Hong Kong Private Wealth Management Report 2024: $1.15 Trillion AUM, Top 5 Hong Kong Origin of AUM are Mainland China & Hong Kong 67%, America 12%, Southeast Asia 3%, Europe 4% & Japan 2%, Top 6 Impact on Hong Kong Private Wealth Management Industry are Interest Rates, China Economy, US & China, Economic Recession, Global Elections & Regulatory Uncertainty in China, Top 5 Investment Themes are Artificial Intelligence & Machine Learning, Biotechnology & Healthcare Innovation, Virtual assets, Commodities, ESG & Sustainable investing
13th December 2024 | Hong Kong
The Hong Kong Private Wealth Management Association (PWMA) & KPMG China have released the Hong Kong Private Wealth Management Report 2024, providing key insights into Hong Kong private wealth management industry. Private Banking & Wealth Management AUM in 2023 – $1.15 trillion (HKD 9.02 trillion). Top 6 Impact on Hong Kong Private Wealth Management Industry – Interest rates, China economy, US & China, Economic recession, Global elections, Regulatory uncertainty in China. Top 6 Concerns on Hong Kong Private Wealth Management Industry – Macroeconomic environment & market volatility, Geopolitical tensions, Regulatory environment, Financial risk, Technology & information security, Talent attraction & retention. Booking Centres demand for Hong Kong – Increased 34%. Booking Centres demand for Singapore – Increased 52%. Preference for Hong Kong over other Wealth Management Centres – Agree 13% / Neutral 59% / Disagree 28%. Top 3 Constraints for Hong Kong as a Wealth Management Centre – Hong Kong political future, Competition from regional financial centres, Evolving regulatory landscape. Family Offices is Important Source of Business – Agree 86%. Top 5 Hong Kong Origin of AUM in 2023 – Mainland China & Hong Kong 67%, America 12%, Southeast Asia 3%, Europe 4%, Japan 2%. Sentiments on Hong Kong Private Wealth Management Market in next 5 years – Optimistic 76%. Top 6 Opportunities to grow Hong Kong Wealth Management Market – Hong Kong as a hub for family offices / super-connector, Expanding wealth in Chinese Mainland, Second / Third generation, Young entrepreneurs, New markets such as Southeast Asia & Middle East, IPO fund raising activities. Top 4 Business Priorities for Private Wealth Management Firms – Prepare for inter-generational wealth transfer & capture next-gen clients, One-bank collaboration, Digitalisation of platform & operations, Expand product offerings. Top 5 Digital Channels for Customers in next 5 years – Client statement, Investment portfolio view, Transaction records, Research insight, Interactions with RMs. Top 6 Trading Channels for Customers in next 5 years – Funds, Equities, Forex, Fixed income, Structured products, Alternative investments. Greater Bay Area (GBA) initiatives will be important for offshore Hong Kong business – Agree 69%. Top 4 Challenges of Greater Bay Asia Cross-Boundary Wealth Management Connect – Individual investment limits are inadequate, Barriers to cross-boundary services, Restrictions on types of Southbound products available, Limited geographical coverage. Top 5 Target region for source of wealth – China Mainland, Southeast Asia, Middle East, Europe, Japan. Top 2 Target Client Segment to Expand in next 3 to 5 years – $5 m to $10 million (28%) and $10 m to $50 million (25%). Top 5 Investment Themes – Artificial Intelligence / Machine Learning, Biotechnology / Healthcare innovation, Virtual assets, Commodities, ESG & Sustainable investing. Top 4 challenges faced in promoting AI adoption – Cybersecurity & data privacy concerns, Regulatory & compliance concerns, Data quality & governance concerns, Cost in setting up the AI infrastructure. Top 3 AI uses for client review & advisory services – Intelligent portfolio stress testing & risk analysis, Personalised financial goal tracking & projections, Tailored investment & wealth management recommendations. Top 2 AI uses for client retention – Intelligent client reporting & performance visualisation, Predictive analytics for market trends. Top 2 AI most effective in customer journey – Risk profiling & suitability assessment, Account opening &onboarding. Top 2 AI most effective in customer journey in next 5 years – Risk profiling & suitability assessment, Product recommendation & portfolio construction. See below or key findings & summary | View report here
