Renewed confidence is returning as Asia’s wealth managers view the outlook for 2012 with optimism, while growth is overtaking liquidity as the most important product feature, a recent survey has revealed.

Date: Apr 27, 2012

Tags: Barclays Wealth, Growth, China, Indonesia, Equities

Renewed confidence is returning as Asia’s wealth managers view the outlook for 2012 with optimism, while growth is overtaking liquidity as the most important product feature, a recent survey has revealed.

Barclays Wealth’s survey of the industry in Asia included responses from 109 participants from 65 firms across eight countries – including banks, private banks, broker dealers, fund managers and insurance companies.

Overall, the survey showed that the long-term trend of wealth accumulation in the region is expected to continue. Nearly two-thirds of respondents said they expect the number of millionaires in Asia to grow this year between 6% and 15%. A further 23% of respondents said they think the growth rate of this segment will top 15%.

Consistent with results in previous years, 54% of wealth managers expect China’s growth rate in terms of assets under management (AUM) to remain above 15%. However, Indonesia has this year overtaken India as the country likely to have the second-highest AUM growth, with 36% of respondents expecting it to grow at a rate of 15% or higher.

Further, the ultra high net worth segment will continue to develop as it increases in significance, making up 24% of overall AUM in 2012, said the survey, up from 19% in 2011. That trend is expected to continue, with 70% of wealth managers predicting this segment to increase in importance over the next two years.

In terms of investment strategies and product features, growth has emerged as the most important feature for 2012, according to 60% of the wealth managers surveyed.

Among individual asset classes, equities continue to be the most actively-used. And when asked about how their clients are hedging against inflation, respondents pointed to gold as the preferred option.

However, despite the optimism, challenges potentially impacting the industry include:  adapting to a changing regulatory environment; and hiring and retaining talent.