As Thailand's wealth management market continues to develop, investors are likely to be increasingly interested in investing overseas, to diversify their portfolios. But they face various regulatory restrictions.
Date: May 24, 2013
Various barriers to investing in offshore products present a significant drawback, and hurdle, to the continued development of wealth management in Thailand, according to panel members at Hubbis’ Thailand Wealth Management Forum 2013 in Bangkok in mid-May.
One of the most popular investment options onshore are deposits, said speakers. Typically simple to understand, most investors consider deposits to be an effective retirement tool.
However, low interest rates are leading investors to consider alternative avenues.
Despite this broader appetite, the market remains quite restricted, limited the opportunities for investors to diversify when things turn sour. "Clients are fairly happy but due to the recent rally in the stock markets, clients are looking for alternatives,” said Swee Meng Mok, senior vice president and head of wealth management at AIRA Securities. “They are basically looking for capital protection.”
He explained that high net worth (HNW) individuals cannot easily invest directly in structured products overseas. Most have to go through financial institutions in order to do so, due to the control held by the Bank of Thailand.
Vira-anong C. Phutrakul, managing director and retail banking head for Citibank in Thailand, added that insurance plays a part. “But there will be changes in 2016, when each customer will only be secured up to Bt1 million per institution, “ she explained. This will be another driver away from bank deposits.
Panel members suggested that due to the sheer amount of money currently sitting as bank deposits, a gradual change would be most realistic.