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HNW Targeting And Retention Strategies

Published on: May 2018 | From USD $5250 | Published By: GLOBAL DATA | Number Of Pages: 57

HNW Targeting and Retention Strategies


"HNW Targeting and Retention Strategies", report analyzes and sizes key segments of the global HNW market, and provides detailed recommendations how to best target and service these individuals. The report also provides a detailed discussion on the effectiveness of different HNW client retention strategies. It is based on our proprietary Global Wealth Managers Survey.

48% of HNW individuals are professionals, making them the largest target market, closely followed by entrepreneurs at 46%. While considerably smaller in size, providers will also find HNW expats an attractive segment thanks to their more complex affairs resulting in a greater need for wealth management services. Despite the above segments’ differing service requirements, we see very little difference when it comes to providers’ targeting strategies. While client referrals are the most successful means of acquisition, wealth managers should adopt a more differentiated approach. Providers targeting professionals will find external referrals an effective channel, while investment banking referrals will prove fruitful in the entrepreneur space.

Specifically the report -
- analyzes the size of the global HNW market and key client groups
- analyzes the proportion of HNW clients sourced via different client acquisition tools
- provides recommendations regarding the effectiveness of various acquisition tools across different target segments
- analyzes how to best service different HNW segments
- analyzes the effectiveness of different client retention strategies in the HNW space.


- 52.3% of global HNW investors reside in North America, but growth is more pronounced in Latin America, where the number of HNW individuals is forecast to grow by 48% between 2017 and 2021.
- Professionals make up 5 million individuals of the global HNW market, 4.8 million being entrepreneurs.
- 28.3% of HNW clients have been acquired through client referrals, making it the most successful channel.
- A longstanding advisor relationship is the most effective means of client retention, followed by portfolio performance and a firm’s brand image.

Reasons to buy

- Understand the size and service requirements of key client groups
- Develop and enhance your client targeting strategies using our proprietary data on the effectiveness of various targeting strategies across key target groups
- Minimize customer churn rates by gaining a detailed understanding of the effectiveness of different retention tools
- Tailor your product portfolio to match demand patterns across the different segments discussed
- Understand what selected competitors are doing to successfully reach out to different target groups.

Companies Mentioned are -
US Bank
BNP Paribas
Deutsche Bank
Morgan Stanley
China Construction Bank
Bank of China
Agricultural Bank of China
Wells Fargo
China Merchants Bank

Table of Contents
1.1. Professionals and entrepreneurs make up the vast majority of the 10.5 million-strong HNW population 1
1.2. Key findings 1
1.3. Critical success factors 1
2.1. North America is the largest target market, but growth can be found in Latin America and Asia Pacific 8
2.1.1. A comparatively high proportion of unadvised HNW wealth makes Asia Pacific an attractive target market 9
2.1.2. A focus on emerging markets promises rapid business growth, but reaching out to investors early on is paramount 11
2.2. Professionals constitute the largest target market, closely followed by entrepreneurs 11
2.2.1. Professionals constitute the largest target group globally 12
2.2.2. The entrepreneurial spirit runs high in Eastern Europe 13
2.2.3. HNW entrepreneurs are willing to expatriate to start their business ventures 16
2.2.4. While only constituting 11.4% of the global HNW population, the wider expat community also make for a lucrative target market in key hubs 17
2.3. The demographic profiles of key HNW segments differ only marginally, with the exception of inheritors 18
2.3.1. Female inheritors are an often overlooked segment 18
3.1. A high degree of competition calls for tailored acquisition strategies 20
3.2. Client referrals are the number one source of new business, followed by relationship managersÂ’ own contacts, and internal referrals 21
3.2.1. Generating positive word of mouth is paramount in the HNW space 21
3.2.2. Despite coming in second as a customer acquisition tool, internal referrals remain underutilized 23
3.2.3. The importance of relationship managersÂ’ own contacts as an acquisition tool calls for a greater focus on brand building 25
3.2.4. Cold-calling is not an effective means of reaching out to HNW individuals 26
3.3. Targeting professionals means leveraging cross-selling opportunities with the SME banking department 27
3.3.1. Professionals running small businesses will appreciate a wide array of lending products 27
3.3.2. Given professionalsÂ’ broader servicing needs, close collaboration with the SME banking team is critical 28
3.3.3. Providers targeting self-employed professionals should place greater attention on external partnerships 29
3.3.4. Internal partnerships are a critical channel of new business in markets where wealth is predominately held in the hands of the mass affluent 31
3.4. Investment banking referrals are critical when targeting entrepreneurs 32
3.4.1. Globally, 7.8% of HNW entrepreneur clients have been sourced through investment banking referrals 32
3.4.2. Partnerships with accelerators will allow wealth managers to target entrepreneurs at an early stage 33
3.4.3. Involving the next generation of business owners is a must in countries with an aging entrepreneurial community 34
3.5. International providers enjoy an advantage targeting expats, but domestic ones will find external referrals effective 36
3.5.1. Reaching out to expats pre-departure and establishing intra-country referral structures is critical 36
3.5.2. External partnerships are particularly important for domestically focused players 38
4.1. Advisors are critical in fostering loyalty 40
4.1.1. Having a CRM system in place minimizes the risk of client loss when a relationship manager leaves 41
4.1.2. Creating multiple client touchpoints within the organization reduces the reliance on a single advisor 42
4.2. Extensive brand-building efforts, an outstanding track record, and a wide service proposition all contribute to customer loyalty 42
4.2.1. While critical as a retention tool, the importance of a positive investment track also poses challenges in times of increased market volatility 42
4.2.2. Brand building on a corporate level has to be more of a focus 43
4.2.3. A broad product offering reduces the likelihood of clients reaching out to competitors 44
5.1. Abbreviations and acronyms 46
5.2. Definitions 46
5.2.1. Entrepreneur 46
5.2.2. Expat 46
5.2.3. HNW 46
5.2.4. Professional 46
5.3. Supplementary data 47
5.4. Methodology 52
5.4.1. GlobalDataÂ’s 2017 Global Wealth Managers Survey 52
5.4.2. GlobalDataÂ’s 2016 Global Wealth Managers Survey 52
5.4.3. GlobalData WealthInsight 52
5.4.4. Global Wealth Model methodology 53
5.4.5. Effectiveness score 53
5.4.6. Service level of demand score 53
5.4.1. Exchange rates 53
5.5. Bibliography 54
5.6. Further reading 55

