Hong Kong: Asia’s wealth management industry, undeterred by volatile markets and slowing global growth, expects annual revenue growth of more than 15% over the next two years, according to Barclays Capital survey released on Monday, 21 April.
The survey of staff from 57 wealth management firms across non-Japan Asia overseeing more than $5 trillion also found they are most bullish on the prospects for China, although Southeast Asia followed closely behind.
The poll of asset managers, insurance companies, retail banks and private banks catering to the very rich found 80% of respondents expect the industry in China to have annual revenue growth of more than 15% over the next two years.
This compared with 68% for Southeast Asia, where Singapore is the leading wealth management market.
“The outlook for Southeast Asia is now viewed as second only to China in terms of potential wealth management revenue growth over the next couple of years, reflecting the growing significance of Singapore as a global wealth management centre,” Kevin Burke, the firm’s head of distribution for Asia Pacific, said in a statement.
Barclays Capital is the investment banking arm of UK lender Barclays.
Around 60% of wealth managers expected more than 15% annual revenue growth from India, Hong Kong and Taiwan, closely followed by 55% who anticipate the same level of revenue growth from South Korea.
Soaring wealth, high savings and massive potential have made Asia the world’s hottest market for wealth managers.
The number of high-net worth individuals in Asia — defined as people with more than $1 million in financial assets excluding their homes — grew 8.6% to 2.6 million in 2006, according to a report by Merrill Lynch and consultants Capgemini.
But the region has not been immune to the global market sell-off. MSCI’s measure of Asian stocks outside Japan dropped more than 14% in the first three months of 2008, its worst quarterly performance in more than five years.
The survey showed wealth management clients were wary about equity market exposure, with 80% of managers indicating that their clients make substantial use of capital protection and 65% use multi-asset investment strategies.
Barclays Capital said the survey showed investors were placing greater importance on diversifying into liquid assets and protecting their underlying capital rather than pursuing aggressive short-term investment strategies.
It said wealth managers had also altered their recommended asset allocation for a global balanced-risk investor portfolio, increasing their weighting in Asian equities, commodities, cash and bonds at the expense of US, European and Japanese equities.