The wealth management market in France

The aim of wealth management is to make the most of the client's tangible and intangible assets and liabilities. The main task is to determine a client's budget and financial priorities with a view to profitability.

There are three types of wealth management:

Traditional management: in which the manager manages a financial portfolio by buying and selling securities.

Active management: in which the manager buys stocks with a specific objective in mind. For example, investing in a company to earn regular dividends.

Passive management: the client relies entirely on the decisions of his financial advisor.

Wealth management is therefore a very broad activity, encompassing other areas such as real estate management, art acquisition, tax planning, retirement planning and estate planning.

Historically, the wealth management market focused on maximizing financial returns. Today, the approach is more global and personalized.

The global wealth management market is growing worldwide, particularly in the Asia-Pacific region. Indeed, it is often linked to the rise in high net worth individuals, and we are witnessing a significant increase in the number of HNWIs. In 2023, assets under management will total around $118.7 trillion, up 12% on 2022.

Nationally, the wealth management market is stable to growing. Clients are mainly private individuals, although many companies also benefit from this service, and the core target of wealth management advisors are high net worth individuals, defined as the top 10% of households in terms of gross wealth.

Wealth managers can be bankers, stockbrokersor pension fund managers. The French market is particularly fragmented. Almost 50% of the industry ' s sales are generated by the top 50% of wealth management firms.

In 2021, French asset managers will have reduced their partnerships with financial instrument providers, while increasing the number of instruments advised. The profitability of wealth management players has fallen due to low rates, more conservative allocations and regulatory constraints, driving them to explore fintechs to remain competitive.

Similarly, wealth management is acclimatizing to the world in which it operates. We are witnessing a diversification of client portfolios towards sustainable or ESG investments. By 2021, 29% of French assets will be invested in these areas. The creation of labels such as SRI and the growing importance of the European taxonomy reinforce this trend towards sustainable investment.

There is also a trend towards digitalization of the market , with the emergence of robo advisors enabling the automation of certain tasks , and some companies subscribing to account aggregators or fund analysis services.