Wealth in Hong Kong: HNW Investors 2017

Summary

Hong Kong private wealth market is an attractive mix of East and West. Its long-established nature makes it larger and more diversified than is common in the rest of Asia Pacific. Local HNW investors have mainly sourced their wealth through a mixture of entrepreneurship and earned income. Convenience is an important factor driving uptake of professional advice, but investors are reluctant to relinquish control completely, preferring advisory mandates. However, this is slowly changing as we are seeing greater uptake of discretionary mandates, in part driven by expats.

Critical success factors
– Target expats: The Hong Kong HNW market has a large expat component and providers need to be able to onboard these much sought-after clients. This requires facilities that allow the onboarding process to begin remotely via a foreign branch in China, Taiwan, or the UK if possible, or via partnerships with relocation services.
– Lead with advisory asset management: Hong Kong client preferences are skewed towards advisory asset management, although demand for discretionary mandates is picking up. Wealth managers must have service options that align with this in order to attract clients.
– Be a one-stop shop: Demand for all planning services is on the rise, and given that convenience is an important factor driving uptake of advice, wealth managers able to pursue a multi-service proposition are at an advantage.

Key findings include in this report –
– Wealth managers need to be prepared for entrepreneurial clients with irregular incomes, heavy exposure to single industries, and finances entwined with their business.
– Expats are a sizable proportion of the local HNW market and should prove to be a lucrative segment.
– Advisory mandates continue to dominate in Hong Kong. However, HNW investors prefer to manage simple investments themselves to save on fees.
– The average portfolio is heavily exposed to equities, while only the bare minimum is held in cash and near-cash products to ensure liquidity.

HNW individuals in Hong Kong have sourced their wealth mainly through business ownership, although earned income plays a larger role in the market than elsewhere in Asia Pacific. The most prominent industry from which HNW individuals have amassed wealth is manufacturing, financial services, and property and real estate. However, various government initiatives will see other sectors, such as medical services and environmental industries, grow in importance, and wealth managers will find investors employed in these sectors an increasingly attractive target market. At the same time, wealth managers cannot afford to ignore the expat opportunity in Hong Kong, given that half of the HNW population in Hong Kong was born overseas.

The report “Wealth in Hong Kong: HNW Investors 2017” analyzes the investing preferences and portfolio allocation of HNW investors in the SAR. The report is based on our proprietary Global Wealth Managers Survey.

Specifically, this report provides the following –
– Profiles the average HNW investor in Hong Kong in terms of their demographics and analyzes the expat opportunity.
– Analyzes which wealth management mandates are preferred among HNW investors in Hong Kong and how the demand will develop looking forward.
– Examines the allocation of HNW investors’ portfolios into different asset classes and how the allocation is expected to develop in the future.
– Analyzes the product and service demand among HNW investors in Hong Kong.

Companies mentioned in this report: BNP Paribas Wealth Management, Credit Suisse, Vontobel, HSBC Private Bank.

Scope

– Wealth managers need to be prepared for entrepreneurial clients with irregular incomes, heavy exposure to single industries, and finances entwined with their business.
– Expats form a sizable proportion of the local HNW market and should prove to be a lucrative segment.
– Advisory mandates continue to dominate in Hong Kong. However, HNW investors prefer to manage simple investments themselves to save on fees.
– The average portfolio is heavily exposed to equities, while only the bare minimum is held in cash and near-cash products to ensure liquidity.

Reasons to buy

– Develop and enhance your client targeting strategies using our data on HNW profiles and source of wealth.
– Give your marketing strategies the edge required and capture new clients using insights from our data on HNW investors’ drivers for seeking investment advice vs self-directing.
– Tailor your investment product portfolio to match the current and future demand for different asset classes among HNW individuals.
– Develop your service proposition to match the service and product demand expressed by HNW investors in Hong Kong and react proactively to the forecasted change in demand.