Latest News:  

English>>Business

China drives Asia's wealth management

By Edmund Koh (China Daily)

10:40, July 11, 2013

Asia Pacific remains one of the most exciting wealth management markets globally. Driving this is China's important high-net worth, or HNW, market, contributing to over 50 percent of the growth in the region, excluding Japan, by 2015.

HNW wealth in China's first-tier cities represents about 20 percent of China's HNW wealth, while in second-tier cities it represents more than 30 percent. Although offshore investments are becoming more popular, main investment activities are still carried out onshore in China.

This is consistent with our observation that 90 percent of wealth in the Asia-Pacific resides in the domestic markets.

Coupled with the restrictions imposed by cross-border regulations, the new wave of growth will inevitably focus on the domestic business. Hence, UBS' strategy in the region is to expand our international business in Singapore and Hong Kong, and invest further in organic growth in domestic businesses in China, Japan, Hong Kong, Singapore, Australia and Taiwan.

New business

China, in particular, represents one of the most important sources of new business opportunities for UBS across our businesses anywhere in the world. UBS' domestic wealth management services are offered via a dual platform, which best positions us to respond to changes in the regulatory environment and to deliver a full range of products and services to our clients.

If we were to examine the general profile, a large majority of our clients from China, like the rest of Asia, tend to be successful private entrepreneurs in their first or second generation of wealth who are still in wealth creation or wealth accumulation mode.

Generally, they tend to have relatively higher risk appetites compared with HNWI in Europe, are keen to put their assets to work and are very open to taking a more active role in their investments, both in terms of the selection and management of their investments. This frequently translates into the desire to reinvest in their business or in a familiar industry related to their business, where they feel they can make much higher returns.

In such situations, we often caution clients about the dangers of concentration risk where a wrong call could have severe implications for both the business and family wealth.

Recent global economic crises, such as the financial crisis and the European debt crisis, have led to a growing realization among Chinese clients that China's economy is no longer decoupled from the global economy.

With the low interest rate environment, rising inflation in Asia and the debasing of currencies by central banks via quantitative easing, we have seen Chinese clients increasingly keen to participate in global investment opportunities to diversify risks and maximize returns.

While traditional asset classes such as equities, bonds, mutual funds and real estate continue to form the majority of their portfolios, we are also seeing growing interest in alternative investments such as hedge funds, private equity, commodities, and innovative structured products.

Given that many of our Chinese entrepreneur clients are still actively involved in their businesses, the question of how to grow their businesses, whether through debt or capital market activities or M&A, remains a top consideration.

Their requirements can range from raising capital for business expansion to listing the company to buying or selling companies. Hence, what Chinese clients are looking for is an integrated platform with global reach which allows them to draw on the combined expertise of specialists from wealth management, investment bank and global asset management to work with them on their investment, corporate and family wealth needs.

On the family front, it is never too early to start thinking about succession management to ensure that wealth and control of the family business is properly placed into the hands of the next generation. Like the rest of Asia, this is a very important topic for our Chinese clients. Until recently, succession planning was often focused on putting in place an asset holding structure such as a trust to achieve asset protection and pass on wealth to the next generation for the purposes of a transition between two generations. However, increasingly we have observed that successful entrepreneurial families in Asia, including those in China, want to plan for the very long term, sometimes for perpetuity, leaving a true legacy. In that sense the transition is not only about asset succession or business succession from one generation to the next but about values succession.


【1】 【2】



We Recommend:

How did Chinese solar industry go bankrupt?

Born to lead: 2nd gen of Chinese tycoons

Chinese graduates’ unconventional jobs

China's largest railway terminal officially opens

Dazzling gems shine at Beijing jewelry show

Boeing 787 Dreamliner to serve Beijing-Haikou route

New high-speed rail linking Nanjing, Ningbo opens

Jiaxing-Shaoxing Sea Bridge in E China

Chinese investors' happiness and sadness

Email|Print|Comments(Editor:WangXin、Chen Lidan)

Leave your comment0 comments

  1. Name

  

Selections for you


  1. Chinese, Russian naval forces in drill

  2. Chinese,Russian naval forces leave for drill

  3. Iranian female ninjas show combat skills

  4. Children's hospital full of patients

  5. Pushy parents turn matchmaking events

  6. China's weekly story
    (2013.6.28-7.5)

  7. Shining WTCC grid girls

  8. Top 10 Chinese art works

  9. China Pan-Asia Stone Expo kicks off

  10. China's 50 best CEOs named

Most Popular

Opinions

  1. Inflow of 'hot money' tackled, expert says
  2. Caution urged in seeking experts from abroad
  3. China didn't cause German solar firms' bankruptcy
  4. China, U.S. discuss cyber security
  5. Why are we obsessed with selfies?
  6. Israel keen on luring Chinese tourists
  7. 'Bernanke shock' necessary
  8. Safety first for baby formula
  9. Defense paper shows Tokyo's hysteria
  10. Shanghai investor sentiment drops

What’s happening in China

Rainstorms flood more than 10,000 cars in underground garages in Wuhan

  1. One-tenth of condoms failed tests in Guangdong
  2. Free bus rides in rush hours to end for seniors
  3. 2 dead, 7 injured in central China blast
  4. China confirms 132 H7N9 cases, 43 deaths
  5. China completes overhaul of dairy standards