” Hong Kong Private Wealth Management Report 2024: $1.15 Trillion AUM, Top 5 Hong Kong Origin of AUM are Mainland China & Hong Kong 67%, America 12%, Southeast Asia 3%, Europe 4% & Japan 2%, Top 6 Impact on Hong Kong Private Wealth Management Industry are Interest Rates, China Economy, US & China, Economic Recession, Global Elections & Regulatory Uncertainty in China, Top 5 Investment Themes are Artificial Intelligence & Machine Learning, Biotechnology & Healthcare Innovation, Virtual assets, Commodities, ESG & Sustainable investing “
Hong Kong Private Wealth Management Report 2024: $1.15 Trillion AUM, Top 5 Hong Kong Origin of AUM are Mainland China & Hong Kong 67%, America 12%, Southeast Asia 3%, Europe 4% & India 1%, Top 6 Impact on Hong Kong Private Wealth Management Industry are Interest Rates, China Economy, US & China, Economic Recession, Global Elections & Regulatory Uncertainty in China, Top 5 Investment Themes are Artificial Intelligence & Machine Learning, Biotechnology & Healthcare Innovation, Virtual assets, Commodities, ESG & Sustainable investing
The Hong Kong Private Wealth Management Association (PWMA) & KPMG China have released the Hong Kong Private Wealth Management Report 2024, providing key insights into Hong Kong private wealth management industry. See below or key findings & summary | View report here
Hong Kong Private Wealth Management Report 2024
Summary
- Private Banking & Wealth Management AUM in 2023 – $1.15 trillion (HKD 9.02 trillion)
- Top 6 Impact on Hong Kong Private Wealth Management Industry – Interest rates, China economy, US & China, Economic recession, Global elections, Regulatory uncertainty in China
- Top 6 Concerns on Hong Kong Private Wealth Management Industry – Macroeconomic environment & market volatility, Geopolitical tensions, Regulatory environment, Financial risk, Technology & information security, Talent attraction & retention
- Booking Centres demand for Hong Kong – Increased 34%
- Booking Centres demand for Singapore – Increased 52%
- Preference for Hong Kong over other Wealth Management Centres – Agree 13% / Neutral 59% / Disagree 28%
- Top 3 Constraints for Hong Kong as a Wealth Management Centre – Hong Kong political future, Competition from regional financial centres, Evolving regulatory landscape
- Family Offices is Important Source of Business – Agree 86%
- Top 5 Hong Kong Origin of AUM in 2023 – Mainland China & Hong Kong 67%, America 12%, Southeast Asia 3%, Europe 4%, Japan 2%
- Sentiments on Hong Kong Private Wealth Management Market in next 5 years – Optimistic 76%
- Top 6 Opportunities to grow Hong Kong Wealth Management Market – Hong Kong as a hub for family offices / super-connector, Expanding wealth in Chinese Mainland, Second / Third generation, Young entrepreneurs, New markets such as Southeast Asia & Middle East, IPO fund raising activities
- Top 4 Business Priorities for Private Wealth Management Firms – Prepare for inter-generational wealth transfer & capture next-gen clients, One-bank collaboration, Digitalisation of platform & operations, Expand product offerings
- Top 5 Digital Channels for Customers in next 5 years – Client statement, Investment portfolio view, Transaction records, Research insight, Interactions with RMs
- Top 6 Trading Channels for Customers in next 5 years – Funds, Equities, Forex, Fixed income, Structured products, Alternative investments
- Greater Bay Area (GBA) initiatives will be important for offshore Hong Kong business – Agree 69%
- Top 4 Challenges of Greater Bay Asia Cross-Boundary Wealth Management Connect – Individual investment limits are inadequate, Barriers to cross-boundary services, Restrictions on types of Southbound products available, Limited geographical coverage
- Top 5 Target region for source of wealth – China Mainland, Southeast Asia, Middle East, Europe, Japan
- Top 2 Target Client Segment to Expand in next 3 to 5 years – $5 m to $10 million (28%) and $10 m to $50 million (25%)
