Indonesia continues to present an enticing opportunity in wealth management for domestic and foreign players alike.
To be able to capitalise on this further, however, practitioners see a need for regulatory reform in the country, in order to boost business.
While this is unlikely to happen immediately, there is some fear that if the government doesn’t act soon and open up investment alternatives at home, clients will continue to look offshore rather than enable local-based wealth managers to compete with offerings overseas.
While the numbers of people who made declarations during the tax amnesty programme was encouraging, the total funds repatriated was a bit disappointing.
Is this evidence that there are few incentives at the moment for clients to invest onshore?
It certainly points to fact that the domestic wealth management market needs to continue to develop.
This is important, as a growing number of locally-based entrepreneurs continue to grow their onshore wealth, so have a greater need for a one-bank solution.
And in preparation for this, as well as to access other opportunities today, some banks realise the need to steer more towards an approach to portfolios guided by asset allocation, based on a broader range of products across insurance and investment.
For example, recently-introduced rules permit banks to offer discretionary funds to investors. In turn, this opens up a broader range of investments on which asset managers can work with banking partners, as part of being genuinely more solutions-focused.
Meanwhile, digitisation is expected to play a key role in giving banks a competitive advantage. This can be seen by DBS’ recently-launched digital proposition, digibank in Indonesia, making it first ‘off the block’ with an entirely mobile-led bank.
The regulator is also trying hard to shore up the fundamentals for the industry and increase capacity. This needs to start with expanding the size of the market, including more depth and diversity, greater liquidity and, in turn, a larger number of investors.
Regulation for financial advisers continues to be in the pipeline. Local banks will therefore continue to take time to close the gap that has existed to date in terms of the quality of advisers, connectivity, processes and access to investments that are commonplace within universal banks.
Against this backdrop, this agenda looks at where the market is at today, the opportunities and challenges it faces, and where it needs to go to move to the next level.
Key also to the content is providing insights from experts in overseas markets – sharing best practices, the components of successful businesses, and lessons learned from developing and managing wealth management offerings – elsewhere in Asia.