The wealth management market - France (2024)

1.2 The global market is growing

For years, the wealth management industry has been experiencing sustained growth thanks toincreasing assets under management. From an estimated $** trillion in ****, assets are now estimated at $** trillion and are expected to reach $** trillion by **** [***]

What's more, despite heavier regulation, volume is growing and the number of high net worth individuals (***) is on the rise, as the chart below shows, with nearly ** million HNWIs worldwide in ****.

HNWI health population (***) World, ****-****, in thousands of people Source: ****

The value of HNWI assets is also rising steadily, reaching almost $** trillion by ****.

HNWI wealth World, ****-****, in US$ bn Source: ****

We can also analyze the asset mix of the world's wealthy population . We can see that most assets are made up of cash and cash equivalents, orequity.

Asset mix of the rich population worldwide World, ****, in Source: ****

Let's now analyze the different dynamics at regional level.

on a global scale, HNWI individuals are mainly concentrated in North America and Asia, making North America, as we shall see below, one of the world's most important markets for wealth management, and Asia a market with enormous growth prospects , as illustrated by the chart below.

Regional distribution of the number of millionaires worldwide World, ****, in thousands Source: ****

Indeed, ...

1.3 The French market

In ****, sales by wealth management firms will total *.*** billion euros. This is up on **** (***) , and well above the **** level. The market has thus completed its recovery from the health crisis, during which activity was contracted, and is now booming.

Sales of wealth management consultancies France, **** - ****, in billions of euros Source: ****

We can also see that the sector is in good health in ****, as the following figures testify:

BNP Paribas' Wealth Management Division: pre-tax income amounted to €*** million for the third quarter of ****, up a strong **.*% on the same period last year. Société Générale's Wealth and Asset Management Division: revenues for the third quarter of **** were up *% on the same period in **** (***).

Finally, the health crisis in **** has had little impact on the sector's sales in ****, and companies in the sector are even doing better than before the crisis.

The following graph shows the breakdown of the sector's sales. Insurance and retrocessions are the main sources of market revenue. Fees from asset management (***) account for just *% of sales by asset management firms.

Breakdown of CGP sales France, ****, in Source: ****

2.1 Typology of demand

Almost **% of wealth management advisors ' clients are private individuals, as shown in the graph below, while the remainder are corporate clients.

Breakdown of CNCGP members by clientele France, ****, in Source: ****

Wealth management firms are seeing a marked increase in their client base , as shown in the graph below, which shows that **% of wealth management firms have seen a growing increase in their client base.

Increase in the number of CGP clients France, ****, in Source: ****

This growing increase in the customer base of wealth management firms is driven in particular by a diversification of profiles. Historically, these firms generally catered for a wealthy clientele, often consisting of retired people or those close to retirement who wanted to optimize the management of their assets, facilitate their succession and optimize their tax burden.

A broadening of CGP client profiles France, ****, as % of total Source: ****

In recent years, however, customer profiles have been changing, with the emergence of young professionals, senior executives and entrepreneurs who, despite having assets that are still being built up, are increasingly concerned about their financial future. These new profiles are interested in investment strategies that both grow their capital and protect them against economic hazards.

However, this rejuvenation trend ...

2.2 French people's wealth

According toINSEE 's publication Revenus et patrimoine des ménages édition ****, based on **** data, total French net wealth amounted to**,*** billion euros. Net wealth is the total amount of assets held by a household (***) from which is deducted the amount of capital it still owes in respect of its contracted loans. In the graph below, we can see the differences in the distribution of net wealth between different groups of households in France. The tenth decile accounts for almost **.*% of total net wealth.

Deciles are a statistical method used to divide a population into ten equal groups in order to analyze the distribution of a variable, such as wealth. Each decile represents **% of the population ranked from lowest to highest on a given characteristic. When this approach is applied to the distribution of wealth by age group, deciles provide a better understanding of the wealth gaps between different groups.

Distribution of net wealth by household group in France France, ****, in Source: ****

Similarly, we can observe a huge difference between the *ᵉʳ decile and its net wealth of *,*** euros and the *ᵉ decile with a net wealth of ***,***, more than ** times the net wealth of the *ᵉʳ decile.

Distribution of amounts by deciles France, ****, in ...

2.3 High net worth, the core target of CGPs

Five million households, or almost **% of the population, are above the wealth threshold, according to the Observatoire des Inégalités .

In addition, several types and thresholds of wealth can be differentiated, as shown in the graph below.