- Top 5 Investment Themes – Artificial Intelligence / Machine Learning, Biotechnology / Healthcare innovation, Virtual assets, Commodities, ESG & Sustainable investing
- Top 4 challenges faced in promoting AI adoption – Cybersecurity & data privacy concerns, Regulatory & compliance concerns, Data quality & governance concerns, Cost in setting up the AI infrastructure
- Top 3 AI uses for client review & advisory services – Intelligent portfolio stress testing & risk analysis, Personalised financial goal tracking & projections, Tailored investment & wealth management recommendations
- Top 2 AI uses for client retention – Intelligent client reporting & performance visualisation, Predictive analytics for market trends
- Top 2 AI most effective in customer journey – Risk profiling & suitability assessment, Account opening &onboarding
- Top 2 AI most effective in customer journey in next 5 years – Risk profiling & suitability assessment, Product recommendation & portfolio construction
Hong Kong Private Wealth Management Report 2024
1) Hong Kong Private Wealth Management Industry
Hong Kong Private Banking & Wealth Management AUM Overview:
- AUM in 2023 – $1.15 trillion (HKD 9.02 trillion)
- 2023 vs 2022 AUM Change – Increased by +0.6% from $1.15 trillion (HKD 8.96 trillion), Market return -3.2% and Net inflow of +3.8%
AUM Overview (USD)
- 2016 – $796 billion
- 2017 – $1 trillion
- 2018 – $976 billion
- 2019 – $1.16 trillion
- 2020 – $1.45 trillion
- 2021 – $1.36 trillion
- 2022 – $1.15 trillion
- 2023 – $1.15 trillion
AUM Overview (HKD):
- 2016 – HKD 6.2 trillion
- 2017 – HKD 7.8 trillion
- 2018 – HKD 7.6 trillion
- 2019 – HKD 9.1 trillion
- 2020 – HKD 11.3 trillion
- 2021 – HKD 10.6 trillion
- 2022 – HKD 8.96 trillion
- 2023 – HKD 9.02 trillion
Top 6 Impact on Hong Kong Private Wealth Management Industry:
- Central banks actions on interest rates
- Concerns about the Chinese economy
- Tensions between the U.S. and China
- Fears of an economic recession
- Geopolitical uncertainty due to global elections
- Regulatory uncertainty within certain industries in China
Top 6 Concerns on Hong Kong Private Wealth Management Industry:
- Macroeconomic environment & market volatility
- Geopolitical tensions
- Regulatory environment
- Financial risk (credit, market, liquidity, capital)
- Technology & information security, including cybersecurity
- Talent attraction & retention
2) Booking Centres
Booking Centres – Demand of new accounts to be opened / client assets to be held
Hong Kong:
- Increased – 34%
- The same – 52%
- Reduced – 14%
Singapore:
- Increased – 52%
- The same – 34%
- Reduced – 14%
Others (Dubai, New York, London, Zurich etc):
- Increased – 21%
- The same – 48%
- Reduced – 31%
Preference for Hong Kong over other Wealth Management Centres
- Strongly agree – 3%
- Somewhat agree – 10%
- Neutral – 59%
- Disagree – 28%
- Strongly disagree – 0%
Top 8 Constraints for Hong Kong as a Wealth Management Centre:
- Concerns about Hong Kong’s political future – 28%
- Competition from other regional financial centres – 21%
- Evolving regulatory landscape – 14%
- Limited access to Chinese Mainland’s assets – 10%
- High cost of living & doing business – 9%
- Lack of government support – 6%
- Insufficient private banking talent pool – 6%
- Limited depth of advice and services in areas such as tax, succession planning, family governance – 3%
- Limited access to other international assets – 3%
3) Family Offices
Family Offices is Important Source of Business for Organizations:
- Strongly agree – 31%
- Somewhat agree – 55%
- Neither agree nor disagree – 7%
- Somewhat disagree – 7%
4) Hong Kong AUM Origin
Origin of AUM in 2023:
- Mainland China & Hong Kong – 67%
- America – 12%
- Southeast Asia – 3%
- Europe – 4%
- Japan – 2%
- India – 1%
- Middle East – 1%
- South Korea – 1%
- Others – 9%
Origin of AUM in next 5 years:
- Mainland China & Hong Kong – 71%
- America – 18%
- Southeast Asia – 7%
- Europe – 3%
- Middle East – 2%
- India – 1%
- Japan – 1%
- South Korea – 1%
- Others – 6%
5) Hong Kong Wealth Management Market Growth Outlook
Sentiments on Hong Kong Private Wealth Management Market in next 5 years:
- Highly optimistic – 14%
