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March 17, 2022updated 11 Apr 2022 9:21am

Hong Kong expands wealth management connect to brokerages

Hong Kong regulators have granted an in-principle nod to expand Wealth Management Connect to the brokerages in the city, reported Bloomberg citing people aware of the development.

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GlobalData’s ‘Asia-Pacific Wealth Management: Market Sizing and Opportunities to 2026’ report provides a comprehensive overview of the Asia-Pacific (APAC) wealth management market.
  • The report analyzes the APAC wealth and retail savings and investments markets. This includes affluent market size, both by number of individuals and the value of their liquid assets.
  • The affluent population grew by 5.3% in 2021 and is expected to grow at an AAGR of 4.8% between 2022 and 2026.
  • The value of liquid assets held by the affluent segment surged by 8.4% in 2021, backed by economic recovery. HNW individuals’ financial wealth grew by 12%, while mass affluent individuals’ wealth grew by 6.0%.
  • The report provides an analysis of factors driving liquid asset growth. It is also split into asset classes - equities, mutual funds, deposits, and bonds.
  • The affluent population are more risk-tolerant and invest a significant proportion of their investments in risky assets such as equities, compared to emerging affluent and mass market individuals.
The report also provides data and insights on the size of offshore holding of HNW investors in the APAC region.
by GlobalData
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The move is subject to applications and other requirements. It will also require approval by mainland Chinese regulators.

Opening up of the scheme to brokerages will further increase the competition for participating banks for an estimated $500m in annual fees.

A spokesperson for Securities and Futures Commission (SFC) declined to comment when approached by the news agency.

Launched last year, Wealth Connect facilitates cross-border investments in the Greater Bay Area, consisting of Hong Kong, and southern mainland cities including Shenzhen and Guangzhou.

The scheme, which garnered participation from around 13,000 individual investors in the first month, currently has a line-up of 23 approved Hong Kong banks, including HSBC and Citigroup.

Hong Kong Investment Fund Association (HKIFA) welcomed SFC’s move to expand the scheme to brokerages but said that improvements should also be looked at, according to the report.

HKIFA chief executive Sally Wong told the news agency that the programme needs to bolster the scope of products that lenders can offer.

At present, the banks are only allowed to offer low-to-medium risk products. 

Wong also said that the ‘execution-only’ model that prevents lenders from offering advise also needs to be changed.

Under the current rules, certain Hong Kong lenders are approved to deal in securities and take part in retail banking or private banking business.

According to the SFC registry, there are 1,487 corporations, including brokers and asset managers, with the same license as of December 2021.

In July last year, a report by SCMP said that French asset manager Amundi was looking to take advantage of wealth management connect scheme.

Free Report
img

Analyze opportunies within the wealth management market in APAC

GlobalData’s ‘Asia-Pacific Wealth Management: Market Sizing and Opportunities to 2026’ report provides a comprehensive overview of the Asia-Pacific (APAC) wealth management market.
  • The report analyzes the APAC wealth and retail savings and investments markets. This includes affluent market size, both by number of individuals and the value of their liquid assets.
  • The affluent population grew by 5.3% in 2021 and is expected to grow at an AAGR of 4.8% between 2022 and 2026.
  • The value of liquid assets held by the affluent segment surged by 8.4% in 2021, backed by economic recovery. HNW individuals’ financial wealth grew by 12%, while mass affluent individuals’ wealth grew by 6.0%.
  • The report provides an analysis of factors driving liquid asset growth. It is also split into asset classes - equities, mutual funds, deposits, and bonds.
  • The affluent population are more risk-tolerant and invest a significant proportion of their investments in risky assets such as equities, compared to emerging affluent and mass market individuals.
The report also provides data and insights on the size of offshore holding of HNW investors in the APAC region.
by GlobalData
Enter your details here to receive your free Report.

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