The Indonesian HNW population is mostly populated by men. Although this gender imbalance is less pronounced than in the Asia-Pacific region, it is still higher than in many other Southeast Asian countries, such as Singapore, Myanmar, Vietnam, and Thailand. Considering this high gender disparity, wealth advisors should carefully examine whether their current engagement strategies further fuel this imbalance and could alienate future clients.
The Indonesia wealth management market report analyzes the investing preferences and portfolio allocation of Indonesia’s HNW individuals. It profiles HNW investors in terms of their demographics, examines the allocation of HNW investors’ portfolios, analyzes their propensity to invest offshore, and explores their product and service demand.
What are the market dynamics in the Indonesia wealth management market?
Many of these new entrepreneurs in Indonesia have yet to pass the private banking threshold, merely qualifying as mass affluent. However, once a relationship has been established with a competing financial services provider, wealth managers will find it hard to break into this segment, which suggests they should reach out to entrepreneurs at an early stage. Savvy institutions will look at total client relationship balances with the bank before accepting or rejecting them for a private wealth program. Many will fall into the upper mass affluent category and hence do not appear on the radar of traditional private banks.
In Indonesia, inherited income represents a small share of the HNW wealth. However, with the current aging HNW cohort in the country, this is expected to increase. As wealth passes from generation to generation, wealth managers must update their offerings to meet the preferences of second and third generations who are either inheriting or planning to inherit the wealth of their families.
What are the key investment preferences for HNW investors in the Indonesia wealth management market?
The key investment preferences for HNW investors in the Indonesia wealth management market are advisory asset management, automated investment services, discretionary asset management, and execution-only asset management. While advisory mandates lead in terms of HNW AUM allocated, current demand is distributed relatively equally across different types of mandates, except for automated investment services, which are expected to attract a substantial increase in demand over the next year.
Indonesia wealth management market, by investment preferences
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What are the key reasons for expatriation for HNW investors in the Indonesia wealth management market?
The key reasons of expatriation for HNW investors in the Indonesia wealth management market are job transfer, retirement, business start-up, tax efficiencies, better opportunities for children, better lifestyle conditions, and political/economic instability. Better lifestyle conditions is one of the major drivers of expatriation.
Indonesia wealth management market, by reasons of expatriation
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What are the major asset classes of wealth allocation for HNW investors in the Indonesia wealth management market?
Equities, cash and near-cash, bonds, property, alternatives, and commodities are the major asset classes of wealth allocation for HNW investors in the Indonesia wealth management market. Cash and near-cash constitute the largest share, followed by property.
Indonesia wealth management market, by asset classes of wealth allocation
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What are the major asset classes of offshore investment for HNW investors in the Indonesia wealth management market?
The major asset classes of offshore investment for HNW investors in the Indonesia wealth management market include equity, cash and near-cash products, bonds, property, alternatives, and commodities. The average Indonesian HNW offshore portfolio is heavily exposed to alternatives and equity investments, which together constitute over half of all offshore assets.
Indonesia wealth management market, by offshore investment
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Market report scope
| Key investment preferences | Advisory Asset Management, Automated Investment Services, Discretionary Asset Management, and Execution-Only Asset Management. |
| Key reasons for expatriation | Job Transfer, Retirement, Business Start-Up, Tax Efficiencies, Better Opportunities For Children, Better Lifestyle Conditions, and Political/Economic Instability |
| Major asset classes of wealth allocation | Equities, Cash and Near Cash, Bonds, Property, Alternatives, and Commodities |
| Major asset classes of offshore investment | Equity, Cash and Near-Cash, Bonds, Property, Alternatives, and Commodities |
Scope
- Expats represent an attractive target market thanks to their more complex service requirements.
- The market for robo-advisory services is growing rapidly in the HNW space in Indonesia.
- Cash and near cash investments, property and bonds dominate the Indonesian HNW asset portfolio.
- The average Indonesian HNW investor offshores a significant percent of their wealth abroad. While this proportion is expected to increase over the next 12 months, the rise is expected to be less pronounced than in the wider region, indicating that many HNW investors are confident about the country’s economic recovery.
Reasons to Buy
- Develop and enhance your client targeting strategies using our data on HNW profiles and sources of wealth.
- Enhance your marketing strategies and capture new clients using insights from our data on HNW investors’ asset management style preferences.
- Tailor your investment product portfolio to match the current and future demand for different asset classes among HNW individuals.
- Develop your service proposition to match the demand expressed by Indonesian HNW investors and react proactively to forecast changes in demand.
Key Players
Table of Contents
List of Figures
Frequently Asked Questions
The key investment preferences for HNW investors in the Indonesian wealth management market are advisory asset management, automated investment services, discretionary asset management, and execution-only asset management.
The key reasons of expatriation for HNW investors in the Indonesian wealth management market are job transfer, retirement, business start-up, tax efficiencies, better opportunities for children, better lifestyle conditions, and political/economic instability.
Equities, cash and near-cash, bonds, property, alternatives and commodities are the major asset classes of wealth allocation for HNW investors in the Indonesian wealth management market.
The major asset classes of offshore investment for HNW investors in the Indonesian wealth management market include equity, cash and near-cash products, bonds, property, alternatives, and commodities.
