Private banks in Asia are overlooking key
segments while they chase ultra-high-net-worth individuals (UHNWIs)
and are missing out on a potential $25bn each year as a
consequence, according to research from global consultancy Oliver
Wyman.

The ‘core wealth’ segment, those with $1-5m in
investable assets, is under-served in the eight Asian countries
examined, the research said.

There is $11.4trn in unmanaged wealth in the
region with around $3trn of that in the core wealth
segment. 

The segment is under-served partly due to gaps
in the current capabilities of premier banks, in terms of their
staff, their products and their service capabilities, the research
concluded.

Meanwhile private banks, while in possession
of the required products and skills, lack processes and systems
capabilities to handle increased volumes in terms of clients,
transactions or relationship managers, the report said.

Furthermore, the high cost of accessing some
investment products is also disenfranchising those potential
clients whose investments are too small to receive discounted
fees.

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Geographic differences

Focusing too narrowly on the prime
metropolises might also be a mistake.

The research showed that focusing on the main
city in each country provided access to only 30% of the core wealth
segment, while a “Prime+2” strategy, which includes the next two
largest cities, increases access to almost 50% of total ‘core
wealth’ assets.

This is most relevant in China and India where
the market is more dispersed.

 

Women, professionals and the
young

Individuals under 40 years old control almost
35% of ‘core wealth’ assets in emerging Asia, yet the branding,
marketing collateral and messaging of many organisations do not
fully reflect this.

Almost 25% of ‘core wealth’ in emerging Asia
is owned by women. Yet few organisations in the region have
explored the specific needs of female wealth creators.

Professional employees and executives control
35% of ‘core wealth’, substantially more than higher wealth
segments, because professionals’ lower lifetime earnings prevent
them from becoming UHNWs.

Even in Indonesia – the smallest professional
market in emerging Asia – clients aged over 40 hold $8bn in
assets.