms of financial investment:
      • 68. Nearly 30% of global HNWI are investing in Art for financial benefits, or as a Financial Asset.
      • 69. Europeans predominate in this area at 37.4% of HNWI considering Art as a Financial Asset.
      • 70. North America HNWI more widely consider Other Collectibles such as Wine, Antiques, Coins etc as another form of financial investments.
      a. Passion investments include the categories of Luxury Collectibles,Art Collections, Jewelry, Gems and Watches, Sports Investments and others ; b. Survey Question: Which categories among the following are considered by your HNWI clients as another form of investment (with the expectations of higher returns at a future sale)?
      Source: March 2010 Capgemini /Merrill Lynch Wealth Management Financial Advisor Survey; Robert Frank, “The Wealth Report: Flatt Wine Auction Reaps Nearly $1.2 Million at Sotheby’s”, March 22, 2010; Evelyn Wiese: “How to buy a sports team?” Worth – Grow Wealth Management
    • 71.
      • Towards the end of 2009, the market for collectibles such as Art, Wine and Luxury cars rebounded with successful auctions in Europe and North America:
      • 72. While Art still remained a top category for UHNWI, the category overall experienced a slight decrease in allocation from 25% to 22%, as prices for contemporary art dropped in 2009.
      • 73. Globally, HNWIs increased their allocation to Luxury Collectibles (yachts, cars, jets) by 3 percentage points over 2008.
      • 74. Art and Other Collectibles emerged as the most popular categories for High Net Worth Individuals investing for financial reasons.
      • 75. Continuing on the trend witnessed in 2008, HNWI spending on Health and Wellness continued to rise in 2009, while Luxury spending decreased:
      • 76. In 2009, as HNWIs increased their allocations to philanthropic activities, there was corresponding HNWI demand for Philanthropic offerings from their Wealth Management firms.
      • 77. Philanthropic giving is expected to grow across nearly all regions by 2010, except for North America, which has a mixed outlook.
      Key Findings – Passion Investments and Philanthropy
    • 78. HNWI spending on Health and Wellness saw a renewed increase in 2009 while that on luxury consumables decreased
      Commentary
      HNWIs Lifestyle Spending (%), 2009
      • Continuing from 2008 trend, the Health and Wellness category (which includes activities such as high-end spa visits, fitness-equipment installations, and preventative medicine procedures) saw a further rise in the HNWI spending in 2009, with N. America and Asians spending the most
      • 79. Luxury and Experiential Travel saw an increase in spending, with the majority of increase coming from Asia and Latin America
      • 80. The overall sales of luxury goods globally declined 8% to about $227 billion in 2009, and correspondingly 28% of HNWI indicate they are spending less on the Luxury Consumables (designer bags, clothes, shoes,) category:
      • 81. While most markets remain cautious, spending on luxury consumables in countries such as China and India is on the rise.
      73%
      Health / Wellness
      2%
      Luxury Experiential travel
      45%
      23%
      Luxury Consumables
      30%
      28%
      25%
      Other Spending
      20%
      a. Total for the chart will not add to 100% due to some % to Neutral choice
      b. Survey Question: To what extent did your HNWI and UHNWI clients increase their spend on the following lifestyle categories over the last year?
      Source: March 2010 Capgemini /Merrill Lynch Wealth Management Financial Advisor Survey; Robert Frank, “The Wealth Report: Chinese are the new kings of blings”, October 13, 2009; Matthew Vincent, “FT Wealth: A Return to luxury”, March 25, 2010
    • 82. In 2009, as HNWIs increased their allocations to philanthropic activities, there was significant demand for Philanthropic offerings
      Client Demand for Specific Philanthropy Offerings (%), 2009
      Regionally, HNWIs from North America and Asia-Pacific expressed the highest demand for “Advice in financial tax planning”
      16%
      57%
      Advice on Financial planning and tax
      20%
      48%
      Project and Organization Selection
      19%
      46%
      Monitoring and impact assessment
      22%
      43%
      Setting up a “giving” vehicle
      20%
      20%
      Other Philanthropy Offerings
      Wealth management firms may need to offer specialization around philanthropic offerings by building expertise in-house or leveraging third party ventures.
      Note: Total for each philanthropic offering in the chart may not add to 100% as the percentage of respondents with Neutral answers have been excluded
      a. Survey Question: “How strong is HNWI client demand for the following philanthropy offerings? ”
      Source: March 2010 Capgemini/Merrill Lynch FA Survey

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