Private Wealth Management in Hong Kong : Part 1 of our SURVEY 2019
Hubbis conducted a Survey in late January focussed on the future development of the private wealth management market in Hong Kong.
We did this ahead of our Asian Wealth Management Forum – our flagship event for 2019 -taking place on February 26th at the W Hotel in Hong Kong. As many of these topics will be discussed at the event.
Please view the website here.
This is part one in a four-part series which we will publish this week. The five sections cover the following key wide-angle topics: the abundant opportunities for private wealth management in Hong Kong; the many challenges that exist and will arise; the evolution of regulation and compliance and the industry’s hopes; In comparison to ten years ago; What has changed in private wealth management in Hong Kong? What has not changed?; What the wealth industry needs to survive and prosper in the decade ahead.
What are the main opportunities that will continue to drive growth in private wealth management in Hong Kong?
The massively growing HNW wealth in China represents a world of opportunity as China’s ultra-wealthy spread their wings - we all know that more and more PRC billionaires already have, or are applying for, citizenship in Hong Kong. Additionally, the more ‘normal’ ranks of PRC high-net-worth individuals (HNWIs) are also growing apace. Moreover, the mass affluent are expanding their geographical and assets/investments horizons. Chinese banks, as well as new competitors, are challenging the established foreign banks and wealth managers, but for those that adopt the right strategies, riches await.
The ageing of first and second generation HNWIs in Hong Kong and elsewhere in Asia presents the market with a great need to advise on strategies, structures and assets for the protection, preservation and transfer of wealth from the older generations.
Digitalisation and the incorporation and exploitation of fintech solutions will enable wealth managers to leverage their capabilities to cope with the growing numbers and rising expectations of younger-generation HNWIs.
The uncertainties in the global economy and in the mainstream capital markets will encourage more HNWIs to consider private debt, private equity, precious metals and a range of other alternative assets, which can generally offer providers higher, justifiable fees and longer-term, more sustainable relationships with the clients.
While the ‘uber-wealthy’ around Asia will offer the richest rewards for wealth management firms, the rapid growth of more ‘normal’ private wealth across Asia and the phenomenal increase in mass affluence in the region provide a remarkable platform for expansion.
There is optimism that despite Beijing’s more hands-on approach to regulation there will also be some liberalisation, for example of capital flows between Hong Kong and mainland China. In that case, Hong Kong’s perception as a hub for quality, independent advice and solutions will translate to the rapid growth of assets under management.
The growth of the independent and external asset managers – IAMs and EAMs – will continue, given the growth potential for the underlying wealth market and despite the high office, residential, educational and other costs of Hong Kong.
The rise of single and multi-family offices and the growing sophistication of their needs will boost all segments of the wealth management industry in Hong Kong, providing the suppliers continue to offer quality, integrity, transparency and consistency. Hong Kong has been cleverly positioning itself as a family office hub for the region and is competing head-to-head with Singapore.
Hong Kong’s sound legal and regulatory framework and its depth of wealth management, capital markets and investment banking expertise provide rich ground for the evolution of more innovative and tailored investment products and solutions. The industry is supported by excellent services and logistics infrastructures.
More from Michael Stanhope, Hubbis