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Wealth in Poland: HNW Investors: Understanding HNW investors and wealth management strategies.

Published By :

Verdict Financial

Published Date : Jun 2016

Category :

Banking

No. of Pages : 45 Pages

The Polish HNW population is dominated by entrepreneurs who prefer to stay in control of their finances, even if they lack experience in capital markets. While they do approach wealth managers for investment advice, Polish HNW investors like to sign off most decisions regarding their portfolios. With the 200809 financial crisis fresh in mind, they focus on low-risk products which do not offer high margins to banks. Hence the main challenge for Polish competitors is developing a strong, trust-based relationship between advisors and clients. As clients begin to realize the added value of wealth management services, they will be more likely to shift their preferences towards equities or alternative asset classes, as well as pay for additional solutions such as tax or inheritance planning.

Key Findings

  • Almost 72% of Polish HNW individuals are entrepreneurs, with most running businesses they started themselves. Millionaires who inherited their fortunes are scarce.
  • Only 4.3% of HNW investors are expats, originating mostly from neighbouring Germany.
  • Although Polish HNW clients accept that they cant manage their portfolios without help, they still prefer advisory mandates and enjoy having the last word on any adjustments.
  • Polish HNW investors are risk-averse, allocating 56% of their assets to bonds or deposits.
  • Wealth managers expect their clients to show growing demand for alternatives, which are very under-represented in HNW portfolios compared to developed markets.
  • Securing a steady cash-flow for retirement is vital for Polish HNW individuals. Looking forward, 95% of wealth managers forecast growing demand for inheritance planning.

Synopsis

Verdict Financials Wealth in Poland: HNW Investors report analyzes the investing preferences and portfolio allocation of Polish HNW investors. The report is based on our proprietary Global Wealth Managers Survey.

Specifically the report:

  • Profiles the average Polish HNW investor in terms of the source of their wealth and age as well as analyzing the expat opportunity in Poland.
  • Analyzes which wealth management mandates are preferred among Polish HNW investors and how demand will develop looking forward.
  • Examines the allocation of Polish HNW investors portfolios into different asset classes and how allocation is expected to develop in the future.
  • Analyzes the product and service demand among Polish HNW investors.

ReasonsToBuy

  • 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 Polish HNW investors and react proactively to the forecasted change in demand.

Table of Contents

EXECUTIVE SUMMARY

The wealth management industry in Poland is still developing
Key findings
Critical success factors

PROFILING THE POLISH HNW INVESTOR
Businessmen dominate the Polish HNW population
Almost half of HNW investors in Poland are first-generation entrepreneurs
Many Polish millionaires source their wealth from the manufacturing industry
The HNW expat population in Poland is small
Only 4.3% of HNW investors in Poland originate from other countries
Most HNW expats come from developed economies

HNW INVESTMENT STYLE PREFERENCES
Polish HNW investors rely on their wealth managers' advice
Professional advisors are expected to be able to manage complex portfolios
Less than a third of Polish HNW assets are held in discretionary mandates
Demand for execution-only platforms is quite strong
Polish self-directed investors want to remain in control of their money and save on fees
Polish HNW investors will be increasingly switching to advised asset management
Wealth managers forecast a decrease in demand for execution-only platforms

UNDERSTANDING ASSET ALLOCATION TRENDS AMONG POLISH HNW INDIVIDUALS
Polish HNW investors remain risk-averse
The majority of HNW portfolios are invested in bonds and deposits
Equities constitute the high-risk share of HNW portfolios
28% of the average HNW portfolio is allocated to debt securities
Deposits are the largest component of Polish HNW investment portfolios
Demand for real estate investments will increase
Commodities are neglected by most HNW investors in Poland
Alternatives are underweight in Polish HNW portfolios

HNW PRODUCT AND SERVICE DEMAND
Demand for future planning services in Poland is on the rise
HNW investors are currently concerned about their pensions
However, succession planning will be increasingly important
Demand for tax and property advice is lower than in the wider region
Polish HNW investors seek tax advice from outside their private bank
In the future, provision of investment property and tax advice will be essential

APPENDIX
Abbreviations and acronyms
Definitions
Affluent
Mass affluent
HNW
Liquid assets
Methodology
Verdict Financial's 2015 Global Wealth Managers Survey
Exchange rates
Bibliography
Further reading
About Verdict Financial
Disclaimer

List of Table

Table 1: Contribution to GDP and average monthly salaries of selected industries in Poland
Table 2: Polish zloty-US dollar exchange rate, December 31, 2014 and December 31, 2015

 

List of Chart


Figure 1: Almost half of Polish HNW investors are first-generation entrepreneurs
Figure 2: The Citigold Private Client proposition includes access to a business advisor
Figure 3: More than a third of Polish HNW investors acquired their fortunes from property and real estate activities
Figure 4: There are more long-term HNW expats in Poland than in other Central and Eastern European markets
Figure 5: The majority of HNW expats in Poland originate from neighbouring Germany
Figure 6: Portfolio complexity and lack of time drive Polish HNW individuals' demand for professional advice
Figure 7: Advisory mandates are most popular among Polish HNW investors
Figure 8: 80.3% of Polish wealth managers experience strong demand for their execution-only platforms from HNW investors
Figure 9: Desire to maintain control over their portfolio drives self-directed investment in Poland
Figure 10: More than 61% of Polish wealth managers expect demand for execution-only asset management to decrease
Figure 11: mBank's discretionary asset management offers both model portfolios and individual strategies
Figure 12: Polish investors' allocations in bonds and deposits will decrease
Figure 13: More than 70% of Polish HNW equity holdings is allocated to funds
Figure 14: The vast majority of wealth managers forecast demand for equities to rise
Figure 15: Direct holdings are preferred by HNW clients investing in the bond market
Figure 16: Demand for bonds is expected to decrease significantly
Figure 17: Deposits constitute 29% of an average HNW portfolio in Poland
Figure 18: Polish HNW investors hold cash to maintain liquidity
Figure 19: Property allocations in Poland are above the regional and global average
Figure 20: Polish wealth managers expect increasing demand for property investments
Figure 21: Only 2% of Polish HNW assets are invested in commodities
Figure 22: 20% of wealth managers expect increased demand for commodities
Figure 23: Polish HNW investors' allocations in alternatives are divided between hedge funds, private equity, and structured products
Figure 24: The majority of Polish wealth managers expect increased interest in alternative investments
Figure 25: Almost 40% of Polish wealth managers experience weak demand for inheritance planning services
Figure 26: Demand for planning services in Poland is on the rise
Figure 27: Demand for property and tax advice in Poland is lower than in the wider region
Figure 28: HNW investors will be increasingly looking for real estate and tax advice

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