Growth in Asia’s wealth management industry is expected to soften significantly over the next two years, according to a Barclay’s Capital survey of Asian wealth managers, in which one fifth of practitioners predicted the market would trend downwards until 2011.
China and India continue to be viewed as the most attractive markets in Asia, both in terms of potential for business expansion and expected revenue growth, the survey, of some 123 Barclays Capital client wealth managers with more than $5trn under management, found.
Around 40% of those surveyed by BarCap said they expected wealth management revenue in non-Japan Asia to grow by less than 5%, while an equal number predicted it would grow by more than that amount.
“A quarter of the participants believe that China will continue to grow above 15% in the next two years,” BarCap said in a summary of its findings.
“Sentiment was most negative on Korea, with 29% expecting negative returns.”
Innovation versus regulation
The survey respondents said “adapting to a changing regulatory environment and product innovation” were among the most difficult challenges they faced. "Being able to differentiate from competitors”, cited by last year’s survey respondents as their greatest challenge, has dropped to fifth place, apparently reflecting the reduction in competing firms.
The increasing need for wealth managers to provide greater product innovation is being “exacerbated” by “an overriding trend for clients to seek simpler and more transparent products”, the BarCap summary of the report’s findings noted.
Barclays Capital conducted the survey prior to its fourth annual Wealth Management Conference, which took place in Singapore last week, and released the findings today.
BarCap’s Asia Pacific head of distribution Kevin Burke said it was "encouraging to see that around 40% of the region’s leading wealth managers anticipate very respectable growth in their non-Japan Asia revenues over the next two years”.
