Hong Kong Singapore wealth centres catching up
Even as Switzerland remains the world’s largest wealth management centre, other locations such as Hong Kong, Singapore and the US are also catching up rapidly, according to research from Deloitte.
Deloitte ranked the leading wealth management centres around the world according to international assets under management and administration (AMA).
Hong Kong’s relative growth of cross-border client assets overshadowed all others, the report highlighted. Since 2008, Hong Kong has had a 142% rise in assets to $400bn to rank fifth globally, overtaking Singapore.
Singapore ranked sixth, recording a 25% rise in assets since 2008.
Switzerland led the world with $2trn in assets under management at the end of 2014, representing 14% growth during the same period.
The next three in the rankings were the UK ($1.7trn in assets, 13% growth), the US ($1.4trn, 28% rise) and Panama & Caribbean ($900bn, 47% decline).
The global international wealth management market in total volume grew to $9.2trn, up 2.2% from 2008 to 2014, the report said.
"Given how fragmented the market is, with the top 20 players holding less than 15% of the market, it will be very important for players in Asia to explore profitable business models that address not just the offshore but also the onshore opportunities,” said Mohit Mehrotra, global wealth management group.
Wealth managers need to continuously build the client base in order to stay competitive, the report highlighted.
Hong Kong has apparently done well in terms of capital from new clients. From 2008-2014, Hong Kong had the highest growth (108%) to $290bn. Singapore had 11% growth in new client inflows to $40bn.
“The best opportunities [for new clients] are currently found outside Europe, in emerging economies, mainly in Asia, where there is strong growth in consumer disposable income and wealth creation.
“Many Swiss- and European-based wealth managers are recognising this enormous opportunity and are stepping up efforts to gain access to these markets.
“However, local wealth management centres, such as Hong Kong and Singapore, with their local banking service providers, are geographically closer to clients in the region and seem to be more successful in competing to exploit the market potential.”