Different wealth thresholds France, ****, in euros Source: ****

In France, the number of wealthy people has increased in recent decades, driven by the rise in value of financial and real estate assets, as well as enrichment in sectors such as technology and services. Family wealth transfers and tax optimization strategies also contribute to this rise. Although taxation is progressive, wealth inequalities are widening, with a notable increase in the number of millionaires.This phenomenon reflects a dynamic in which the wealthiest are benefiting more from economic growth, accentuating the gaps between social categories.

Number of wealthy people in France France, ****, in thousands Source: ****

In ****,"high net worth households", which refer to the **% of households with the highest gross wealth, owned a minimum of ***,*** euros in assets. These high net worth households numbered *.* million in **** and held an average of *.** million euros. What's more, the top *% have ***,*** euros, while the top *% have more than *.** million euros.

Furthermore, high net worth households as a whole account ...

2.4 French people's attitudes to financial investments

Savings behavior remains highly polarized, with the proportion of French people expecting to have to dip into their savings reaching a record high, while the proportion planning to save remains stable.

Intention to save in **** France, ****, in Source: ****

In addition, there are several reasons why a saver might hold a savings product. Building up precautionary savings remains the main reason for taking out a savings product.

Reasons for having a savings product France, ****, in Source: ****

With the rise in interest rates, French people's savings strategies have also undergone profound changes: they are less and less inclined to invest in real estate, but say they are much more inclinedto choose riskier or less liquid, but better-yielding financial investments.

Low interest rates on various investments are having an impact on French attitudes. The graph below shows, for example, that more and more French people are turning to slightly riskier products for their savings (***). Nevertheless, the rise in interest rates in **** in the context of inflation is changing French people's investment behavior. In February ****, the Livret A savings account will be at *%.

Impact of low interest rates on investments World, ****, in Source: ****

Savings budget

Let's take a look at how much the French put ...

2.5 The need to rebuild trust between the sector and its customers

Interest in savings and financial investments continues to grow: more than one in two French people now say they are interested in the subject, compared to two in five four years ago.

In the category of those interested in the subject of savings: **% of those in CSP+ categories, **% of those under ** and **% of those with substantial financial assets (***).

Interest in saving France, ****, in Source: ****

In general, the French turn to specialized advisors (***), and also seek information on their own via the financial press or the national or regional general press.

How do you find out about financial investments? France, ****, as % of total Source: ****

In terms of trust, the French tend to prefer to confide in their bankers rather than other private players, whether advisors or insurers.

Trust in CGPs France, ****, in Source: ****

Nevertheless, the level of trust in wealth management advisors is growing.

Trend in confidence in wealth management advisors France, ****-****, in Source: ****

2.6 Demand trends: preparing for retirement, digitalization, euro and unit-linked savings and environmental and social impact

Worry about retirement is on the decline again, but remains in the majority among working people. Indeed, many French people are worried about the sustainability andadequacy of their future pensions. This uncertainty is fuelled by a number of factors, including the aging of the population, regular reforms to the pension system , and debates surrounding the retirement age.

Confidence in one's own retirement France, ****, in Source: ****

What's more, in the medium term, future retireesseem to be increasingly cautious about preparing for retirement, even before the age of **. For example, **% of those with assets of **,*** euros or more are saving, while only **% of those with no assets are doing so.

Change in the proportion of non-retirees saving for retirement France, ****, in Source: ****

Sustainable savings

Sustainable savings are growing in popularity, reflecting a collective awareness of the importance of investing responsibly. Against a backdrop of environmental, social and ethical concerns, this trend is prompting more and more savers to direct their money towards projects that respect the planet and its people. Sustainable investment products, such as ESG (***) funds, make it possible to reconcile financial performance with positive impact.

As a result, responsible investments are becoming increasingly well-known, with nearly **% of French people aware of ...

3.1 Overview of the competitive landscape

The different players

The wealth management market in France is particularly fragmented, as it is divided among numerous players: brokers, bankers, insurers, real estate agents, lawyers, notaries, chartered accountants, independent advisors, investment firms, property administrators, portfolio managers, auctioneers, and so on.

However, these players can be divided into two categories:

Direct players, i. e. financial institutions with a department or subsidiary dedicated to wealth management, but also insurance companies with their own business lines.direct players include financial institutions with a dedicated wealth management department or subsidiary, insurance companies offering certain services to wealth management clients, and independent wealth management companies and advisors; Indirect players with a complementary role: lawyers, chartered accountants, notaries, etc., who play a "specialist" role, as opposed to the "generalist" role played by direct players.

The direct players can be broken down into the private banks of the major networks, historic and/or foreign private banks (***) and online platforms.

