According to RBC Wealth Management, the number of rich Asians surpassed North Americans for the first time last year. This growth in wealth is highlighted earlier this year, by the Boston Consulting Groups Wealth report indicating that Singapore’s small island nation had the highest percentage of millionaire households in the world for two years running.
The Asia- Pacific region in currently home to 3.37 million high net worth individuals(HNWI) – people with 1$ million or more to invest as compared to that of North America and Europe.
The Asia- Pacific Wealth Report compiled by Capgemini and RBC Wealth Management indicated that growth is likely to continue in the region and the HNWI population are likely to expand their wealth and assets. Stating that “Asia’s rich are looking more to offshore wealth centres that are closer to home, such as that of Singapore and Hong Kong in search for wider access to products and services, tax advantages and financial confidentiality.”
Currently Singapore has a head start on its rival Hong Kong in the race to becoming Asia’s top wealth management center. Singapore’s magnetism of being a safe haven continues to attract private investment from the region. Furthermore, the reports identified that Singapore’s single regulatory body, more transparent legal framework combined with its independence makes it a nation that has a strong reputation in the region with its emerging role as a private banking hub.
However the importance of these two cities as offshore banking centres has grown. A greater need exists to address the challenges of the offshore wealth management industry, including a lack of skilled talent, lower profitability and the cost of compliance and restriction placed on services due to the growing scrutiny faced. Hence according to the report compiled by Capgemini and RBC Wealth Management an emphasis needs to be placed on the “diversity of the backgrounds and expectation of rich clients” in order to keep up with “demand for tailored products and greater desire to play a more active role in managing their portfolios.”
Send us your views, or questions, about offshore banking. We would be interested to know what perceptions are and will be happy to answer questions.