Hong Kong's Private Wealth Managers Brace for Slower Growth Amidst Global Challenges
Hong Kong's private wealth management sector is bracing for a period of slower growth in assets under management (AUM) over the next five years, according to the Hong Kong Private Wealth Management Report 2023 released by the Private Wealth Management Association (PWMA). A survey conducted between June and August 2023 indicates that approximately 15 percent of Hong Kong's private wealth managers anticipate annual AUM growth of less than 5 percent, a figure higher than the 8 percent reported in a similar survey conducted in 2022.
The report highlights that challenging external factors, notably the macroeconomic environment and market volatility, continue to be the primary concerns for the industry. Additionally, geopolitical tensions between the United States and China have emerged as a significant worry, ranking second on the list of concerns. The industry views recent US Executive Orders, particularly those restricting investment in Chinese technology, as indicators that the US-China tensions are unlikely to ease in the foreseeable future.
Despite these challenges, the report identifies potential sources of growth in Hong Kong's private wealth market. Wealth managers are looking towards Mainland China, the next generation, and family offices as avenues for expansion. Furthermore, there is a notable shift in focus towards developing new sources of wealth, particularly in Southeast Asia and the Middle East.
The findings of the report, based on a survey and interviews conducted by PWMA in collaboration with KPMG China, indicate the industry's cautious outlook and the need to diversify strategies amidst evolving global economic and geopolitical dynamics. Over 80 percent of PWMA member firms and more than 200 clients participated in the survey, providing valuable insights into the sentiments and expectations of Hong Kong's private wealth management sector.
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