Summary

Offshore investment market is growing once again, reassuring all banks and wealth managers serving this lucrative, if challenging segment that the Common Reporting Standard (CRS) and recent scandals have not put it into a terminal decline. However, the shape of post-CRS world is likely to be very different than what it was before: more concentrated, institutionally oriented, and with slower growth.

Key findings include in this report -

  • Growth will slow in the retail non-resident sector as the CRS inclines more investors to book onshore, and obtain their geographic diversification via other means. Amongst the largest international financial centers (IFCs), those with the largest portion of institutional AUM such as Luxembourg, witnessed the strongest growths.
  • The impact of the CRS upon wealth managers in the largest IFCs is likely to be quite muted, both because they tend to be diversified in terms of their offerings to both institutional and retail investors, and because they are attractive as major financial markets in their own right.
  • Booking centers with particularly fast growth in 2016 benefited from one-off adjustments, such as the reopening of the economy to international investors (Argentina), or being rediscovered by investors as the local economic cycle turned back towards growth (Canada and Brazil).
  • Though the proportion of HNW wealth booked offshore has declined compared to the previous years, there remain strong sectors in the Middle East & Africa along with sectors of Asia Pacific.
  • Branches in regional wealth management hubs remain critical, even as the offshore markets consolidate due to the preference for offshoring wealth only to the near-abroad.



Critical success factors -

  • Institutional investors: International wealth management propositions need to be geared towards institutional investors, as they will make up for an even larger portion of the market in the future.
  • Build Middle East & African teams: While HNW investors are turning away, investors in these regions continue to offshore the bulk of their wealth.
  • Embrace the CRS: Wealth managers in IFCs that have pushed forward with the CRS have fared the best as they are able to provide certainty to customers, something that international HNW clients crave.



The report "Offshore Investment: Booking Center Preferences 2017: draws on our 2017 Global Wealth Managers Survey and Offshore Investment Analytics to analyze the performance of key booking centers over time. It has a particular focus on HNW individuals booking assets abroad. In particular it examines the propensity to invest offshore and booking center preferences for 20 key markets.

Specifically, this report -

  • Analyzes the largest offshore investment centers and how this breaks down by asset class.
  • Examines the performance of the offshore centers compares and what is driving this performance.
  • Tracks how much wealth HNW individuals hold offshore and how this varies by country and region.
  • Provides insight into the preferred centers for HNW offshore investments and how this varies by country.




Scope

  • Growth will slow in the retail non-resident sector as the CRS inclines more investors to book onshore and obtain their geographic diversification via other means.
  • The impact of the CRS upon wealth managers in the largest IFCs is likely to be quite muted, both because they tend to be diversified in terms of their offerings to both institutional and retail investors, and because they are attractive as major financial markets in their own right.
  • Booking centers with particularly fast growth in 2016 benefited from one-off adjustments such as the reopening of the economy to international investors (Argentina), or being rediscovered by investors as the local economic cycle turned back towards growth (Canada and Brazil).
  • Though the proportion of HNW wealth booked offshore has declined from previous years, there remain strong sectors in the Middle East & Africa along with sectors of Asia Pacific.
  • Branches in regional wealth management hubs remain critical, even as the offshore markets consolidate due to the preference for offshoring wealth only to the near-abroad.




Reasons To Buy

  • Understand how to best promote your offshore proposition
  • Gain insight into the impact of the CRS upon offshore investment trends
  • Understand HNW investors’ booking center preferences and how this is expected to change
  • Learn how different offshore centers have performed in recent years and adjust your offshore proposition accordingly.