Filipino HNW investors are mainly drawn from affluent families, being owners of successful and longstanding business empires. Newer entrepreneurial and high-earning individuals have begun to reshape the market along more typically Asia Pacific lines, mainly due to the accumulation of wealth and entrepreneurialism among individuals in manufacturing, construction, and retail. The Philippines increased identity as a business process outsourcing hub has dramatically changed the countrys expat profile. In general, given the strong economic performance in recent years and a positive outlook off the back of huge new infrastructure investments being made by the new Duterte government, the HNW segment is showing strong risk appetite and generally favors classic investments such as equities and bonds.
A greater proportion of Filipino wealth comes from family business ownership and entrepreneurism than the rest of Asia Pacific.
The countrys increased role as a business process outsourcing hub means the HNW expat profile has changed dramatically.
Broad asset allocation is dominated by high growth equities, and this will remain the case.
Filipino HNW investors value professional advice but like to maintain control of investment decisions.
Demand is and will remain strong for pension planning services and margin loans with which to broaden exposure to the stock market.
Verdict Financials Wealth in the Philippines: HNW Investors 2016 analyzes the Filipino wealth management market, with a focus on the HNW segments demographics, investment preferences, and services demand. The report is based on our proprietary survey of wealth managers.
Specifically the report:
Profiles the average Filipino HNW investor in terms of their demographics and analyzes the expat opportunity in the Philippines.
Analyzes which wealth management mandates are preferred among Filipino HNW investors and how demand will develop going forward.
Examines the allocation of Filipino HNW investors portfolios into different asset classes and how this is expected to develop in the future.
Analyzes product and service demand among Filipino HNW investors.
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 drivers for seeking investment advice vs. self-directing.
Tailor your investment product portfolio to match current and future demand for different asset classes among HNW individuals.
Develop your service proposition to match the product and service demand expressed by Filipino HNW investors and react proactively to the forecasted change in demand.
Table of Contents
HNW wealth in the Philippines is still very much a family affair, but the landscape is changing
Critical success factors
PROFILING THE FILIPINO HNW INVESTOR
Family business owners account for much of the wealth in the Philippines
A greater proportion of Filipino wealth comes from family business ownership and entrepreneurism than the rest of Asia Pacific
The financial services and property sectors are beginning to feature as a source of HNW wealth
ASEAN membership, strong links with the West, and AEC integration bode well for the HNW Filipino expat market
Low barriers to settling have traditionally been a draw for retirees
The country's increased role as a business process outsourcing hub has meant the HNW expat profile has changed dramatically
The expat market is well-diversified geographically
Regional banks and wealth managers currently have the edge within the Philippine market
Wealth managers need to strengthen their expat offerings if they want to hold on to expat portfolios
FILIPINO HNW INVESTMENT STYLE PREFERENCES
Filipino HNW investors value professional advice and control over their investments
Better returns motivate HNW investors to seek professional advice
The largest proportion of HNW wealth is kept in advisory mandates
Despite some increase in financial sophistication, Filipino demand for all mandate types lags behind Asia Pacific
Demand for all asset management will rise, with execution-only recording the greatest increase
HNW investors' desire for control is the main driver of self-investment
Wealth managers should offer a full suite of asset management styles
UNDERSTANDING ASSET ALLOCATION TRENDS AMONG HNW FILIPINO INDIVIDUALS
Broad asset allocation is dominated by high growth equities and bonds
Equities and bonds account for the bulk of the HNW portfolio in the Philippines
Nearly two thirds of Filipino HNW equity allocations are held directly
Bond holdings are well above the regional average and must be watched
Cash and near-cash investments are below the regional average
Property forms a very small part of Filipino HNW investment portfolios
Uptake of commodity and alternative investments is still nascent among Filipino HNW clients, but there are signs of life
The alternative investments market is showing signs of life
FILIPINO HNW PRODUCT AND SERVICE DEMAND
Demand is strongest for pension planning
Other planning services are not sought after in the Philippines
Demand for all planning services is forecast to increase over the next two years
Demand for margin loans is on the rise
Filipino HNW investors are open to adding leverage to their portfolio
Demand for both investment property advice and margin loans will see a boost over the next two years
Abbreviations and acronyms
Verdict Financial's 2015 Global Wealth Managers Survey
About Verdict Financial
List of Figures
Figure 1: The largest proportion of Filipino HNW assets are still held by family business owners
Figure 2: Retail and wholesale dominate as sources of wealth, although the country has become more diversified
Figure 3: The Philippines' HNW expat community are mainly short-term residents
Figure 4: Hong Kong has come to dominate the expat pool in the Philippines
Figure 5: Philam Life's Money Tree Elite is geared towards wealth building, not just preservation
Figure 6: HNW expats residing in the Philippines want to stay in control of their investments
Figure 7: Better returns drive Filipino HNW investors to opt for professionals
Figure 8: Filipino HNW wealth is relatively evenly distributed across mandate types
Figure 9: Local Filipino providers are experiencing low demand across all mandates
Figure 10: All mandates will go from strength to strength over the next two years
Figure 11: Filipino HNW investors' desire for control is what drives them to self-direct
Figure 12: HNW investors are heavily exposed to bonds and equities
Figure 13: Equity has been a leading draw for HNW wealth in the Philippines
Figure 14: Rebounding stocks will drive interest in equities to new highs
Figure 15: Bonds account for almost 50% of the Philippines HNW portfolio
Figure 16: Many wealth managers expect bond demand to increase over the next 12 months
Figure 17: Filipino investors keep cash allocations very low compared to Asia Pacific
Figure 18: The majority of wealth managers expect HNW demand for cash products to decrease
Figure 19: Property does not figure prominently in the Filipino HNW investment portfolio
Figure 20: Capital appreciation and asset diversification fuel HNW demand for property
Figure 21: Pension planning is strongly in demand among Filipino HNW investors
Figure 22: HNW demand for planning services is forecast to increase significantly
Figure 23: Filipinos are showing strong demand for margin loans
Figure 24: Forecasts for investment property advice and margin loan demand are high
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