In the last few years, not only we have seen a growing number of $ billionaires across the globe, but also witnessed a higher number of UHNWI (Ultra High Net Worth Individuals), particularly in Asia. As a subsequent outcome, to manage such large wealth, a number of private banking / wealth management options have entered the fray.
Before we look into wealth management services for such HNWI and UHNWI clients, let us have a quick look into the global scenario
In 2021, Banks like Citi and HSBC tried to leverage their wealth management hubs and capabilities in Asia. And what would be the reason for that? Let’s look at how AUM and HNWI’s are spread worldwide for better understanding.
According to PWC’s 2020 report, Global Assets under Management (AUM) i.e., the market value of the investments that a person or entity manages on behalf of clients, have grown by more than 40% in last 5 years. In terms of volume North America stays at the top, but considering growth rate, we can see that APAC and Latin America are higher compared to the rest.
Now let’s look at the HNWI population across the globe.
According to Capgemini in their 2019 report, when we analyze the global HNWI population & wealth distribution APAC is ranking first with a population of 6.5 Million and Wealth of $22.2 Trillion.
Also, according to UBS ‘Billionaires Report 2020’, APAC has the highest UHNWI population of 831 which is 38% of global count.
What is happening in Asia?
According to PWC, the growth that the emerging economies have seen in the region, prior to pandemic, and the fact that of increasing client assets through not only pension funds from a growing ageing population, insurance assets, Sovereign Wealth Funds, but also from the expanding amount of HNWIs and Mass affluent population generating income from other investment vehicles.
From BCG research, ’Global Wealth 2020', it is seen that the largest segment base is Retail, who are looking at Equities, currency and deposits. Wealth managers have a huge opportunity of over USD 60 trillion by targeting the retail clients.
What about the providers?
Among the traditional players (Asian and Foreign banks) and the disruptive players (wealth techs and challenger banks), the traditional players are still leading from the AUM perspective, but it could be only a matter of time, when the adoption and usage of the disruptive players could far surpass those who might be slow to change.
What are the clients needs ?
There are a lot more nuances about the Asian clients that are much different from their western peers. I am not going into those details in this article, but one thing to note would be that the portfolio optimization needs to sincerely take care of this while personalizing their offers in these markets.
The clients and the disruptive players have so far aligned on 3 aspects —
- End to end Customer Experience
- Personalization
- Localization
Though everyone has these capabilities to deploy, we will have to see how soon they adapt to the changing behavior of their growing user base, entrench the ecosystem uses and gain mind share by applying digital technologies to map their lifestyles, goals and conscious decisions