Malaysia Wealth Management – High Net Worth (HNW) Investors

Malaysia Wealth Management Report Overview

Around 60% of Malaysia’s HNW population are over 60yrs, making retirement and inheritance planning services key. The HNW population in the country is dominated by men, but female HNW investors (particularly entrepreneurs) constitute an increasingly attractive target segment as well.  Malaysia has various programs and initiatives designed to boost female entrepreneurship. According to a 2021 International Labor Organization (ILO) survey, some women business owners in Malaysia lacked knowledge and understanding of financial services and products, had insufficient capital, or did not understand how to apply for financial services. To overcome these barriers, in May 2022, the Ministry of Entrepreneur Development and Cooperatives of Malaysia and the ILO launched a series of workshops for women entrepreneurs to gain external finance.

The Malaysia wealth management market report analyzes the investment preferences, service requirements, and portfolio allocation of Malaysia’s HNW investors. The report is based on GlobalData’s proprietary Global Wealth Managers Survey.

Malaysia Wealth Management Market Dynamics

An overwhelming majority of HNW individuals in Malaysia derive their wealth through entrepreneurship or earned income. Given that entrepreneurs have more complex financial needs as both their private and business activities need managing, wealth managers will find this segment to be more lucrative than professionals. Targeting entrepreneurs early on even if they do not qualify as HNW yet has the potential to create goodwill in the long term.

In 2022, despite the global economic downturn and volatile market conditions, the Malaysian entrepreneurial segment remained resilient. In 2022, several new companies were registered in Malaysia which can be attributed to various government initiatives that support entrepreneurs and SMEs. HNW wealth from individuals who inherited and continued a business represents another growing source of income for wealth managers.

For more insights into the Malaysia wealth management market dynamics, download a free report sample

Malaysia Wealth Management Market - Investment Preferences

The key investment preferences in the Malaysia wealth management market are advisory asset management, automated investment services, discretionary asset management, and execution-only asset management. Advisory mandates lead in terms of managed HNW wealth in Malaysia, but their forecast demand was among the lowest in 2021. In addition, contrary to other wealth markets, discretionary mandates ranked low in forecast demand. Meanwhile, automated investment services had high forecast demand for HNW investors in 2021.

Malaysia Wealth Management Market - Reasons for Expatriation of HNW Investors

The drivers of expatriation to Malaysia are better lifestyle conditions, better opportunities for expats’ children, business start-ups, job transfer, and political or economic instability in the origin country, among others. Better lifestyle conditions and political or economic instability act as the main expatriation factors. Malaysia is considered an expat-friendly country in terms of lifestyle conditions such as affordable housing, low cost of living, recreational facilities, well-developed healthcare and transportation infrastructure, a multicultural society, and an English-speaking population.

Malaysia Wealth Management Market Analysis by Reasons for Expatriation, 2021 (%)

For more expatriation reason insights into the Malaysia wealth management market, download a free report sample

Malaysia Wealth Management Market - Asset Allocation Classes

The major asset allocation classes for HNW investors in the Malaysia wealth management market include equity, bonds, cash and near-cash, real estate, commodities, and alternatives. Equities constituted the majority of Malaysia total asset allocation in 2021 despite a stock market downturn. The high proportion of Muslims within Malaysia’s population and the popularity of Islamic finance drives equity holdings. Financial instruments such as futures and derivatives are banned under Sharia law and tools such as speculation and leverage are also forbidden. Thus, the core equity market provides one of the only ways for Islamic investors to access riskier returns.

Malaysia Wealth Management Market by Asset Allocation Classes, 2021 (%)

For more asset allocation class insights into the Malaysia wealth management market, download a free report sample

Malaysia Wealth Management Market Asset Classes Outlook (2021)

• Equity
• Bonds
• Cash and Near Cash
• Real Estate
• Commodities
• Alternatives

Scope

• Expats constitute just 8.7% of the local HNW population. However, they represent an attractive target market thanks to their more complex service requirements.
• Robo-advice accounts for just 2% of the Malaysian HNW portfolio. The demand for robo-advisory services is expected to grow at the strongest rate as compared to other investment mandates over the next year.
• The average Malaysian HNW investor offshores 18.6% of their wealth abroad. This proportion is expected to increase over the next 12 months.

Key Highlights

• Expats constitute just 8.7% of the local HNW population. However, they represent an attractive target market thanks to their more complex service requirements.
• Robo-advice accounts for just 2% of the Malaysian HNW portfolio. The demand for robo-advisory services is expected to grow at the strongest rate as compared to other investment mandates over the next year.
• The average Malaysian HNW investor offshores 18.6% of their wealth abroad. This proportion is expected to increase over the next 12 months.

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 current and future demand for different asset classes among HNW individuals.