Seizing the Global HNW Expat Opportunity
- Pages: 57
- Published: April 2018
- Report Code: FS0123IA
"Seizing the Global HNW Expat Opportunity", report sizes and analyzes the global HNW opportunity, and provides detailed recommendations on how to best target and service this segment. The report is based on our proprietary Global Wealth Managers Survey.
Expats constitute 11.4% of the global HNW population, equating to 1.2 million individuals. This represents a sizable (albeit competitive) target market, with the US home to the largest number of HNW expats. However, it is the UAE, Singapore, and Hong Kong where expats constitute the largest proportion of the resident HNW population and where competition is thus fiercest. Wealth managers with international operations are at an advantage, as they are able to start relationships pre-departure, but external referrals and focused targeting strategies will prove successful for locally-oriented players.
Specifically the report –
– Outlines the size and composition of the global HNW expat market.
– Analyzes which countries have been able to attract the largest proportions of HNW expats and why.
– Examines the motivations behind HNW individuals relocating to another country.
– Discusses the effectiveness of different targeting strategies in the HNW expat space.
– Details how to best service HNW expats.
– Explores the differences between long- and short-term expats in terms of service requirements and targeting strategies.
– The global HNW expat market grew from 1 million individuals in 2014 to 1.2 million in 2017.
– Expats who emigrated from Greater China and the Indian subcontinent make for the largest target markets of 175,524 and 167,955 individuals respectively.
– 60% of HNW expats have resided in their country of choice for five years or more. However, those who expatriated as part of a job transfer are less likely to migrate permanently.
– 40% of HNW expats migrated to start a business, while another 24% expatriated as part of a job transfer.
– 34% of HNW expats have been acquired via client referrals and contacts, and 20% via internal referrals.
Reasons to buy
– Identify key expat hubs and understand the level of competition intensity in these markets.
– Understand the size and service requirements of different diasporas across the world.
– Develop and enhance your client targeting strategies using our proprietary data on the effectiveness of various strategies in the HNW expat space.
– Give your marketing strategies the edge required and capture new clients using insights from our data on HNW investors’ reasons for expatriating.
– Tailor your product portfolio to match demand patterns across the different segments that make up the global HNW expat market.
– Understand how best to reach out to HNW expats pre- and post-departure.
– Understand how select competitors are successfully reaching out to HNW expats.
Bank of China
Abu Dhabi Commercial Bank
United Bank of India
Bank of Baroda
Table of Contents
Table of Contents
1. EXECUTIVE SUMMARY 2
1.1. HNW expats are a sizable but competitive client segment 2
1.2. Key findings 2
1.3. Critical success factors 2
2. THE HNW EXPAT OPPORTUNITY IS CONCENTRATED IN KEY HUBS 8
2.1. Defining the expat opportunity 8
2.2. Lenient visa requirements, stable economic conditions, and lifestyle benefits are attracting expats to key hubs 8
2.2.1. The UAE is the preferred destination among cashed-up investors, but competition is fierce 9
2.2.2. Strong labor markets and an abundance of international companies make Singapore and Hong Kong a natural choice 11
2.2.3. In relation to its locally-born HNW population Switzerland offers the largest expat opportunity in Europe, but the UK and Germany impress with sheer numbers 11
2.3. Targeting efforts begin in Asia, as more than half a million expats originate from the continent 12
2.3.1. Chinese expats’ higher likelihood to migrate permanently makes them an attractive target market 13
2.3.2. Bank of China is following Chinese migrants to the UK 13
2.3.3. Expats from the Indian subcontinent are a sizable target group with distinct servicing needs 14
2.3.4. Recent tax changes will drive already high demand for tax advice among US expats 17
2.3.5. UK expats show rising demand for properties in their country of origin despite growing regulatory pressure 19
3. UNDERSTANDING HNW EXPATS: 40% OF HNW MIGRANTS HAVE EXPATRIATED TO START A BUSINESS 21
3.1. Understanding motivations to migrate is critical, as the demographic profiles of HNW expats and residents are similar 21
3.1.1. Targeting female HNW expats has the potential to yield results 21
3.1.2. Factors other than demographics are more important to appeal to HNW expats 22
3.2. Expat entrepreneurs are a lucrative segment, but providers with offshore capabilities will also find professionals attractive 22
3.3. Offering business banking services is a must in the expat space 23
3.3.1. HNW investors looking to migrate to the US will appreciate support not just in setting up their business but in navigating complex migration laws 24
3.3.2. China and Hong Kong also attract a large number of HNW entrepreneurs 25
3.4. Those migrating as part of a job transfer also form a large segment, but they make for a less lucrative target group 26
3.4.1. Professionals are less likely to reside in their country of choice permanently 26
3.4.2. Providers targeting investors who migrated as part of job transfer need offshore capabilities 27