As a result, the wealth management market is characterized by a high degree of competition. In this context, the most dynamic players are CGPs and insurers, as well as major banks such as BNP, Crédit Agricole and Société Générale.

Over the past three years, ...

3.2 Financial performance and CGP remuneration

The remuneration of CIF CGP consists mainly of retrocessions of entry fees and annual management fees, which represent respectivelyrepresent respectively **% and **% of total declared CIF sales (***).

The amount advised in **** by CIF CGP is **.* billion euros, so the average retrocession rate for entry fees is *.**% of the amount of subscriptions in ****. CIF CGP declared assets advised and monitored over time at **/**/**** of ** billion euros, so the average retrocession rate for management fees is *.**% of these assets.

Below, we can see an increase in the sales of wealth management advisors .

Sales of member asset management firms France, ****, in thousands of euros Source: ****

In addition, we can see below how the average breakdown of sales breaks down.

Proportion of members declaring income by asset type France, ****-****, in Source: ****

Product offering

With regard to product and service offering, players mentioned :

Having an average of *.** partnerships with financial instrument providers, and having advised on an average of **.** different financial instruments over the year (***). Have an average of *.** partnerships with investment service providers and have advised an average of *.** different investment services over the year (***) Have an average of *.** partnerships with providers of "other financial investments" (***).

The profitability of wealth management players on the ...

3.3. The sector's shift towards ESG

The wealth management sector, like other branches of finance, is increasingly turning its attention to ESG. This necessary shift, demanded by clients and investors alike, is not, however, easy to implement. In fact, according to a report by the AFG (***), there are * challenges to overcoming the major obstacles to implementing impact finance:

The availability, collection, harmonization and management of impact data Establishing specific impact investment governance and processes within asset management companies Convergence of impact finance market practices following the adoption of a common definition by FFT(***) The identification of specific approaches by SDG (***), broken down by asset type, with appropriate methodologies and tools The definition of transparent and comparable impact reporting to limit the risk of impact washing.

Labels and sustainable investments

Sustainable investment labels play a key role in guaranteeing the transparency and credibility of financial products that respect environmental, social and governance (***) label in France or theGreenfin label, these labels boost investor confidence by filtering out dubious projects and encouraging more responsible finance.

For example, over a third of French people are aware ofthe existence of the SRI label created in **** by the French Ministry of the Economy and Finance.

Awareness of SRI (***) funds France, ****, in Source: ****

In ...

4.1 Variety of services on offer, and fees applicable to the wealth management business

The wealth management market covers a range of services that are as varied as they are complementary:

Financial management: selection of funds and investment vehicles under discretionary management, management of dedicated funds, development of structured products, etc. ... ; Retirement planning: understanding future needs, long-term investments; Wealth engineering: organization, construction and transfer of personal or professional assets, involving legal advisors (***); Wealth credit and financing solutions, sometimes with a view to leveraging; Protection of works of art, valuable furniture, collections, real estate assets, etc. ; Tax optimization, particularly for assets subject to wealth tax.

The wealth management advisor is mainly involved in two distinct areas:

advice in its purest form (***) ; the implementation of validated recommended solutions or wealth strategy.

In both cases, the CGP is remunerated from * sources:

advisory fees forwealth analysis and assessment; retrocessions from partners on recommended products: retro-commissions on entry fees for both financial investments and real estate, and remuneration on outstandings for financial solutions implemented.

Since Directive ****/**/EU of the European Parliament and of the Council of May **, **** on markets in financial instruments, wealth management advisors can receive commissions on financial products and/or charge fees. As a result, there are now two titles for wealth management advisors:

CGPI (***). CGP (***): they ...

4.2 Supply trends: digitalization

Wealth management advisors are increasingly investing in digital solutions.

As a result, the number of members using account aggregators and fund analyst services continues to rise.

Digitalization of wealth management advisors France, ****, in Source: ****

What's more, the sudden development of Artificial Intelligence is seen as a real opportunity for almost **% of CGPs.

Opportunity for AI in wealth management advisors France, ****, in Source: ****

Robo advisors

The main supply-side trend linked to the digitalization of the sector is undoubtedly the emergence of robo-advisors, or robot advisors in French. This term refers to digital platforms offering automated financial management services, using algorithms based on large data sets and customer profile segmentation. However, this is not a service based on technology alone: human expertise is often associated with this solution. The concept originated in the United States in the ****s. You can find the Forbes **** ranking of the best robo-advisors here.

