Just a few years ago, most onlookers had little doubt about the outcome of the rivalry between Hong Kong and Singapore as Asia’s wealth management hub of choice, citing the sheer potential from the size of the mainland China market. What seemed like a foregone conclusion then is now looking increasingly uncertain. Here are the top 5 reasons Singapore is beating Hong Kong and winning the race.
1. More mature wealth clients
Client segments that book out of Singapore tend to be more sophisticated largely due to the age of wealth from multi-generational families in countries like India or Indonesia. This is key to bottom lines.
Whilst Hong Kong may have the advantage of ample wealth from Greater China, the quality of these accounts in terms of near-term profitability is questionable. In addition to limited market penetration with fee-based offerings, a significant portion of the assets are dormant and only generating custody fees as they tend to be strategic long-term equity holdings, especially amongst ultra-high net worth individuals (though banks are increasingly seeking to leverage these holdings by lending against the assets or securities lending).
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