Singapore Wealth Management – High Net Worth (HNW) Investors 2022

Pages: 33 Published: March 15, 2022 Report Code: GDFS0571CI

Most HNW individuals in Singapore make their fortune through earned income. However, the local HNW segment is older, highlighting the need for wealth preservation strategies and efficiently passing on wealth through the generations via trusts or simple inheritance planning. In addition, a multi-service proposition is a must as demand is expected to increase across all planning services and mandates.

The Singapore HNW investors wealth management report analyzes the investing preferences and portfolio allocation of Singapore’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 Singapore HNW investors wealth management market?

Singapore’s HNW population remains dominated by men. However, it is expected the proportion of females to grow as more women enter high-ranking positions and engage in entrepreneurial endeavors. The majority of HNW individuals in Singapore have reached or are approaching retirement age, with a relatively low proportion of HNWs aged 50 or below among both men and women. As a result, there are various investment programs aimed at wealth and succession planning for HNWs. For example, Wealthbeing by AIA’s Platinum Legacy (IX) is a US dollar-denominated investment-linked plan that offers a combination of wealth management services and succession planning.

The vast majority of HNW individuals in Singapore have accumulated their wealth either through earned income or entrepreneurship. Considering the often more complex needs of entrepreneurs, wealth managers able to cater to this segment’s private and business needs will find them a lucrative target market. However, Singapore’s wealth market is becoming increasingly crowded and most private banks offer dedicated services aimed at entrepreneurs.

What are the key investment preferences in the Singapore HNW investors wealth management market?

The key investment preferences in Singapore HNW investors wealth management market are advisory asset management, automated investment services, discretionary asset management, and execution-only asset management.

The importance of a varied approach is also demonstrated by the high demand levels across all types of asset management services. Advisory and discretionary services are almost equal in terms of current demand levels, with discretionary having a slight edge. However, advisory mandates lead in terms of forecast demand. This highlights that clients want control amid rising volatility, but the expert advice of wealth managers remains valuable to them. An increase in demand for advisory and discretionary services offers opportunities for traditional wealth managers to grow. However, there has been a shift in demand benefiting automated investment services. This is explained by the growing sophistication of such services. The technology can handle ever larger datasets, thereby improving investment algorithms and enabling faster decision-making.

Singapore HNW investors wealth management market, by investment preferences

Singapore HNW investors wealth management market, by investment preferences

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What are the key drivers for expatriation in the Singapore wealth management market?

The key drivers for expatriation in Singapore’s wealth management market include job transfer, retirement, business start-up, tax efficiencies, better opportunities for children, better lifestyle conditions, and political/economic instability.

The single most important reason for HNW expatriation to Singapore is to start a business. This means wealth managers looking to build up a dedicated expat proposition cannot afford to ignore this sizable segment. Indeed, it is not only the size of this segment that makes HNW expat entrepreneurs a lucrative target market. Those migrating to start a new business are also likely to be more profitable thanks to their greater servicing demands, relying on their wealth manager for their private as well as business banking needs.

Singapore HNW investors wealth management market, by drivers for expatriation

Singapore HNW investors wealth management market, by drivers for expatriation

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What are the major asset classes of wealth allocation in the Singapore wealth management market?

Equity, cash and near cash, bonds, property, alternatives and commodities are the major asset classes of wealth allocation in the Singapore wealth management market.

Bond holdings are forecast to experience the most pronounced increase in demand in 2022. This can be attributed to potential moves by the Monetary Authority of Singapore to tighten the city-state’s monetary policy by raising interest rates. This would have a direct positive impact on the yield generated by domestic bonds. Consequently, wealth managers need to acknowledge the current risk-off attitude and propose strategies that consider investors’ heightened concern for safety while not compromising overall returns.

Singapore HNW investors wealth management market, by asset classes of wealth allocation

Singapore HNW investors wealth management market, by asset classes of wealth allocation

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What are the major asset classes of offshore investments in the Singapore wealth management market?

The major asset classes of offshore investment in the Singapore wealth management market include equity, cash and near-cash products, bonds, property, alternatives, and commodities.

Offshore portfolios are heavier on property and alternatives, with the two accounting for over half of all assets. Meanwhile, offshore portfolios are much lighter on commodities and cash and near-cash products. This is likely because there is little point in acquiring cash or near-cash options offshore, but there is a significant advantage in doing so with property.

Singapore HNW investors wealth management market, by asset classes of offshore investment

Singapore HNW investors wealth management market, by asset classes of offshore investment

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Who are the key players in the Singapore wealth management market?

The key players in the Singapore wealth management market are AIA and DBS. DBS represents a good example of a bank that has responded to this trend, supporting expats not only in their country of choice but Asia-wide. DBS offers a range of products targeted at entrepreneurs, such as an entrepreneur account specifically designed for start-ups.

Market report scope

Key drivers 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 Equity, 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
Key investment services Advisory Asset Management, Automated Investment Services, Discretionary Asset Management, and Execution-Only Asset Management
Key players AIA and DBS

Scope

  • The market for robo-advisory services is growing in the HNW space in Singapore, with multiple wealth managers entering the space.
  • Singapore HNW individuals spread their investments in line with the Asia Pacific average, with asset classes such as bonds, equities, and property dominating the portfolio mix.
  • The average Singapore HNW investor offshores 42.3% 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 Singapore HNW investors and react proactively to forecast changes in demand.

Key Players

AIA

DBS

Table of Contents

Table of Contents

Demographics

Expats

Investment Style Preferences

Asset Allocation Preferences

Offshore Investment Preferences

Products and Services

Appendix

Frequently Asked Questions

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