now loading...
Wealth Asia Connect Middle East Treasury & Capital Markets Europe ESG Forum TechTalk
Wealth Management
Capturing Asia-Pacific’s growing wealth
For high-net worth individuals globally (HNWIs), 2015 proved to be a difficult year for generating and maintaining wealth.
Darryl Yu 24 Jun 2016
For high-net worth individuals globally (HNWIs), 2015 proved to be a difficult year for generating and maintaining wealth.
According to information for Capgemini’s World Wealth Report 2016, there was only a 4.9% increase in overall HNWIs in 2015, a significant slowdown compared to the 7.7% annualized rate recorded from 2010-2014.
Despite the overall wealth deceleration, Asia-Pacific forged ahead overtaking North America as the largest HNWI market in the world with 5.1 million HNWIs and recording a wealth growth of 9.9% (US$17.4 trillion) compared to 2014. An amazing achievement considering that in 1996 Asia-Pacific total HNWI wealth was around US$3.5 trillion.  
 
While there is evidentially a growing opportunity for wealth managers operating in Asia-Pacific, many financial firms within the region are still finding difficulty in capturing those wealth flows and sustaining their business models. This April, Barclays exited its wealth management business in Asia in a move that highlighted the challenges of running a wealth management business in Asia.  Merrill Lynch and Societe Generale also exited the Asian space in 2014.
 
One way wealth managers can survive within the Asia-Pacific market is through the enhancement of its digital platforms. The Capgemini report reveals that 80% of wealth managers recognize the positive impact digital tools can have on client interactions yet only 45.4% of them have a high satisfaction with the digital tools they currently possess.
 
Capturing Asia Pacific’s growing wealth
 
On the other hand, HNWI demand for automated advisory services has gone up from 48.6% in 2015 to 66.9% in 2016. In Asia Pacific, 79.6% of HNWIs surveyed were interested in the usage of automated advisory services. Clearly this figure along with the rise of non-traditional financial technology (fintech) players should get the attention of wealth managers in Asia Pacific. A Capgemini model discovered that wealth managers who didn’t embrace digital offerings could see a 56% drop in net income under the most extreme scenarios.   
 
Upgrading their digital offering should be the number one priority for wealth managers looking to operate in Asia-Pacific considering that the region is predicted to be the driver of wealth for the next several years fueled mainly from Chinese HNWIs. According to Capgemini, Asia-Pacific’s HNWI population is predicted to grow to 11.7 million individuals in the year 2025.   
Conversation
Nan Li
Nan Li
managing director, institutional banking group
DBS Hong Kong
- JOINED THE EVENT -
Exclusive roundtable
Unlocking the potential of sustainable supply chains
View Highlights
Conversation
Justin Ong
Justin Ong
Asia Pacific asset wealth management leader
PWC
- JOINED THE EVENT -
In-person roundtable
Asia and the future of funds
View Highlights