More rich Asian people are asking private banks to manage their wealth amid increasing volatility in financial markets, a new survey shows, in an encouraging sign to firms such as UBS Group AG and Credit Suisse Group AG that are expanding their businesses in the region.
About a quarter of high-net-worth investors (HNWI) in Asia were clients of private banks as of May, up from 10 percent three years ago, according to the study released this week by Singapore-based East & Partners Asia Pte. The proportion of those managing their own wealth dropped from 70 percent to 52 percent in the same period.
That trend is set to continue, as Britain’s vote to leave the EU, uncertainties over the US and Chinese economies and currency volatility prompt more investors to seek professional advice, East & Partners analyst Jonathan Chng said.
The firm estimated that almost 30 percent of wealthy Asians will become private-bank clients by May next year, while those managing their own assets will fall to 47 percent.
“Primarily due to the constant changes in the global economy and heightened market uncertainties, HNWIs clearly understand that professional advice is necessary for wealth accumulation and protection,” Chang said in an e-mailed reply to questions.
The trend portends well for UBS and Credit Suisse as they focus on bolstering their wealth management businesses in Asia. UBS is seeking to double its staff in China over five years as it adds about 600 people in areas from wealth management to investment banking.
Meanwhile, Credit Suisse plans to raise its client-adviser numbers in the Asia-Pacific region to about 800 by 2018, from 615 earlier this year.
Private wealth in the Asia-Pacific region surpassed that of North America for the first time last year thanks to stronger economies and real-estate markets, according to a Cap Gemini SA report published last month.
“Asia’s wealth outlook remains more positive than pretty much any other part of the world,” Deutsche Bank AG global wealth-management head Fabrizio Campelli said in an interview in Singapore last week.
The build-up in client assets “will be particularly strong in this part of the world,” he said.
The German lender is increasing headcount in Asia, as well as investing in technology infrastructure and compliance, Campelli said.
The bank will add 25 relationship managers annually in Hong Kong and Singapore over the next five years, Asia-Pacific wealth management head Ravi Raju said last month.
The East & Partners survey shows that real estate remains rich Asian people’s favorite investment, representing 32 percent of their asset allocations, followed by equities, alternative asset classes and fixed income.
However, the proportion for property has declined from 40 percent in 2013 as investors sought more international equities and alternative assets, the study shows.
The firm surveys more than 900 wealthy people in Taiwan, China, Hong Kong, India, Indonesia, Malaysia, the Philippines, Singapore, South Korea and Thailand twice per year on their investment trends.
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