- Moderately optimistic – 62%
- Neutral – 21%
- Somewhat pessimistic – 3%
Top 6 Opportunities to Grow Hong Kong Wealth Management Market:
- Develop Hong Kong as a hub for family offices / super-connector
- Capitalise on the expanding wealth in Chinese Mainland
- Targeting the second (or third) generation
- Targeting young entrepreneurs
- Explore new markets such as Southeast Asia & Middle East
- Attracting more IPO fund raising activities in Hong Kong
Top 4 Business Priorities for Private Wealth Management Firms:
- Prepare for inter-generational wealth transfer & capture next-gen clients
- One-bank collaboration
- Digitalisation of platform & operations
- Expand product offerings
Top 5 Current Digital Channels for Customers:
- Client statement – 90%
- Transaction records – 72%
- Investment portfolio view – 59%
- Research insight – 57%
- Interactions with RMs – 53%
Top 5 Digital Channels for Customers in next 5 years:
- Client statement – 96%
- Investment portfolio view – 92%
- Transaction records – 88%
- Research insight – 80%
- Interactions with RMs – 74%
Top 6 Current Trading Channels for Customers
- Equities – 72%
- Funds – 55%
- Forex – 48%
- Fixed income – 34%
- Structured products – 28%
- Alternative investments – 17%
Top 6 Trading Channels for Customers in next 5 years:
- Funds – 85%
- Equities – 81%
- Forex – 78%
- Fixed income – 67%
- Structured products – 56%
- Alternative investments – 41%
Greater Bay Area (GBA) initiatives will be important for offshore Hong Kong business in next 5 years:
- Strongly agree – 31%
- Somewhat agree – 38%
- Neither agree nor disagree – 21%
- Somewhat disagree – 7%
- Strongly disagree – 3%
Top 4 Challenges of Greater Bay Asia Cross-Boundary Wealth Management Connect:
- Individual investment limits are inadequate
- Barriers to cross-boundary services
- Restrictions on types of Southbound products available for investment by China Mainland clients
- Limited geographical coverage (9 cities in GBA)
6) Target Clients
Target region for source of wealth:
- China Mainland – 38%
- Southeast Asia – 21%
- Middle East – 15%
- Europe – 6%
- Japan – 4%
- Americas – 3%
- Others – 10%
- No Plans – 3%
Target Client Segment to Expand in next 3 to 5 years:
- Below $5 million – 16%
- $5 m to $10 million – 28%
- $10 m to $50 million – 25%
- $50 m to $200 million – 18%
- More than $200 million – 13%
7) Clients / Investors Outlook
Top 6 Investment Themes:
- Artificial Intelligence / Machine Learning – 29%
- Biotechnology / Healthcare innovation – 18%
- Virtual assets (e.g., cryptocurrencies, non-fungible tokens etc.) – 15%
- Commodities (e.g., gold) – 15%
- Environmental, Social, Governance (ESG) / Sustainable investing – 13%
- Infrastructure development – 6%
- Others – 5%
Plans on Virtual Assets:
- Adopting a wait-and-see approach – 79%
- Currently developing virtual assets trading &/or custody services for clients – 17%
- Planning to invest in virtual assets trading &/or custody services for clients in the next 2-3 years – 4%
Firms AUM currently invested in Virtual Assets:
- Less than 5% of AUM – 96%
- 6% to 10% – 2%
- 11% to 20% – 2%
- More than 20% of AUM – 0%
Firms AUM currently invested in ESG:
- Less than 10% of AUM – 89%
- 11% to 20% – 4%
- 21% to 30% – 4%
- More than 30% of AUM – 3%
Firms AUM to be invested in ESG in next 5 years:
- Less than 10% of AUM – 64%
- 11% to 20% – 25%
- 21% to 30% – 4%
- More than 30% of AUM – 7%
8) Impact of Artificial Intelligence (AI) on clients & industry
Perceived Impact of AI adoption on client experience & satisfaction in your firm:
- Drastically improved – 15%
- Improved – 39%
- Neutral – 15%
AI technology improved operational efficiency & productivity in your firm:
- Significantly – 8%
- Moderately – 48%
- Slightly – 24%
- Not at all – 20%
Top 9 AI most effective in customer journey:
- Risk profiling & suitability assessment – 18%
- Account opening &onboarding – 17%
- Product recommendation & portfolio construction – 15%
- Portfolio management & rebalancing – 14%
- Performance reporting & client communication – 12%
- Initial client outreach & engagement – 10%
- Financial needs assessment & goal setting – 8%
- Ongoing financial planning & advice – 4%