The main advantages of robo-advisors are :

prices, well below those of traditional wealth management providers simplicity and accessibility, since they impose little or no minimum portfolio requirements for their clients. the quality of their advice, which is both personalized and regular

These platforms make wealth management accessible to as many people as possible, and ...

4.3 The future of wealth management

The wealth management industry is rapidly evolving in line with customer needs and demands. The sector is becoming increasingly competitive as regulation, globalization of flows and technological disruptions come into play.

According to a Deloitte study, the top ten disruptions that will impact the future of the wealth management sector are as follows:

Reconnected investors: the arrival of new generations also means the arrival of new ways of thinking. Today's financial services customers want to be treated uniquely, and to feel the personalization and interest brought to their profile. Automation vs. human advice: while the impact of automating certain processes is enormous for the sector, its application depends on the customer target. For example, some customers who can't afford to have a dedicated human advisor resort to technology for their follow-up. Nevertheless, the human factor remains a key advantage for the wealth management sector. Big data and data analytics: the scope of data continues to grow, with the development of new ways of managing and analyzing these growing volumes of information. The data processing capacity and accuracy of these algorithms is a key element for the future of the sector. Comprehensive support and target-setting: performance must be aligned with clients' objectives, ...

5.1 Regulations applicable to the profession of wealth management advisor

The wealth management advisory profession does not benefit from a specific status, as is the case for lawyers, for example. As a result, wealth management advisors may need to have * statutes/competences listed in the following table, depending on the nature of their activity:[***]

In addition, the asset management market is a highly regulated sector, governed by numerous laws, such as Basel III, MiFID * and * on the organization of financial instrument markets, DIA * on insurance, PRIIP on current savings products, and so on. These laws have created a more restrictive environment for banks, insurers and investment service providers, which has seen customer mistrust increase in the wake of the financial crisis of the late ****s

Combating money laundering and the financing of terrorism

Wealth management advisors are subject to strict obligations to combat money laundering and the financing of terrorism. They must :

Identify and verify the identity of their clients, including beneficial owners, and analyze suspicious transactions. Declaration of suspicions: In the event of suspicions of illicit activities, they are required to declare these operations to TRACFIN(***). Implementation of internal procedures to detect suspicious transactions, train employees and ensure ongoing monitoring of business relationships.

5.2 The impact of the PACTE Act on the sector

The PACTE Act, passed on April **, ****, proposes major changes to modernize French wealth management tools and numerous measures to support SMEs-ETIs.

Among the main measures impacting the wealth management business, we can cite changes relating to:

life insurance: life insurance and capitalization contracts can now be transferred within the same insurer, without loss of tax precedence. In addition, certain units of account eligible for life insurance policies may now be made up of certain private equity funds previously reserved for professional investors, such as FPCI (***).

PEA and PEA-PME: more flexible rules for partial withdrawals. Partial withdrawals over * years old will not entail closure of the plan, nor the blocking of new payments. In addition, the range of instruments eligible for the PEA-PME has been broadened (***)

The creation of the Plan Epargne Retraite (***) and enables its holder to receive life annuities or a lump-sum payment on retirement.

5.3. ESG regulations

With the rise of ESG criteria, new European legislation, called SFDR (***), came into force in March ****. [***]

It requires asset managers to integrate and communicate on ESG criteria in their management and to assess the environmental, social and governance impacts of the products they recommend.

6.1 Segmentation

• Amundi
• HSBC Private Bank
• Société Générale Private Banking
• Natixis Wealth Management
• Milleis Banque
• Pictet
• Primonial
• Astoria Groupe
• Cyrus Conseil
• Compagnie Financière Richelieu
• Ethenea
• Cholet-Dupont
• Magnacarta
• Althos-Patrimoine
• K&P Finance
• Experts en Patrimoine
• Lonlay & Associés
• Nalo
• Yomoni
• Grisbee
• Finary
• Epsor
• Premium Groupe
• Ageas France
• BPI France
• Scala Patrimoine
• Shares
• Thesaurus
• Crystal Groupe
• LFPI
• Mandarine gestion
• Oaktree Capital Management
• Rothschild Martin Maurel
• Lazard Frères Gestion
• Meeschaert (LFPI Groupe)
• Abeille Assurance (Aéma groupe)
• Turenne Groupe
• Siparex
• Lucya
• Oddo BHF
• Equance
• Patrimmofi
• Cashbee
• CA Indosuez Private Banking & Wealth Management
• Palatine Banque (BPCE Groupe)
• Banque Palatine (groupe BPCE)
• LCL Crédit Lyonnais
• CIC Banque Privée
• Cheval Blanc Patrimoine
• Marie Quantier
• Franken Consulting
• Caption