Compared to the US, Asians save more and spend less, which attributes to their growing wealth over the past 10 years and leaves more room for future growth in the region's wealth management businesses, according to a Citibank study released yesterday.
The biennial study, the Citibank Consumer Wealth Review, found that the total household financial assets in four Asian territories or countries -- Hong Kong, Taiwan, South Korea and Singapore -- have seen an average annual growth of 8 percent over the last 10 years.
"Despite of the recent economic recession, Asians [excluding Japan] are getting richer and richer with a total household wealth of US$2.3 trillion," Vineet Vohra, the bank's regional director of Asia-Pacific consumer investment business, told a press conference.
The household wealth in Japan totaled US$1.3 trillion and US$28 trillion in the US, he added.
South Korea and Hong Kong enjoyed the highest growth rate of 10 percent and 9 percent, respectively, while the figure is 5 percent in the US and 1 percent in Japan, Vohra said.
Asians, however, prefer to hold their assets in hard currency, putting down only 48 percent of their assets in investments including 28 percent in professionally-managed assets, such as life insurance (14 percent) and mutual funds (8 percent), and 20 percent in self-managed assets such as stocks and bonds, the study showed.
But Vohra expects to see more Asians shift their wealth allocation from cash to professionally-managed assets, which grew by 13.6 percent in the past three years while the region's bond market doubled from 2 percent to 4 percent since 1993.
"The shift will be gradual, but there'll be many business opportunities for the region's wealth re-allocation," Vohra said, adding that statistics showed that a higher allocation to investments had yielded higher returns over the past decade if the right investment advice was followed.
Citibank said it aimed to serve as a "wealth planner" in the region to help its clients make the best investment decisions by diversifying its financial products. It said there might be sizable room for the nation's professionally-managed assets to grow in the near future, even though cash and deposits still account for over 50 percent of household assets, which reached US$809 billion last year.
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Kuan added that Taiwan saw the biggest growth of 10.8 percent in mutual funds among all Asian countries last year -- close to the US's 11.4 percent.
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