The number of High Net-Worth Individuals (HNWIs) in China has gone through the roof over the past ten years. This represents opportunities for firms that operate in the finance sector broadly, and specifically in wealth management. Below, we explore the state of the game in 2021, looking at the relationship between HNWIs and private finance, the makeup and interests of Chinese HNWIs, and the digital marketing solutions that stem from a contemporary understanding of the rapidly changing wealth and digital landscapes.
HNWIs and Finance
HNWIs comprise a frequent target market in a number of industries, none more so than wealth management and private financial services. Wealth management firms typically provide services including financial planning, investment advice, portfolio management, asset management, accounting, estate planning and more. Their aim is to take the wealth of individuals and companies, protect it, and increase it over time. Their advantage over direct private banking or private equity firms is that they combine an array of financial advisory services into one, thereby making strategic planning for individuals much easier.
With China’s booming population of HNWIs, the country has become fertile ground for firms with a holistic approach to personal finances, those of wealth management, as well as those offering more specific financial services, such as asset management. To succeed in garnering Chinese HNWI clientele, however, it’s necessary that these firms pay attention to trends in Chinese HNWI demographics and characteristics.
Changing Demographics and Characteristics
The most important thing to understand is that in the last ten years there has been some big shifts in the demographic and characteristics of Chinese HNWIs. First of all, and least surprising, the number of HNWIs has sky-rocketed, and is continuing to rise. According to the 2021 Knight Frank Wealth Report, which defines HNWIs as individuals with over US$1m of investable assets, there are now more than 5.8 million HNWIs living on the Chinese mainland, and by 2025 it is projected there will be 9.1 million. This is up from 343,000 in 2010.
Second, the proportion of them that are young, urban and well-educated is increasing. Between 2009 and 2017, the share went from 12% to 29%. Younger HNWIs are tech-savvy, and are shown in research to lean towards financial solutions that offer more independent choice and control than older HNWIs.
Third, when choosing personal financial services, HNWIs in China have been shown to value expertise and brand image much more significantly than investment scope and return, service privacy, friend or relative referrals or service privacy. Chinese HNWIs may be influenced by elements such as a social status and projections of personal identity in their behaviour as consumers, but, contrary to stereotypes, this is not the case when it comes to investing.
Fourth, support for and interest in fintech solutions is high, and on the rise; especially among first-generation entrepreneurs.
Finally, HNWIs in China are trending towards low-risk, low-return approaches. Research by Bain & Company and China Merchants Bank shows support for high-risk, high-return investments among HNWIs has dropped from 20% to 9% since 2009. At the same time, appetite for medium-risk, mid-level return has steadily contracted.
Digital Marketing Solutions
The information above can be used to create an informed, directed marketing effort in order to attract HNWIs to financial services providers; wealth managers or otherwise. This is the cornerstone to any lead generation campaign: adapting to the psychology, and the needs, of potential leads, so that they come to you, instead of you going to them.
Step One: Content Plan
Lead generation campaigns should pay attention to the respect for expertise and branding among HNWIs in China. Content should be sophisticated, well-researched, and provide intrinsic value in an easily-digestible format.
By publishing blog posts, reports or articles on issues related to the services a firm provides, or even case studies, the firm is demonstrating its expertise. By allowing HNWIs to become familiar with the company via its content, instead of via direct advertising, it gives the HNWI agency, thereby adapting to their increasing preference for making independent choices.
In acknowledgement of HNWI respect towards good branding when selecting financial services, this content must be accompanied by a strong visual identity, and localized, impactful key messaging.
Step Two: Getting Seen
Any content plan has to be made with respect to the media via which it will be published. As Chinese HNWIs are increasingly young and tech-savvy, digital media is the foundation upon which most effective campaigns will be built.
WeChat remains the most-used app in China, across all socioeconomic classes. Its integration with H5 enables the creation of aesthetically sophisticated and interactive campaign pages, and official accounts allow blog-style posts as well as CRM tools.
Step Three: Grabbing Hold
When leads reach out, firms must be ready. Traditional forms of CRM should be a given, but with the increased fondness for fintech, firms might want to invest in new digital tools to stand out. Mini-apps within WeChat are currently booming in popularity, and can be used to deliver key information and gateways regarding the services a firm provides. What an advisor might have previously spent an entire consulting meeting doing, or a strained phone call, can now be done with the click of a few buttons.
Rather than ‘reeling in’ a lead, in this case, it gives leads themselves the power to voluntarily become acquainted, on their own terms, at their own pace. With good-quality content and a healthy dose of data-driven nudging, a mini-app can be the final push necessary to urge a lead to reach out.
Also, combined with WeChat’s proprietary CRM tools, it can simultaneously facilitate the gathering of contact data, which can be used in offline follow-ups.
The Centre of your China Digital Ecosystem should be your Chinese Official Website
Although it might be the best tool for lead generation, WeChat is not, by any means, the be-all and end-all of the Chinese digital world. It’s very important to look into Baidu SEO and Sogou SEO, to maintain a functioning and context-appropriate website.
To attract Chinese HNWIs, it’s important to understanding that they no longer accord with the image that may have been painted of them five or ten years ago. They are now younger, more educated, fintech-friendly and prefer expertise over all else. Specifically, when it comes to finance, their decision-making is less guided by what the people around them say or do, and more by exercising a sense of agency, independently exploring wealth management firms to find the right one for them. All of this must be taken into consideration when it comes to lead generation. Accordingly, a strong content strategy and robust follow-up tools gives a campaign the best chances of success.
Last but not least, if we have to sum-up the Investment and Finance Marketing in China in one word, it would be: Trust.
Positive Online Reputation management is the backbone for a healthy and quality lead generation, and thanks to its 13 years of experience, Sekkei Studio have successfully helped firms and corporations to generate high quality leads from the Chinese HNWI community. Whether you are exploring ways to enter the Chinese market or willing to take what has been done already to the next level, let us know and we’ll be happy to give you our perspective on things.