Wealth Management in Singapore 2009

Date: October 1, 2009
Pages: 45
Price:
US$ 4,495.00
Publisher: Datamonitor
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)
ID: WB8DB4E692CEN
Leaflet:

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Wealth Management in Singapore 2009
Introduction

The global economic crisis has had a major effect on Singapore's onshore wealthy population, potentially causing them to lose faith in their wealth managers. To keep clients, wealth managers need to know what this lucrative customer wants from them, in terms of products, services and interaction.

Scope

*HNW demographic and attitudinal attributes based on our Wealth Management Market Leaders Survey 2009

*Extensive primary research from 17 wealth management companies Highlights their strategies for revenue growth, acquiring and keeping clients

Highlights

For the wealthy population living in Singapore, 2008 was a particularly tough period to bear. Business owners faced weak operating conditions, the equity market fell and properties lost value. After the first nine months of 2009,global economies are starting to appear more stabilized and a growing expectation of recovery is starting to emerge.

Datamonitor believes that Singaporean HNWs will return to risky assets over the short-term as economic conditions improve and investment assets increase in value.

Clients in Singapore have superior financial product knowledge compared to their Asia Pacific counterparts, however they struggled to fully understand how market conditions impacted on their portfolio. This presents an opportunity for wealth managers to add some real value to their offering by providing educational services for clients if needed.

Reasons to Purchase

*Understand the HNW population's investments by sector and geography, appetite for risk, and reasons for choosing/leaving their wealth service

*Assess the threats and opportunities for wealth managers by understanding how peers are planning to grow revenues, acquire and keep clients

OVERVIEW

Catalyst
Summary
Methodology
Executive Summary
The wealth of Singaporean investors suffered at the hands of the global financial crisis
HNWs become more defensive at the start of 2009, however as economic conditions continue to improve the expectation is that they will return to real estate investments and equities
While personal relationships and increased face to face contact from wealth managers are vital at this time, wealthy clients are also viewing financial stability as a key provider attribute
Table of Contents
Table of Figures
Table of Tables
Singapore's Wealth
Singapore produced strong growth in the lead up to the financial crisis, however 2008 was a tough time for investors
Labor market conditions weakened for Singaporean workers in 2008
Entrepreneurs struggled to grow their wealth as business conditions deteriorated in Singapore
Events in the global economy sparked selling pressure in the local stock market
Singaporean house prices declined for the first time in four years in Q3 2008
The wealth data in 2009
The Singaporean HNW Investor
Singaporean HNWs became more defensive in 2009, reducing their property fund exposure and investing heavily in cash
Cash and near cash represent an important asset class for Singaporean HNWs
Wealth management service implication: provide clients with regular market commentary and offer forward-looking opinions on the Singaporean and offshore investment markets
Innovative example from the US: Pyxis mobile is providing a complete mobile communications interface to allow wealth managers to contact their clients while on the move
Singaporean HNWs are expected to increase their investment in real estate funds and reduce their exposure to cash
Wealth management service implication: help investors position themselves for the global economic recovery
Innovative example from Singapore: SG Private Banking creates global centre of expertise for real estate products
Singaporean HNWs have superior knowledge of investments, however client contact is still vitally important
HNWs are risk seeking individuals and exhibit higher-than-average knowledge of financial products
Wealth management service implication: providers should be focused on furthering their clients' financial education
Innovative example from Switzerland: UBS is investing resources in its clients
Innovative example from China: Standard Chartered aims to educate second generation wealth holders
Singaporean HNWs place high importance on personal relationships when doing business, however they are less demanding for face to face relationship management than the regional average
Wealth management service implication: wealth managers need to increase contact with their clients through the most appropriate avenues
Innovative example in Singapore: Standard Chartered enhances relationship management access and convenience for its wealthy clients
The global downturn has shifted the demands of Singaporean investors
Due to uncertainty in the markets, the majority of HNWs want investments that they can easily understand
Wealth management service implication: wealth managers must look to develop simple, transparent products to preserve their clients' wealth
Innovative global example: Deutsche Bank has been listing innovative exchange traded funds around the world
The Singaporean Wealth Manager's View
Over the next two years, HNWs will be demanding protected products, advisory asset management and exchange traded funds
The majority of HNW clients will be demanding capital protected products and advisory asset management over the next two years
Wealth managers expect to focus their resources on foreign currency investments over the next two years
While personal relationships are still key in HNWs' choice of wealth managers, they are focusing more on the financial stability of providers in today's market
Financial stability is very important to HNWs in Singapore
Singaporean wealth managers see personal relationships and technology as their biggest strength
Offering financial planning is seen as the best method for increasing share of wallet
Financial planning has increased in importance this year
Singaporean wealth managers have less frequent contact with their clients compared to the Asia Pacific average
Singaporean wealth managers contact their clients over the phone less frequently than their Asia Pacific counterparts
Singaporean wealth managers are behind their Asia Pacific counterparts at getting in front of their clients
The overall performance of the portfolio and specific news events are what HNWs most want to talk about when they speak to their wealth manager
Appendix
The drivers of growth in the wealthy population
Income growth (combined with inflation, changes in GDP by sector, household savings rates and debt levels)
Investment returns (market capitalization, interest rates and bond yields)
The following measures are not, in themselves, drivers of wealthy population growth
Market capitalization
GDP
The following measures are not drivers of wealthy population growth except under very restricted circumstances
Primary residence value growth
Inheritance
Methodology
Wealth Management Market Leaders Survey 2009
Global Wealth Model
The UK sub-model
Global sub model (for all other countries)
Forecasting methodology
Continuous refinement to the understanding of liquid wealth distribution
Datamonitor's wealth numbers compared with other wealth numbers
Bibliography
Definitions
Asia Pacific
Further reading
Ask the analyst
Datamonitor consulting
Disclaimer

