Wealth firms cash in on rich mainlanders

Business | Bloomberg and Reuters 13 Sep 2018

Hong Kong's wealth managers expect to double the money they handle over the next five years, benefiting from China's rich looking to diversify their holdings.

Assets under management will hit about US$2 trillion (HK$15.6 trillion) by 2023, and non-banks, boutique advisers and wealth technology firms will win market share from traditional managers, Hong Kong's Private Wealth Management Association said in a report published with KPMG China yesterday.

Almost half the wealth will come from China.

"Hong Kong sees itself as well-positioned to take advantage of that in terms of new wealth coming in to be managed," said Paul McSheaffrey, head of banking and capital markets for Hong Kong at KPMG China.

Wealth managers predict the industry's assets under management will grow from 10 percent to 20 percent each year through 2023, adding that the stock trading link, which allows investors to buy and sell Chinese stocks via Hong Kong, is a key differentiator for the city.

By 2023, the market share of external asset managers will rise to as high as 20 percent from less than 5 percent now.

Meanwhile, HSBC Holdings (0005) aims to increase its Asia private banking headcount by two-thirds in five years and double client assets in eight as it eyes a bigger share of the business in the world's fastest-growing wealth market. "Asia is the key driver for future profitability in the private bank ... it's been the driver for growth even through the difficult times and it's always remained profitable," said Peter Boyles, CEO of HSBC's global private banking business.

HSBC's Asia private bank will add 700 staff in various roles including relationship managers, product specialists and family wealth planners by 2022, said Siew Meng Tan, Asia Pacific head of private banking.

It aims to double Asia-based client assets by 2025, as it expands its presence in Hong Kong and Singapore and vies for a bigger share of offshore Chinese wealth.

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