By Stuart Rutledge, Head of Global Trust RBC Wealth
Asia-Pacific has now passed North America and is home to more
wealthy individuals than any other region, according to the
Asia-Pacific Wealth Report 2012, recently released by RBC Wealth
Management and Capgemini. Despite a tough year of volatile markets,
the number of high net worth individuals (HNWI) in Asia-Pacific
grew by 1.6% in 2011 to 3.37 million.
The region's population is still largely concentrated in
just three countries - Japan, China and Australia – which
together account for over three quarters (76.1%) of the population.
Despite experiencing a difficult year, Japan remains the largest
market, accounting for over 54% of the region's HNWIs. China,
which has witnessed growth of 5.2% in its HNWI population, now
makes up 16.7% of the region's individuals with at least $1
million at their disposal and it remains the single largest
opportunity for wealth managers in the region.
While the number of wealthy individuals in Asia-Pacific grew in
2011, their aggregate wealth actually declined marginally. This was
due to losses amongst individuals with more than $5 million. This
group is typically committed to higher-risk and less-liquid assets,
such as hedge funds, private equity or commercial real estate
markets, that can lose value quickly in declining markets and can
be hard to sell amid the volatility that characterised much of
The rise in the HNWI population in Asia has also driven the
development of Singapore and Hong Kong as offshore wealth centres
of course. However the increasing internationalisation of wealth
means that these locations are more likely to complement, rather
than rival, Jersey's activities. Jersey HNW clients are already
demanding more exposure to the emerging Asian economies and greater
diversification of overseas holdings - both of which can be easily
provided via centres such as Hong Kong and Singapore.
Jersey firms looking to enter the region obviously need to give
a great deal of thought as to how they approach the business to
maximize the opportunities available. They will need to set
realistic and sensible targets based on factors such as resource
capacity, understanding the market trends and client profile, and
tailor offerings accordingly. Many clients from the region are
entrepreneurs who require liquid or near-liquid investments and
particular products to meet their short-term business needs. Many
of these same clients have also only recently qualified as HNWIs
and expect a highly hands-on approach to managing their portfolios.
The succession planning opportunities for Jersey in terms of these
first-generation HNWIs are considerable.
There is no doubt that increasingly HNW assets are going to be
held in Asia-Pacific offshore wealth centres in future. There is a
huge opportunity for Jersey to act as a welcome partner to these
centres thanks to its reputation for stability, rule of law, access
to the UK market and history of innovation.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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