Table of Contents

Targeting Entrepreneurs in Wealth Management 2008: Western Europe and Asia-Pacific - In recent years entrepreneurs have come to be seen as a key client segment for wealth managers to target and acquire, and an important growth area in the future. This brief assesses the strategies that wealth managers use to target entrepreneurs.

Product Code: dmfs2189

Publication Date: 23-May-2008

---

Overview

Introduction

In recent years, entrepreneurs have come to be seen as a key client segment for wealth managers, offering significant scope for future growth. This report explores some of the fundamental characteristics of entrepreneurs and business owners and considers how these clients' requirements are dictating the development of the wealth management proposition.

Scope

· Presents a profile of business owners and entrepreneurs, based on Datamonitor surveys in Europe and Asia Pacific;

· Assesses wealth managers' strategies for targeting the business owner / entrepreneur market.

· Sizes and forecasts the business owner / entrepreneur market in selected countries.

Report Highlights

Entrepreneurs are an attractive group for several reasons. The combination of personal and business concerns means that their financial needs are varied, encompassing portfolio management, estate planning, corporate finance and international services. This offers strong business potential for wealth managers.

Increasingly, wealth management services for entrepreneurs are more likely to resemble institutional or corporate banking services. Private bankers recognise that entrepreneurs, particularly those in the wealth creation phase of their business life cycle, have limited liquidity and are most interested in strategies for growing their business.

In particular, business owners and entrepreneurs favor private equity and property investments. More than half of European and Asia-Pacific wealth managers said that their clients exhibited strong demand for these asset classes.

Reasons to Purchase

· Develop your business owner / entrepreneur proposition based on insight into clients' characteristics and needs;

· Identify the products and services that are most in demand among business owners and entrepreneurs;

· Compare your competitors' strategies for targeting this core segment.

