Market Research
China To Be World's Second Biggest Wealth Market By 2015 - Study
China will drive Asia to become the second-largest wealth market after North America by the year 2015, with the region's private banking assets (excluding Japan) touted to grow to $11 trillion, a recent study shows.
In a report jointly developed by China Minsheng Bank and McKinsey & Company on private banking in China in 2012, it was predicted that 50 per cent of the wealth market growth expected from Asia will come from China. The study estimates that the pool of high net worth individuals will expand at a compound annual growth rate of 20 per cent over the next three years to reach two million people by 2015.
China's evolving preferences
The increase was attributed mostly to the Chinese wealth segment's evolving appetites. For one, China's HNW individuals cite wealth accumulation and preservation as their primary wealth management objectives, with asset portfolios dominated by real estate, 31 per cent, and basic financial products, 26 per cent.
Sixty-two per cent of them want to increase the share of new products in their portfolios, such as private equity investment and trust products. A good 57 per cent are interested in increasing their wealth via overseas investments.
Key buying factors include financial product selection, investment advisory, convenience, value-added services and financial product pricing, with product selection getting 44 per cent of votes as the main factor, followed by investment advisory, 23 per cent.
Who are the HNW individuals?
The report classifies China's rich into six segments. Around 50 per cent are so-called "traditional wealth preservers" and "amateur investors" seeing product selection as the main factor for purchases. Thirty per cent are "professional investors" and "savvy business owners" who look into investment advisory first. The remaining 20 per cent are called "gold collar elites" and "business first investors" who value channels and convenience when picking a private banking provider.
The Minsheng Bank and McKinsey private banking 2012 report was based 600 quantitative questionnaires and 100 face-to-face customer interviews conducted over a period of five months in 29 Chinese cities.
