Feb 10, 2015

    HK beats S'pore in ranking of largest wealth managers

    SWITZERLAND kept its position as the world's largest wealth manager last year - but Hong Kong, Singapore and the United States are nipping at its heels with stellar growth.

    Hong Kong and Singapore, in particular, are attracting hefty levels of assets from new investors.

    With US$2 trillion (S$2.7 trillion) worth of assets, Switzerland has recorded an expansion of 14 per cent in assets under management (AUM) since 2008, a new Deloitte report showed yesterday.

    The report tracked asset classes such as bank account savings, securities, derivatives and stakes in companies and trusts.

    Despite maintaining its top position, Switzerland's growth paled in comparison with Hong Kong, whose AUM charged ahead by 142 per cent to US$640 billion over the same period - the biggest gain of any contender. It was in fifth place in the latest ranking.

    That surge was enough for Hong Kong to overtake Singapore, said Deloitte, though the Republic logged in "respectable" growth of 25 per cent to reach US$470 billion in assets last year. Singapore was in sixth place in the ranking.

    The Republic first lost ground to Hong Kong in 2012, falling by one spot to be the sixth-largest wealth management centre in the world.

    "Switzerland remains the world's largest centre, but other locations are catching up rapidly - especially Hong Kong, the US and Singapore," said Daniel Kobler, head of banking strategy, consulting at Deloitte Switzerland.

    The United Kingdom took second place with US$1.7 trillion of assets, a relatively modest rise of 13 per cent.

    The US closed in on Switzerland to take third place, after its assets grew by 28 per cent to US$1.4 trillion since 2008.

    In fourth spot, was a combination of Panama and the Caribbean where the value of AUM has fallen 47 per cent to US$900 billion.

    Deloitte noted that some countries achieved growth, but not through a net increase in new client assets, but rather a better performance by capital markets.

    Only Singapore and Hong Kong managed to attract new wealth in the last six years.

    Hong Kong was in top position with US$285 billion in net new assets while Singapore managed US$40 billion in net new assets.

    In fact, in terms of net new assets, Switzerland lost US$135 billion from 2009 to last year, and the US recorded an outflow of US$10 billion.

    The findings give a clear indication of the struggle that most wealth managers have faced in attracting new clients' assets.

    They also clearly show that the international wealth management industry is undergoing "unprecedented" changes, thanks to increased regulatory pressures and scrutiny on tax transparency, said Deloitte.

    The report also underscores an emerging trend of private clients withdrawing assets from international accounts, and placing new wealth with domestic managers.

    Despite the complexities of the industry, the total wealth under management rose 2.2 per cent from 2008 to reach US$8.2 trillion last year.

    This was driven by an increase in the number of millionaires, economic growth and a better capital market performance.