---

Overview	1
Catalyst	1
Summary	1
Methodology	1
Executive summary	2
Entrepreneurs offer substantial potential for wealth managers who take time to understand their evolving needs and deliver service above and beyond investment advice	2
Business owners and entrepreneurs represent a core business segment for wealth managers	2
Entrepreneurs demand convenience and integrated services	2
Table of Contents	3
Table of figures	4
Table of tables	5
Market context	6
Business owners and entrepreneurs represent a core business segment for wealth managers	6
Business owners and entrepreneurs offer strong revenue potential both today and over the next five years	6
There were nearly 9 million entrepreneurs across Europe in 2007	8
Norway, Greece and Ireland will see the fastest-growing entrepreneur populations to 2012	9
Norway's entrepreneurial population will grow by 8.3% compounded annually to 2012	10
Ireland has the highest rate of early stage entrepreneurial activity in Western Europe	10
The conflicting motivations of Greece's population mean moderate growth of entrepreneurs	11
Italy and Portugal will see small declines in their entrepreneur populations	11
The Asia Pacific entrepreneur market is particularly attractive	13
Wealth Management service response: Private banks are creating dedicated units to serve this lucrative segment	15
The demands of business owners and entrepreneurs	16
Entrepreneurs demand convenience and integrated services	16
Business owners' risk appetite may be overstated; business risk appetite does not equate to investment risk appetite	16
Wealth Management service response: Providers need to devote time to gaining their clients' trust before recommending investment strategies	17
Entrepreneurs are time-poor	17
Wealth Management service response: Investment advice is being complemented by convenience services	18
Clients in the regions expect service closer to home	19
Wealth Management service response: Private banks are moving closer to important regional business hubs	19
Entrepreneurs in both regions want frequent communication	19
European entrepreneurs want more active control of their investments than APAC entrepreneurs	21
Both European and APAC entrepreneurs require online functionality	22
Wealth Management service response: Providing dedicated communication channels and improving online functionality and access to portfolio information will allow entrepreneurs to make the most of their time	22
Entrepreneurs and business owners expect their investment banking needs to be addressed	23
Entrepreneurs are extremely receptive to innovative products and exhibit strong demand for some institutional products in particular	24
Wealth Management service response: Wealth managers are addressing clients' demand for more sophisticated investment structures and financing solutions through closely integrated investment banking and private banking operations	26
Wealth Management service response: The entrepreneurial customer group also offers wealth managers the chance to seamlessly integrate wealth management and business banking	27
Entrepreneurs in both Europe and Asia have a high demand for estate planning services	28
Wealth Management service response: Wealth managers can add value and deepen relationships by enhancing succession planning services	29
Increasing legal complexity drives the high demand among entrepreneurs for tax planning services	30
Wealth Management service response: Providers are meeting the demand for tax advice through specialist services and educational events	31
Entrepreneurs' demonstrate high demand for offshore and overseas investments	31
Wealth Management service response: Wealth managers are providing a broad range of international services	32
Appendix	33
Data	33
Methodology	39
Bibliography	40
Further reading	41
Ask the analyst	41
Datamonitor consulting	41
Disclaimer	41
List of Tables
Table 1: Number of self-employed individuals between 15 and 74 years old with employment status of 'employers' by European country, 2003-7	12
Table 2: Forecast number of self-employed individuals between 15 and 74 years old with employment status of 'employers' by European country, 2012	13
Table 3: Please rate the business owners/entrepreneurs client segment on its potential for revenues	33
Table 4: Around what proportion of your high net worth client base accumulated their wealth through the following sources?	33
Table 5: Please rate the business owners/entrepreneurs client segment on its attractiveness as an area to focus on.	34
Table 6: Please indicate if there is "a lot of demand" for value-added services from business owners / entrepreneurs.	34
Table 7: How would you rate business owners / entrepreneurs on their demand for frequent communication/interaction with their wealth manager, on average?	35
Table 8: How would you rate business owners and entrepreneurs on their desire to take an active role in their own portfolio management/investment decisions, on average?	35
Table 9: How would you rate business owners / entrepreneurs on their demand for online functionality from their wealth manager, on average?	36
Table 10: How would you rate each of the following segments on their demand for lending products, on average?	36
Table 11: How would you rate business owners / entrepreneurs on their receptiveness to innovative products, on average?	37
Table 12: For which of the following products is there 'a lot of demand' from business owners and entrepreneurs?	37
Table 13: How would you rate business owners / entrepreneurs on their demand for estate planning/trust services, on average?	38
Table 14: How would you rate business owners / entrepreneurs on their demand for tax advice, on average?	38
Table 15: How would you rate business owners / entrepreneurs on their demand for strong international services such as offshore investments or overseas property investment/management, etc, on average?	39
List of Figures
Figure 1: Please rate the business owners/entrepreneurs client segment on its potential for revenues	6
Figure 2: Which client types will offer the greatest potential in your country in the next five years?	7
Figure 3: Germany accounted for more than a fifth of all entrepreneurs in Western Europe in 2007	8
Figure 4: Number of entrepreneurs, 2007 and 2012	10
Figure 5: Around what proportion of your high net worth client base accumulated their wealth through the following sources?	14
Figure 6: Please rate the business owners/entrepreneurs client segment on its attractiveness as an area to focus on.	15
Figure 7: Please indicate if there is "a lot of demand" for value-added services from business owners / entrepreneurs.	18
Figure 8: How would you rate business owners / entrepreneurs on their demand for frequent communication/interaction with their wealth manager, on average?	20
Figure 9: How would you rate business owners and entrepreneurs on their desire to take an active role in their own portfolio management/investment decisions, on average?	21
Figure 10: How would you rate business owners / entrepreneurs on their demand for online functionality from their wealth manager, on average?	22
Figure 11: How would you rate each of the following segments on their demand for lending products, on average?	24
Figure 12: How would you rate business owners / entrepreneurs on their receptiveness to innovative products, on average?	25
Figure 13: For which of the following products is there 'a lot of demand' from business owners and entrepreneurs?	26
Figure 14: How would you rate business owners / entrepreneurs on their demand for estate planning/trust services, on average?	29
Figure 15: How would you rate business owners / entrepreneurs on their demand for tax advice, on average?	30
Figure 16: How would you rate business owners / entrepreneurs on their demand for strong international services such as offshore investments or overseas property investment/management, etc, on average?	32

---