Hurun "Family Security" report: The average annualized return of wealth management for high-net-worth individuals is 12.9%, and "security" replaces "growth" as the primary goal

Southern Finance reporter Wu Shuang Reported in Shanghai On October 31, CITIC Prudential Life and Hurun Report jointly released the "2021 China High Net Worth Family Safety Report".

Hurun, chairman and chief researcher of Hurun Report, said that "safety" surpasses "growth" to become the most important investment and financial management goal for high-net-worth individuals. Hurun predicts that in the coming year, the top three asset allocation of high-net-worth individuals in China may be A-shares, insurance and bank savings/bank wealth management products/monetary funds.

Hurun interprets that family security aims to maintain the safe and stable inheritance of family wealth and quality of life, and is the overall design and planning of family assets through the necessary asset allocation and security guarantee construction, flexible use of various financial instruments.

The report shows that, first, the size of China's high-net-worth households exceeds 2 million, and the growth rate of high-net-worth households in major mainland cities is significantly higher than that of Hong Kong; in the past year, the proportion of professional shareholders among high-net-worth individuals has increased, and the proportion of business owners has declined. The number of "wealthy families" with net assets of 6 million yuan in China has reached 5.01 million, the number of "high-net-worth families" with net assets of 10 million yuan has reached 2.02 million, and the number of "ultra-high-value families" with net assets of 100 million yuan has reached 130,000. Among the composition of high-net-worth individuals, gold collars account for about 20%, and speculators account for about 10%, which is consistent with last year; Business owners accounted for about 60%, affected by the epidemic on the private economy, a decrease of 5 percentage points from the previous year; Professional shareholders accounted for about 10%, which was affected by the higher growth rate of A-shares in the past two years, an increase of 5 percentage points over the previous year.

Second, the overall level of the consumer price index of China's high-net-worth individuals rose significantly, with Huawei Mate X2, Shanghai Shimao Binjiang, and Wuliangye rising the most in the past decade. The overall level of consumer prices for China's high-net-worth individuals rose 4.39% year-on-year this year, higher than the national consumer price index (August 2021 CPI, +0.8%) released by the National Bureau of Statistics.

Third, "safety" has surpassed the "growth" year to become the most important investment and financial goal for high net worth. Regarding the macro environment, the three topics that high-net-worth individuals are most concerned about are: complex economic environment (63%), normalization of epidemic prevention and control (58%) and social pension issues (50%). There are many uncertainties in the changes in the epidemic and the external environment, and safety has become an important investment and financial management goal for high-net-worth individuals. Ensuring the safety of principal (33%) and obtaining steady wealth growth (24%) are the main concerns of more high-net-worth families.

Fourth, regarding family safety considerations, high-net-worth individuals pay the most attention to the protection of physical and mental health; 70% of people have planned family safety intentions; insurance is the most trusted tool for high-net-worth people to ensure the safe inheritance of wealth. For high-net-worth individuals, protecting the physical and mental health of themselves and their families is the most important aspect of family safety (48%), and people over the age of 56 have a more diverse understanding of family safety, and they pay more attention to the safety of laws and regulations, tax security, and the orderly inheritance of family wealth than young people.

Fifth, the penetration rate of commercial life insurance in high-net-worth populations is as high as 97%; high-net-worth families most importantly value the basic protection and risk isolation function of insurance; the richness of the product portfolio and the timeliness of claims have a greater impact on satisfaction.

Sixth, as an innovative service, the value-added service of insurance fund trust still has a large room for improvement in customer awareness, and the property rights distributed to the designated beneficiaries according to the agreement are the most concerned product benefits.

According to the Hurun Research Institute, China's high-net-worth families have total wealth assets of 125.9 trillion yuan, and their investable assets account for about 67% of total assets.

Including stocks, funds, bonds, asset real estate, insurance, equity, alternative investment products and other financial instruments, the combined average annualized return of Chinese high-net-worth investors in the past three years is about 12.9%.

From the perspective of professional attributes, business owners and professional investors have higher investment returns than gold collars. Households with assets of more than 30 million yuan also have a higher investment yield than households with assets of less than 30 million yuan, with an average of 14.9%. It can be seen that the Matthew effect is obvious in wealth acquisition and appreciation.

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