The number of rich people in the Asia-Pacific increased nearly 10 percent last year from a year earlier mainly due to equities and real estate portfolio expansion, making the region the world’s second-largest market for wealth management services, an annual survey by Merrill Lynch and Capgemini showed yesterday.
The number of high net worth individuals — those with investable assets of US$1 million (NT$30.33 million) or more — grew 9.7 percent to 3.3 million last year, surpassing their European peers for the first time, with their combined wealth growing 12.1 percent to US$10.8 trillion, the Asia-Pacific Wealth Report said.
That came as the region saw a robust increase in domestic demand and a quick rebound in regional trade after the global financial crisis in 2009, the report said.
The top three countries — Japan, China and Australia — accounted for 74.4 percent of the wealthy and 68.2 percent of the region’s wealth, the report said.
“Asia-Pacific remains a region of enormous wealth creation, spearheaded by China, India and Japan, which continues to outpace global levels,” said Michael Benz, head of Asia-Pacific Wealth Management at Merrill Lynch Global Wealth Management.
The trend poses both business potential and challenges for the wealth management market, Benz said.
Increasing competition could strain profit margins, as more international wealth management firms enter the Asian market, the report said.
Wealth managers in the region have less exposure to sophisticated wealth management products and capabilities, while firms cannot bring in experienced professionals from other markets due to a lack of knowledge of the local market, the report said.
Rich people from China, India and South Korea invested heavily in equities at 32 percent, whereas Japanese held nearly 30 percent of their funds in cash and fixed income, the report said.
Real-estate properties came in second, accounting for 27 percent of the affluent population’s portfolio last year, pushing up the region’s housing prices, the report said.
Housing prices surged 26 percent in Singapore and 19.5 percent in Hong Kong last year, while growing 8.5 percent in Australia, 7 percent in Taiwan and 6.4 percent in China, the report said.
Sydney has become a popular destination for foreign funds seeking shelter in Australia’s mature property markets and commodity-based economy, the report said.
In Taiwan, the number of wealthy individuals was estimated at 94,100 last year, increasing 13.7 percent from a year earlier, with total wealth expanding 14.7 percent to US$302 billion, it said.
Kendrick Lee (李柏霖), director of Merrill Lynch’s global private client group, cited the strong performance in equity and property markets as the main drivers.
Equity investment topped asset allocation choices among rich Taiwanese at 32 percent, followed by real estate at 25 percent, Lee said.
Lee said rich Taiwanese might trim their real-estate portfolio next year because of asset bubble concerns, but could strengthen their equity investment because of bargain-hunting.