The share of Hong Kong clients with a discretionary portfolio management account has surpassed Singapore, according to a study by financial software provider Avaloq, despite the market's historical tendency towards self-directed investing.
Numerous private banks aspire to achieve higher levels of asset penetration for discretionary portfolio management (DPM) services. This is due not only to its ability to generate predictable recurring income but also to manage client wealth under a disciplined approach.
Although Hongkongers are well known for their tendency towards self-directed investing, they are also increasingly open to delegation. According to a study by Avaloq, 61 percent of respondents in Hong Kong said they currently invest via DPM, marking a substantial increase compared to 2022.
«In Hong Kong, we see private banks and wealth managers increasingly move away from the traditional transaction fee model to a flat fee model dominated by DPM services,» said Pascal Wengi, managing director for APAC, the Middle East and Africa at Avaloq. «This trend is partly driven by regulatory demands for improved fee transparency as well as financial institutions’ desire for more predictable revenue streams.»
Singapore, Japan
DPM penetration by the number of clients in Hong Kong surpassed Singapore (53 percent) and Japan (22 percent), the two other Asian markets surveyed. There were no figures indicating the amount of assets invested.
The survey was conducted online in February and March 2023 with 3,000 investors aged 18 and above in six European and Asian markets: Germany, Switzerland, the UK, Hong Kong, Japan and Singapore (500 respondents per market). 57 percent were mass affluent ($250,000 to $1 million in investable assets), 37 percent were high net worth individuals ($1 million to $50 million) and 6 percent were ultra-high net worth individuals (more than $50 million).
