Asian high net worths turn to banks
Private banks are gaining significant traction in advising Asia's high net worth individuals (HNWIs) who are increasingly turning to investment property and international equities in the face of market uncertainty, according to new research released out of Hong Kong.
The research, part of the Asian Wealth Index conducted by specialist financial services research firm, East & Partners, revealed a significant rise in the number of HNWIs using private banks to manage their wealth stating that it was up from just 9.9 per cent in June, 2013, to over 24 per cent today.
The East and Partners analysis said that Asia's HNWIs were continuing to focus on international equities as an asset class, and were recalibrating their investment portfolios accordingly.
It said the movement to international equities had largely been at the expense of domestic equities, where the allocation had dwindled from 23.6 per cent of the portfolio in June 2013 to 19.2 per cent in the latest round with the domestic allocation also forecast to fall to 18.7 per cent in the next six months.
The report also found that investment property remained the single most popular asset class, representing 34.2 per cent of the portfolio.
Commenting on the index East & Partners Asia chief executive, Lachlan Colquhoun said volatile and uncertain markets were having an impact.
"The move to international equities was a result of the search for returns, which have been flat across many other asset classes, and it is going be interesting to see if recent events on the Chinese stock market have an impact on this trend in the next round," he said. "HNWIs want returns, but they are also risk averse, which is also reflected in the overall popularity of property as an asset class. If stock markets are considered too risky, then we'll see an impact on the trend."
Recommended for you
There is one specific risk that is a significantly higher concern for financial services directors compared to companies overall and is impacting their risk appetite, according to the AICD.
Global fund managers are shunning bonds, with the asset class seeing the largest drop in allocations in more than 20 years.
Australian Ethical has seen its funds under management reach $10 billion, driven by organic customer growth and superannuation contributions.
Financial advisers will have access to private equity investments run by WTW for the first time as it launches a pooled fund to provide savers with access to traditionally institutional assets.
