Asia’s super rich are also branching out. In 2011, those hailing from China had 19 percent of their investments overseas; by 2017, that had risen to 56 percent, according to Bain. Popular diversification plays include real estate in places such as Canada and Australia, while financial products in Hong Kong are popular with mainland Chinese.
Spreading It Around
Hong Kong was the most-favored investment destination outside of mainland China by Chinese investors last year
The ranking of women among the region’s wealthy is climbing, too. Some are so-called gold-collar professionals – highly skilled knowledge workers who have made their money from early business ventures – while others have turned a passion into a profit. Take Mobike co-founder Hu Weiwei. The 36-year-old combined environment worries with urban eco-mobility, creating a $3.4 billion startup in the process.
According to the UBS and PwC Billionaires Report 2017, Asia’s female billionaire population has grown by almost 13 times from 2005 to 2016 to represent 6 percent of the region’s total count. In addition, about 70 percent of Asia’s female billionaires are self-made, compared to a global average of 26 percent. Yet, most private banks still don’t cater adequately to women’s needs, despite counting plenty of females as employees, says Ian Woodhouse, an associate partner at financial services consultancy Orbium.
Follow the Money
Asia ex-Japan accounted for 23 percent of global wealth in 2016, and is set to reach almost one-third by 2021
That’s a concern, because serving high-net-worth clients can be expensive. Private bankers don’t come cheap and MiFID II rules that require asset managers to pay separately for research and trading add to the cost. According to Woodhouse, robo-advisers can charge as little as 0.2 percent of assets under management whereas private bankers need at least 80 basis points.
There’s also competition from family offices. London-based Campden Wealth Ltd. says an estimated 17 percent of the world’s 5,300 single-family offices are based in Asia.
For some, the solution has been to build scale – DBS Group Holdings Ltd. bought the Asian wealth operations of Australia & New Zealand Banking Group Ltd., while Swiss wealth manager Lombard Odier is forging local partnerships.
Bigger may be better, but I am perhaps not alone in knowing a few family offices that are helmed by progeny of the wealthy (children who have been educated at Harvard and hold MBAs and the like) and want a lot more from their private bankers than they’re currently getting.
There must be more of a pivot toward serving Asia’s young wealthy. That’s where the real riches lie.