Recent reports have indicated that women in Asia are not only stepping up within the entrepreneurial space – they are also catching up with men when it comes to net wealth. Xiou Ann Lim finds out if this will be a game changer in terms of how private banks in Asia map their strategy
Nearly half of the entrepreneurs in Hong Kong are female and half of them are under 35 years of age, according to HSBC Private Bank’s Essence of Enterprise report. In addition, the average worth of female entrepreneurs in Hong Kong is $3.7m, which surpasses the average worth of their male counterparts at $3.3m.
HSBC Private Bank is not alone in publishing these findings. The Changing Faces of Billionaires – a report that is jointly produced by UBS and PwC – also reveals that the female billionaire population is growing faster than the male billionaire population.
Apart from this, it also discloses that more than half of female billionaires in Asia are self-made and that they have been controlling greater average wealth than men – aside from becoming more influential in family businesses, philanthropic enterprises and governance.
According to Josef Stadler, head of the global ultra-high net worth (UHNW) segment at UBS: "The rise of female and Asian billionaires over the last two decades is creating an entirely new billionaire demographic and I see no signs of it slowing."
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Bernard Rennell – regional head of global private banking in Asia-Pacific and global head of family governance and family enterprise succession at HSBC Private Bank – agrees that females make up a significant proportion of Asia-Pacific’s population of entrepreneurs: "In this region, two in five entrepreneurs are female and nearly half of these are under 35 years of age." He also added that 48% of entrepreneurs in Hong Kong are female. Meanwhile, they make up 36% and 37% of entrepreneurs in Singapore and mainland China respectively – according to Rennell.
Rising to the top
What exactly is spurring this growth in Asia? According to Raymond Ang, regional market manager in charge of the Singapore domestic market at UBS Wealth Management, gender equality is more pervasive and women are being afforded the same level of education as men, which results in equal competencies.
Antony Eldridge, financial services leader at PwC Singapore, agrees: "When given the opportunity to create and lead businesses, we see that females are just as successful – if not more so – than their male counterparts." He is also of the opinion that Asia’s female billionaires – whether first-generation entrepreneurs or successors to founding relatives – "are taking advantage of the significant growth story in emerging economies".
In fact, Ang goes a step further to say that women may even be favoured in Asian families when it comes to managing familial wealth.
"If you observe the Asian family structure and how wealth is handed down to the next generation, the daughter holds the purse strings – whereas the son is tasked with growing the business. There is a division of sorts whereby the family wealth will be managed by the daughter and the company wealth is typically assigned to the son," he says. "But generally, we observe that women are favoured when it comes to financial governance roles," he adds.
The way forward for private banks
Now that they’ve identified a growing demographic within the affluent segment, are private banks in Asia recalibrating their strategy? According to Eric Landolt – who heads family advisory in Asia-Pacific at UBS – the Swiss private bank largely engages its female clients through philanthropy. "In Asia, philanthropy sees a high level of participation from women," he says.
Similarly, HSBC Private Bank observes that women have played critical roles as HNWIs and entrepreneurs in Asia-Pacific for many years. "We continue to support a full spectrum of their wealth-related needs – whether it be growing, managing, preserving or transferring wealth," says Rennell.
He adds that one way they do this is through their Women’s Forum, which is a meeting of influential women who are "involved in managing their family business as well as the ‘business of the family’".
Additionally, Ang adds that UBS Asia has a sizeable team of female private bankers. "There’s a natural affinity, because there are slight differences in expectations between female and male billionaires," he says. Pointing out some of these differences, he explains:
"It takes a longer time to earn the trust of female billionaires. With male billionaires, you can offer the best solution available and win them over with it. With female billionaires, you need more empathy."
The importance of relationships
While it is true that relationships play a pivotal role in entrepreneurship as well as the business of private banking, this is even more so in Asia. HSBC Private Bank’s report makes clear the importance of family and personal networks for entrepreneurs in Hong Kong. According to the report, more than half (53%) of them come from business-owning families and about 43% utilise family wealth when starting their first business. Meanwhile, 22% seek investment from friends or acquaintances.
"In Asia, personal connections can often provide financial support as well as valuable business guidance for entrepreneurs. Next-generation entrepreneurs really understand and recognise the value of building strong business networks, starting as early as at university or during overseas programmes," Rennell says.
Rennell also believes that entrepreneurialism runs deep in Asian countries and often across multiple generations. "Many of today’s young entrepreneurs come from families with their own businesses, where they were encouraged to take an active role in the family business, which provides them with the opportunity to acquire the necessary skills and experience that can position them for success," he adds.
(Source for richest women in Asia: WealthInsight)