A man walks along the Central business district in Hong Kong, Sept 8, 2021.
(KIN CHEUNG / AP)
Hong Kong’s private wealth management industry is growing firmly while assets under management are expected to grow by 6 to 10 percent in the following five years, according to a report co-released on Monday by the Private Wealth Management Association and KPMG China.
The report indicates that in Hong Kong the industry saw an increase of 25 percent in its AUM to HK$11.3 trillion ($1.45 trillion) last year, despite being COVID-19 and a tough macroeconomic environment.
Hong Kong remains one of the world’s most robust private wealth management hubs.
Amy Lo, Chairman of Private Wealth Management Association's executive committee
Most of the private wealth management institutions interviewed are optimistic on the industry, slightly lifting their growth forecast made in 2020.
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“Hong Kong remains one of the world’s most robust private wealth management hubs,” said Amy Lo, chairman of PWMA’s executive committee. She said she expects that the cross-boundary financial services under the Wealth Management Connect program, which will start this month at the soonest, would lead to a growth in private management product services.
The report shows that 41 percent of the industry’s AUM come from the Chinese mainland, and the respondents expect that figure to increase to 51 percent in five years.
Lo added that although the asset management industry faces challenges, she is optimistic about the Chinese market in the long term.
Meanwhile, the PWMA noted that 72 percent of respondents believe that more than 10 percent of their AUM will flow into environmental, social, and governance investments, which indicates a significant change in the medium term.
Business in the Guangdong-Hong Kong-Macao Greater Bay Area as well as the services around the ESG investments will bring great opportunities and strong growth to the asset management business, according to the PWMA.
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In addition, 85 percent of the surveyed institutions see targeting the second (or third) generation as the biggest opportunity for the private wealth management market in Hong Kong, while 73 percent of respondents believe that attracting more family offices to set up in Hong Kong is also important for the growth of the industry.