What’s Wrong with the Asian Wealth Management Industry?

Asia Pacific has nearly as many high-net-worth individuals as the United States, the region with the highest number of HNWI in the world, according to the 2014 World Wealth Report. And their numbers are growing fast.

So why have some private banks in the region grumbled about profit?

Paul Smith, CFA, managing director, Asia Pacific global head, institutional partnerships, at CFA Institute, says it’s because private wealth business models in the region are not connecting with the needs of local clients.

Speaking at the recent Wealth Think conference in Singapore, Smith said: “I would argue that the business models in this region are struggling, and one of the reasons for that is the business models that are most current here are European or North American business models that are being imposed upon a client base that is, today, predisposed against those models.” He noted, for example, that many firms talk about running an advisory business model in a market that’s resistant to the idea of paying for investment advice.

Smith has worked in the investment management industry for 30 years, mostly in Asia. Before joining CFA Institute two years ago, he ran his own private wealth management business (Triple A Partners) in Hong Kong.

Watch the video below to hear Smith’s thoughts on how private wealth firms can succeed in Asia Pacific.

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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.