3.4.3. Offers such as Lloyds’ Premier International Account allow wealth managers to minimize the risk of the relationship being terminated when a client decides to expatriate 28
3.5. Expatriation drivers other than entrepreneurialism and job transfers are specific to the country of residence 29
3.5.1. Tax efficiency as a driver for expatriation is only relevant in a few countries 29
3.5.2. Despite the lack of income tax, tax advisory services are highly sought by expats in the UAE 30
3.5.3. Going forward, tax efficiencies as a driver for HNW migration are set to become less relevant in Canada, but demand for tax advice is set to remain strong 31
3.5.4. Pension advice has to be a key focus in Malaysia and the Philippines, as the countries are competing for cashed-up retirees 32
3.5.5. Switzerland is Europe’s number one retirement destination, but visa changes are making other countries more attractive 33
3.5.6. Targeting expat students will prove lucrative in countries with first-class education systems 33
4. TARGETING: REACHING OUT TO EXPATS PRE-DEPARTURE IS CRITICAL 35
4.1. Fierce competition in key expat markets calls for a differentiated targeting strategy 35
4.2. Generating positive word of mouth is critical 36
4.3. Greater emphasis should be placed on internal referrals 37
4.3.1. International players enjoy a distinct advantage in the expat space, but more has to be done 37
4.3.2. Wealth managers able to leverage internal referrals will be able to service clients more effectively 38
4.3.3. N26 Video-Ident allows for hassle-free account opening 39
4.4. External partnerships are particularly important for domestically-focused players 40
4.4.1. Partnerships with relocation companies allow wealth managers to offer a more holistic service proposition 41
4.4.2. Providing relocation services is of particular importance in less developed markets 42
4.4.3. Wealth managers in Singapore, the Netherlands, and Canada should consider partnerships with employers 43
4.5. The importance of a relationship manager’s own contacts as a source of new business means brand-building exercises are paramount 43
4.6. The best targeting efforts are to no avail if HNW expats terminate the relationship after repatriating 44
4.6.1. HNW expats in Australia, Switzerland, and Turkey are among the most unsettled, calling for a selective targeting strategy 44
4.6.2. Credit Suisse offers investment portfolios compliant with Australia’s Significant Investor Visa requirements 45
5. APPENDIX 46
5.1. Abbreviations and acronyms 46
5.2. Definitions 46
5.2.1. HNW 46
5.2.2. HNW expats 46
5.2.3. Liquid assets 46
5.3. Supplementary data 47
5.4. Methodology 53
5.4.1. GlobalData’s 2017 Global Wealth Managers Survey 53
5.4.2. GlobalData’s 2016 Global Wealth Managers Survey 53
5.4.3. GlobalData WealthInsight 53
5.4.4. Global Wealth Model methodology 54
5.4.1. Exchange rates 54
5.5. Bibliography 55
5.6. Further reading 56
List of Tables
List of Tables
Table 1: Demographic profiles of NRIs in key markets 17
Table 2: Expats as a proportion of the total HNW population and the total number of expats per country 47
Table 3: Reason to expatriate by country 48
Table 4: Asia Pacific: Proportion of HNW expats acquired by different targeting methods 49
Table 5: Europe: Proportion of HNW expats acquired by different targeting methods 50
Table 6: Other regions and global average: Proportion of HNW expats acquired by different targeting methods 51
Table 7: Key residency requirements of selected countries 51
Table 8: US dollar exchange rates 54
List of Figures
List of Figures
Figure 1: The US is home to the largest HNW expat population, but proportionally the expat opportunity is bigger in the UAE 9
Figure 2: Emirati HNW expats are a highly competitive segment 10
Figure 3: HNW expats from Greater China make for a sizable target segment 12
Figure 4: The Middle East and the US are popular destination for NRIs 16
Figure 5: H&R Block’s expat teams service US expat clients remotely 19
Figure 6: HNW expats’ demographic profile is almost identical to non-expats 22
Figure 7: HNW expat entrepreneurs are an attractive target market 23
Figure 8: The US is a popular destination among HNW entrepreneurs 24
Figure 9: Singapore attracts a large number of HNW investors who expatriated as part of a job transfer 26
Figure 10: 44% of HNW expats have resided in their country of choice for more than 10 years 27
Figure 11: Offshore capabilities are a must in Singapore 28
Figure 12: Lloyds supports its clients while they are residing overseas 29
Figure 13: Tax efficiency as a driver for HNW migration is of particular importance in the UAE 30
Figure 14: Tax reasons are an important driver for HNW expats investing in the UAE as opposed to their country of origin 31
Figure 15: Westpac targets overseas students 34
Figure 16: Competition in the top expat markets is fierce 36
Figure 17: Client referrals are the most successful method of targeting expat clients 37
Figure 18: N26 Bank leverages technology to target a more international audience 40
Figure 19: Canadian wealth managers are strongly positioned to leverage external referrals 41
Figure 20: Wealth managers should consider partnerships with companies such as Amaroo Relocation 42
Figure 21: A relationship manager’s contacts are an important source of new clients in the Netherlands 43
Figure 22: The majority of expats have been residing abroad for more than five years 44
Figure 23: Credit Suisse targets expats via the Significant Investor Visa program 45