LIST OF TABLES

Table 1: What proportion of your HNWs' portfolios is allocated to the following five asset classes?
Table 2: HNWs' portfolio allocation now versus in 2 years' time
Table 3: HNW attributes on a scale of 1 to 4 (1 = very low, 2 = somewhat low, 3 = somewhat high, 4 = very high)
Table 4: HNW attributes on a scale of 1 to 4 (1 = very low, 2 = somewhat low, 3 = somewhat high, 4 = very high)
Table 5: What are HNWs demanding today?
Table 6: Over the next two years, how much demand do you expect from HNWs for the following product areas?
Table 7: What product areas will your wealth management service focus most resources on in the next 2 years?
Table 8: What will determine HNWs' choice of wealth management service over the next two years?
Table 9: What are your company's biggest strengths and weaknesses today?
Table 10: What is the most effective means of increasing share of wallet today?
Table 11: On average, how often do your relationship managers speak by phone to each HNW client?
Table 12: On average, how often do your relationship managers speak in person to each HNW client?
Table 13: When speaking with clients, what do they most want to talk about today?

LIST OF FIGURES

Figure 1: The global financial crisis dramatically impacted on the Singaporean labor market
Figure 2: Business confidence suffered in 2008 as global economic conditions impacted on the local market
Figure 3: Like most developed economies in the Asia Pacific region, Singapore's stock market declined sharply in 2008
Figure 4: The Singaporean property market boom cooled off in 2008
Figure 5: The majority of HNW wealth in Singapore is invested in the 'cash or near cash' asset category, with this accounting for 30% of all investments
Figure 6: Wealthy Singaporean investors are set to increase their exposure to real estate funds over the next two years
Figure 7: HNW investors in Singapore have a higher risk appetite than the average Asia Pacific HNW investor
Figure 8: HNW clients in Singapore place more importance on having personal relationships with their wealth manager than the average Asia Pacific HNW investor
Figure 9: In Singapore, HNW investors are demanding simple, transparent investments
Figure 10: Over the next two years, the greatest demand amongst HNW investors in Singapore will be for capital protected products with 90% of HNW investors demanding this category of product
Figure 11: Wealth managers in Singapore will be focusing most of their resources on foreign currency investments over the next two years
Figure 12: HNW investors in Singapore will be most influenced by a provider's financial stability when selecting a wealth manager over the next two years
Figure 13: Personal relationships were viewed as the greatest strength of Singaporean wealth managers
Figure 14: The best way for wealth managers in Singapore to increase share of wallet is to offer financial planning
Figure 15: In Singapore the Wealth Management relationship managers speak to clients by phone approximately once a month
Figure 16: The vast majority of relationship managers speak to clients in person once a quarter
Figure 17: The majority of clients in Singapore want to speak to their wealth manager about performance of their overall portfolio
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