Hong Kong Private Wealth Management Report 2021: AUM at $1.45 Trillion with 188,000 HNWIs
13th October 2021 | Hong Kong
The Private Wealth Management Association (PWMA) and KPMG China has released the 6th annual Hong Kong Private Wealth Management report, with Assets under management (AUM) growing +25% year-on-year to $1.45 trillion (HKD 11.3 trillion) in 2020, with 188,000 HNWIs in Hong Kong (+9.6%), and view targeting at 2nd (or 3rd) generation, Mainland Chinese market and family offices as the biggest driver of growth. (HNWI ~ High net worth)
” Hong Kong AUM Grows 25% to $1.45 Trillion, with 188,000 HNWIs “
6th annual Hong Kong Private Wealth Management Report
The report provides an in-depth view into the current landscape and how the industry continues to manage ongoing challenges. The report also examines growth opportunities and trends along important themes of technology, regulation and talent. The report is based on an online survey of PWMA member institutions – of which 33 of the 42 members responded, and a survey of more than 280 clients of member institutions, as well as interviews with industry executives, regulators and other industry stakeholders in Hong Kong. View: Report
Key Findings
- Assets under management (AUM) grew +25% year on year to $1.45 trillion (HKD 11.3 trillion)
- Net fund inflows to Private Wealth Management Industry $84.3 billion (HKD 656 billion)
- PWMA Members: 41% of AUM from Mainland China
- HNWIs: 188,000 in Hong Kong (+9.6%)
- Risk Appetite in next 12 months: 42% replied with significantly or slightly increased (compared to 29% in 2020)
- More trading activity with interests in equities and alternative investments.
- PWM AUM in listed equities: 45% YOY
- Hong Kong IPO proceeds raised in 2020: $51.1 billion (HKD 398 billion), contributing to a vibrant IPO market, and interest in listed equities
- Increasing interest in environmental, social and governance (ESG) and sustainable investing, virtual assets, and ‘new economy’ sectors.
- 97% of surveyed member institutions agreeing that providing sustainable investing advice and related products is increasingly important to clients.
- 69% of surveyed member institutions agree that their clients are increasingly interested in cryptocurrencies such as Bitcoin and other virtual assets
- 51% of surveyed clients want less than 1% of their portfolio invested in virtual assets
- 97% of surveyed PWM institutions currently do not allow for custody and trading of cryptocurrencies and other virtual assets.
85% of Survey: Targeting the 2nd (or 3rd) generation was identified as the biggest opportunity - 82% of Survey: further penetrating the mainland Chinese market
- 73% of Survey: attracting more family offices to set up in Hong Kong
Key Growth Drivers
- Mainland China both offshore and onshore – including the Greater Bay Area (GBA) – remaining a critical growth driver for the industry
- GBA Wealth Management Connect scheme as a key development
- ‘Targeting the 2nd (or 3rd) generation’ was identified as the biggest opportunity to grow the Hong Kong PWM market
- Attracting family offices remains a key focus area
- InvestHK set up a dedicated team in June 2021 to promote family office business in Hong Kong
- Investment in digital transformation is expected to increase significantly
- Emphasis on trading platforms, on-boarding solutions and compliance solutions
Amy Lo, Chairman, Executive Committee of PWMA:
“Hong Kong remains one of the world’s most robust private wealth management hubs and I’m extremely pleased to see the healthy growth of the industry in recent years. Mainland China has continued to be a key priority for our members, particularly with the launch of the Wealth Management Connect pilot scheme. We look forward to engaging with relevant authorities on how to expand the scope of the pilot scheme in the future.”
Peter Stein, CEO and Managing Director, PWMA:
“Servicing the next generation is clearly a major opportunity given the significant transfer of assets we are seeing between generations and the enormous wealth creation among NextGen entrepreneurs. Through our training and recruitment initiatives we try to support our members by helping them develop the talent they need to service this younger generation of clients.”
Paul McSheaffrey, Partner, Financial Services, Hong Kong, KPMG China:
“The COVID-19 pandemic has shed light on sustainability issues and raised private investors’ desire to align their portfolios with their own values. While many choose to play a role in addressing social issues, the heightened demand for ESG investment products from private wealth represents a significant growth opportunity for private banks in Hong Kong, Asia and globally.”
6th annual Hong Kong Private Wealth Management Report Launch:
About the Private Wealth Management Association
The Private Wealth Management Association is a Hong Kong-based voluntary association incorporated as a company limited by guarantee; it is separate from the Hong Kong Association of Banks. The main objectives of PWMA are: to better position Hong Kong as the private wealth management hub in the region by promoting and encouraging the growth and development of the PWM industry in Hong Kong and to help maintain Hong Kong’s status and competitiveness as a major financial centre; to provide a forum for members to discuss and exchange views on trends and challenges faced by the PWM industry and how to strategically position for these trends and challenges; to promote proper conduct, integrity and high standards of professional competence on the part of PWM practitioners; to provide industry representation and consultation in Hong Kong on PWM-related matters; and to serve as a channel for the private wealth management industry to maintain ongoing dialogue with governments, regulators, trade bodies and non-governmental organisations.
The PWMA currently has 42 Full Corporate Members and five Associate Members with a 11 member Executive Committee serving as the Association’s governing body. For more information about PWMA membership, please visit our website at: http://www.pwma.org.hk
About KPMG China
KPMG member firms and its affiliates operating in Mainland China, Hong Kong and Macau are collectively referred to as “KPMG China”. KPMG China is based in 29 offices across 26 cities with around 12,000 partners and staff in Beijing, Changsha, Chengdu, Chongqing, Dongguan, Foshan, Fuzhou, Guangzhou, Haikou, Hangzhou, Hefei, Jinan, Nanjing, Ningbo, Qingdao, Shanghai, Shenyang, Shenzhen, Suzhou, Tianjin, Wuhan, Xiamen, Xi’an, Zhengzhou, Hong Kong SAR and Macau SAR. Working collaboratively across all these offices, KPMG China can deploy experienced professionals efficiently, wherever our client is located.
KPMG is a global organisation of independent professional services firms providing Audit, Tax and Advisory services. We operate in 146 countries and territories and in FY20 had close to 227,000 people working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.
In 1992, KPMG became the first international accounting network to be granted a joint venture licence in mainland China. KPMG was also the first among the Big Four in mainland China to convert from a joint venture to a special general partnership, as of 1 August 2012. Additionally, the Hong Kong firm can trace its origins to 1945. This early commitment to this market, together with an unwavering focus on quality, has been the foundation for accumulated industry experience, and is reflected in KPMG’s appointment for multidisciplinary services (including audit, tax and advisory) by some of China’s most prestigious companies.
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