- Prospect identification & targeting – 3%
Top 9 AI most effective in customer journey in next 5 years:
- Risk profiling & suitability assessment – 18%
- Product recommendation & portfolio construction – 17%
- Account opening &onboarding – 15%
- Portfolio management & rebalancing – 15%
- Performance reporting & client communication – 15%
- Prospect identification & targeting – 8%
- Financial needs assessment & goal setting – 5%
- Ongoing financial planning & advice – 3%
- Initial client outreach & engagement – 3%
Top 5 AI uses for client retention:
- Intelligent client reporting & performance visualisation – 24%
- Predictive analytics for market trends – 23%
- Automated rebalancing & portfolio optimisation – 18%
- Personalised investment recommendations &insights – 18%
- Proactive client communication & engagement – 17%
Top 4 Private Wealth Management views on how AI will improve client experience:
- Enhanced data-driven decision-making & advisory services
- Proactive alerts & notifications for important financial events
- Faster response times & more efficient issue resolution
- Customised product & service recommendations
Top five AI uses for client review & advisory services
- Intelligent portfolio stress testing & risk analysis – 25%
- Personalised financial goal tracking & projections – 23%
- Tailored investment & wealth management recommendations – 22%
- Predictive market & economic scenario modelling – 20%
- Generational wealth transfer & succession planning – 10%
Relationship Managers roles in AI era:
- Relationship Cultivator – 40%
- Role remains largely unchanged – 34%
- AI Interpreter – 11%
- Advisory Specialist – 9%
- AI Oversight Manager – 6%
Notes
- Relationship Cultivator: Building and nurturing personal relationships, with AI handling most technical and analytical aspects
- The role remains largely unchanged, with AI serving as a supplementary tool rather than a transformative force
- AI Interpreter: Explaining AI-generated insights, bridging the gap between technology and client understanding
- Advisory Specialist: Focusing on complex, personalised advisory services
- AI Oversight Manager: Overseeing and managing AI-driven processes
Most important competencies for Relationship Managers in AI era:
- Adaptability & continuous learning – 41%
- Relationship skills – 31%
- Complex problem-solving – 10%
- Emotional intelligence – 7%
- Data interpretation – 7%
- Cross-cultural communication – 3%
Top 4 challenges faced in promoting AI adoption:
- Cybersecurity & data privacy concerns
- Regulatory & compliance concerns
- Data quality & governance concerns
- Cost in setting up the AI infrastructure
Firm made sufficient effort in AI-based skillsets in last 1 or 2 years:
- Strongly agree – 7%
- Somewhat agree – 24%
- Neutral – 28%
- Disagree – 34%
- Strongly disagree – 7%
Top 4 AI skill gaps in industry:
- Domain expertise in PWM
- Explainable AI model & model interpretability techniques
- Machine learning model development & deployment
- Advanced data engineering capabilities
Top 4 priority actions for government to support transition to an AI-driven future:
- Supporting continuous learning programmes for existing professionals
- Facilitating international partnerships for AI development
- Promoting and funding AI-focused apprenticeship programmes
- Funding AI startups focused on private wealth management solutions
Hong Kong Private Wealth Management Report 2024
The ninth annual Hong Kong Private Wealth Management report, jointly authored by the Private Wealth Management Association (PWMA) and KPMG China, provides an in-depth view into the industry landscape, evolving challenges, and emerging growth opportunities, with the added lens of AI’s growing impact. The report is largely based on a survey of 35 PWMA member institutions – approximately 80% of the Association’s PWM Institution members – and supplemented by the results of the SFC’s Asset and Wealth Management Activities Survey 20231. We also added an additional lens of AI adoption in this year’s survey and interviews, with insights from industry executives, front office personnel, in-house technology staff, and technology vendors.
