Hong Kong to chase Chinese demand, March 24 (Reuters) – Wealth management firms are expanding operations aggressively in Hong Kong to meet pent-up demand from rich Chinese individuals looking to invest more money overseas after three years of COVID-19 curbs, industry sources said.
Affluent and very wealthy families in China are looking to expand their investment options now that travel restrictions have eased and they are seeking alternatives to a slow domestic property market. [Hong Kong to chase Chinese demand]
This week has seen a surge in activity, with mainland Chinese visitors flocking to the first Art Basel fair in Hong Kong since COVID-19 restrictions were lifted.
According to Reuters, Oscar Liu, CEO of Noah International’s wealth management division, commented, “The reopening has resulted in strong growth in our international business. Client inquiries for offshore investment increased by 155% in the first quarter compared to the previous year.”
Noah Holdings, China’s largest independent wealth management firm, is one of five private banks and wealth management firms that Reuters spoke to. They all reported hosting client events in Hong Kong and organizing private art tours.
They are targeting some of China’s 2.1 million “high net wealth” families, each with a net worth exceeding 10 million yuan ($1.46 million), and 138,000 ultra-high net worth families with over 100 million yuan as of January 2022, according to data from the Hurun Research Institute.
Offshore investment inquiries rose by a third in March compared to the previous month, according to Liu. Hong Kong to chase Chinese demand
Noah, based in Shanghai and managing $22 billion in assets, plans to increase its front office staff in Hong Kong from about 20 to 100 relationship managers by 2023, hiring locally and transferring personnel from mainland China.
Hong Kong to chase Chinese demand
Liu stated that overseas business is expected to make up more than 30% of Noah Holding’s total assets under management in 2023, up from the current 20%.
Another Chinese wealth manager, Hywin Holdings, recently hosted workshops, fund manager visits, and even a yacht party in Hong Kong for 30 ultra-high net worth clients.
Nick Xiao, CEO of Hywin International, said that the reopening has not only made it easier for wealthy Chinese investors to access global products, but has also revitalized interest in Hong Kong as a hub for financing, investment, and access to mainland markets.
The company plans to recruit up to 10 private bankers in 2023 and increase staff in supporting roles, Xiao added.
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Vying with Singapore
Dong, an investment banker from Shenzhen, plans to visit Hong Kong soon to open a bank account and buy insurance products.
He believes that holding assets in dollars provides flexibility, allowing him to invest in overseas properties or pay for his children’s education abroad in the future.
To meet the growing demand from mainland investors like Dong, HSBC Bank has launched a trial program to keep three branches in Hong Kong, including wealth management centers, open seven days a week.
The Hong Kong to chase Chinese demand recently organized a summit called Wealth for Good to attract global family offices to the city, hoping to divert them from Singapore, which became more popular with wealthy entrepreneurs during Hong Kong’s strict pandemic restrictions.
The government has also introduced new measures, including tax cuts for family offices and the creation of art storage facilities, to support a thriving ecosystem for global family offices and asset owners.
Chinese financial institutions are competing for this expanding wealth management business in Hong Kong. Chinese Everbright Bank and Hua Xia Bank have recently set up private banking departments in Hong Kong, according to insiders.
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Conclusion
Looking ahead, things are looking good for wealth management in Hong Kong to chase Chinese demand. It’s all because of the city’s strong points and the growing demand from Chinese clients. But, there are some challenges like dealing with rules, keeping up with new technology, and standing out in a crowded market. To keep growing and doing well, wealth managers need to tackle these challenges.
Hong Kong to chase Chinese demand To sum it up, the increase in wealth managers in Hong Kong shows how important the city is becoming globally in finance and how attractive it is to Chinese investors. Understanding why this is happening, the problems wealth managers face, and how they’re dealing with them gives us a better picture of what’s going on in the wealth management industry in Hong Kong.
FAQ’s
1. Why is Hong Kong a big deal for wealth management?
Hong Kong’s in a good spot, has strict rules, and is close to China, making it perfect for managing rich people’s money.
2. What troubles do wealth managers in Hong Kong face?
Dealing with changing rules, lots of competition, and keeping up with what clients want in a fast-moving market are common challenges.
3. How do wealth management firms in Hong Kong help Chinese clients?
They hire more people, use tech, and offer better services to meet Chinese clients’ growing interest in investing outside China.
4. Why does technology matter so much for wealth management in Hong Kong?
Using technology helps save time, money, and gives clients better services, which is super important in Hong Kong’s wealth management scene.
5. How can wealth managers make it big in Hong Kong?
They need a great team, smart tech use, unique services, and following rules to do well in Hong Kong’s tough market.
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