The following content is sourced from external partners. We cannot guarantee that it is suitable for the visually or hearing impaired.
(Bloomberg) -- Singapore and Hong Kong will attract wealth from abroad at more than twice the pace of Switzerland over the next four years as Asia’s economic expansion draws cash from millionaires, Boston Consulting Group predicts.
Perceptions that Singapore is safe and stable will also help to bring money to the Southeast Asian nation, according to BCG, which sees offshore assets there rising at a compound annual average rate of 8 percent through 2021. Hong Kong’s will climb 7 percent, more than Switzerland’s 3 percent, the consulting firm’s global wealth report showed Tuesday.
Switzerland remains the world’s No. 1 offshore wealth management hub with $2.4 trillion in assets, twice as much as Singapore’s, the report showed.
For decades, wealth hubs including Switzerland and Singapore have benefited from political and economic instability elsewhere that prompted rich people to move money abroad in search of investment returns. Asia’s biggest wealth centers are attracting clients from within the region who are becoming richer in tandem with its rising economic output.
“Relative to Switzerland, Hong Kong and Singapore are growing faster because of the economic growth from China to India,” said Mariam Jaafar, a Singapore-based BCG partner and one of the authors of the report. “In clients’ minds, Singapore is more independent and secure. The government is also very supportive of the wealth management industry.”
Still, China’s restrictions on investment outflows may slow some of the movement of assets from the nation, Jaafar said. China ranks above Taiwan, Hong Kong and Indonesia as the largest source of offshore wealth in the Asia-Pacific region, according to BCG. It contributed almost $12 billion in revenue pools for private banks last year, the most in the region, the report showed.
Wealthy people are keeping money abroad even as authorities worldwide clamp down on hidden offshore assets. Governments’ efforts to tighten tax regulation or provide amnesties have yet to prompt the rich to repatriate their undeclared assets in a material way, BCG said. “Because of political instability, offshore solutions remain attractive for wealthy families,” the Boston-based firm said.
Banks from UBS Group AG to Credit Suisse Group AG and DBS Group Holdings Ltd. have been adding wealth management staff to service global clients as assets grow.
Offshore assets in private banking hubs worldwide swelled almost 4 percent last year to $10.3 trillion, according to BCG.
To contact the reporter on this story: Chanyaporn Chanjaroen in Singapore at email@example.com.
To contact the editors responsible for this story: Marcus Wright at firstname.lastname@example.org, Russell Ward
©2017 Bloomberg L.P.