Private Wealth Management Association (PWMA)
The Private Wealth Management Association (PWMA) was established in 2013 with a mission to foster the growth and development of the private wealth management industry in Hong Kong. PWMA aims to position Hong Kong as the leading private wealth management hub in the region through its main objectives of:
- Setting standards to promote proper conduct, integrity and professional competence on the part of PWMA practitioners;
- Providing professional training and development opportunities to maintain the enhanced level of competence expected of relevant practitioners in the private wealth management industry;
- Providing a forum for members to discuss and exchange views on trends, developments and areas of common concern, and work collaboratively to address industry-wide challenges;
- Providing a unified industry voice and representation on PWM related matters, and a channel to maintain ongoing dialogue with government officials, regulators, trade bodies and other industry associations and stakeholders; and
- Building the private wealth management community through industry events, forums and committees.
KPMG China
KPMG China has offices located in 31 cities with over 14,000 partners and staff, in Beijing, Changchun, Changsha, Chengdu, Chongqing, Dalian, Dongguan, Foshan, Fuzhou, Guangzhou, Haikou, Hangzhou, Hefei, Jinan, Nanjing, Nantong, Ningbo, Qingdao, Shanghai, Shenyang, Shenzhen, Suzhou, Taiyuan, Tianjin, Wuhan, Wuxi, 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. KPMG is the brand under which the member firms of KPMG International Limited (“KPMG International”) operate and provide professional services. “KPMG” is used to refer to individual member firms within the KPMG organisation or to one or more member firms collectively. KPMG firms operate in 143 countries and territories with more than 273,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. Each KPMG member firm is responsible for its own obligations and liabilities. 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 license in the Chinese Mainland. KPMG was also the first among the Big Four in the Chinese Mainland 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.
Sign Up / Register
Caproasia Users
- Manage $20 million to $3 billion of assets
- Invest $3 million to $300 million
- Advise institutions, billionaires, UHNWs & HNWs
Caproasia Platforms | 11,000 Investors & Advisors
- Caproasia.com
- Caproasia Access
- Caproasia Events
- The Financial Centre | Find Services
- Membership
- Family Office Circle
- Professional Investor Circle
- Investor Relations Network
Monthly Roundtable & Networking
Family Office Programs
The 2024 Investment Day
- March 2024 - Hong Kong
- March 2024 - Singapore
- July 2024 - Hong Kong
- July 2024 - Singapore
- Sept 2024 - Hong Kong
- Sept 2024 - Singapore
- Oct 2024 - Hong Kong
- Nov 2024 - Singapore
- Visit: The Investment Day | Register: Click here
Caproasia Summits
- The Institutional Investor Summit
- The Investment / Alternatives Summit
- The Private Wealth Summit
- The Family Office Summit
- The CEO & Entrepreneur Summit
- The Capital Markets Summit
- The ESG / Sustainable Investment Summit