List of Tables
Table 1: Asia Pacific: proportion of different HNW segments acquired by channel 48
Table 2: Europe: proportion of different HNW segments acquired by channel 49
Table 3: Rest of world: proportion of different HNW segments acquired by channel 50
Table 4: Asia Pacific: customer retention strategy effectiveness score by segment 51
Table 5: Europe: customer retention strategy effectives score by segment 51
Table 6: Rest of world: customer retention strategy effectives score by segment 51
Table 7: US dollar exchange rates with the euro 53

List of Figures
Figure 1: More than half of HNW investors can be found in North America 9
Figure 2: An above-average proportion of HNW wealth in Asia Pacific remains unmanaged 10
Figure 3: Those who sourced their wealth through earned income constitute 48% of HNW investors globally 12
Figure 4: South Africa is home to a large segment of HNW professionals 13
Figure 5: Eastern Europe is home to a sizable HNW entrepreneur community 14
Figure 6: Lenddo leverages digital data to assess credit risk 15
Figure 7: Business start-ups are the number one expatriation driver in the HNW space 16
Figure 8: DBS targets international entrepreneurs 17
Figure 9: The US is home to the largest number of HNW expats 18
Figure 10: 38% of HNW inheritors are female 19
Figure 11: Competition for HNW investors is fierce 21
Figure 12: Client referrals are the single most important source of new clients 22
Figure 13: BNP Paribas’ Hackathon event brings together entrepreneurs from all across the world 23
Figure 14: US Bank operates Optymyze Sales Application Studio to harvest internal referrals 25
Figure 15: A relationship manager’s own contacts are of particular importance in Canada 26
Figure 16: With the exception of France and Germany, cold calling is not widely adopted in the HNW space 27
Figure 17: CEOs and MDs make for a lucrative target market in Australia 29
Figure 18: 15.1% of HNW professionals have been acquired via partners’ referral programs 31
Figure 19: 7.8% of HNW entrepreneur customers have been sourced through investment banking referrals 33
Figure 20: Entrepreneurial intentions run high in the UAE 34
Figure 21: 85% of business owners in the US are 65 years of age or above 35
Figure 22: Credit Suisse targets the next generation of HNW investors early on 36
Figure 23: A mere 15% of new HNW expat clients have been sourced through retail banking referrals 37
Figure 24: Singapore attracts a significant international workforce 39
Figure 25: Advisors play a crucial role in fostering loyalty 40
Figure 26: A longstanding advisor relationship is the most important means of client retention 41
Figure 27: Portfolio performance as a means of client retention is of particular importance in the Netherlands 43
Figure 28: Chinese HNW investors place significant importance on brand image 44
Figure 29: For seven out of 10 private banking services demand exceeds supply 45

Secondary Research Information is collected from a number of publicly available as well as paid databases. Public sources involve publications by different associations and governments, annual reports and statements of companies, white papers and research publications by recognized industry experts and renowned academia etc. Paid data sources include third party authentic industry databases.

Once data collection is done through secondary research, primary interviews are conducted with different stakeholders across the value chain like manufacturers, distributors, ingredient/input suppliers, end customers and other key opinion leaders of the industry. Primary research is used both to validate the data points obtained from secondary research and to fill in the data gaps after secondary research.

The market engineering phase involves analyzing the data collected, market breakdown and forecasting. Macroeconomic indicators and bottom-up and top-down approaches are used to arrive at a complete set of data points that give way to valuable qualitative and quantitative insights. Each data point is verified by the process of data triangulation to validate the numbers and arrive at close estimates.

The market engineered data is verified and validated by a number of experts, both in-house and external.

After the data is curated by the mentioned highly sophisticated process, the analysts begin to write the report. Garnering insights from data and forecasts, insights are drawn to visualize the entire ecosystem in a single report.

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