Indonesia Wealth Management High Net Worth (HNW) Investors 2022
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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.
Indonesia wealth management market 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.
Market Dynamics in the Indonesia Wealth Management Market
- Earned income is a major source of wealth for HNWs, and Indonesia is home to many highly paid executives.
- The Indonesian government runs the National Entrepreneurship Development program, with a target of increasing the entrepreneurship ratio by 2024.
- 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.
- The basic materials sector – the largest contributor to HNW wealth in Indonesia – was significantly affected by the crisis in 2021.
- Financial services are Indonesia’s second largest source of HNW wealth.
- To foster female participation in the field of entrepreneurship, several programs have been initiated that support women in establishing their businesses.
- In December 2020, the WeEmpowerAsia program was initiated by UN Women in Indonesia, an organization that works for gender equality and female empowerment.
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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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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Major Asset Classes of Wealth Allocation Preferences 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 Major Asset Allocation Preferences
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Major Asset Classes of Offshore Investment Preferences 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 Major Asset Classes of 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.
- Robo-advice accounts for a share of the Indonesian HNW portfolio. 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.
World Bank
Economic Research Institute for ASEAN and East Asia
Table of Contents
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Frequently asked questions
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What are the key investment preferences for HNW investors in the Indonesian wealth management market?
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.
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What are the key reasons for expatriation for HNW investors in the Indonesian wealth management market?
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.
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What are the major asset classes of wealth allocation for HNW investors in the Indonesian 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 Indonesian wealth management market.
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What are the major asset classes of offshore investment 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.
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