Men continue to dominate Singapore’s HNW population, accounting for 84.2% of the affluent population.
However, the proportion of females will rise as more women advance to high-level positions in major corporations and pursue entrepreneurial endeavours.
This is according to GlobalData’s report on Singaporean high net worth individuals, their investing choices, and portfolio allocations. The report also provides demographic information on high-net-worth investors.
Female HNW entrepreneurs offer a potentially profitable market in Singapore
According to 2021 research commissioned by Singapore-based life insurance carrier Prudential Singapore (which polled 250 HNW women in Singapore aged 35 and above), 44% feel unsure about their financial future.
The main sources of their financial unease are a lack of information about wealth management and a fear that their investments may fail. Delivering specialised programmes for female clients to assist them in meeting their financial goals is critical to capturing a big proportion of this expanding and vital market.
The percentage of high-net-worth females remained low in 2022, but it was continuously higher than the Asia Pacific average.
According to the Council for Board Diversity, female involvement on the boards of directors of the top 100 Singapore-listed businesses has increased from 17.6% in December 2020 to 20.8% in June 2022.
The board intends to achieve 25% by 2025 and 30% by 2030.
The Singapore Business Federation has established the Singapore Women Entrepreneurs Network (SG WEN) to encourage and support female entrepreneurship through education, networking, and collaboration with other women-focused organisations.
SG WEN collaborated with HSBC in December 2022 to enable female entrepreneurs with access to the bank’s Female Entrepreneur Programme, which includes capital, training, and support.
Most rich Singaporeans classified as High Net Worth (HNW) are either retired or nearing retirement age. Men and women both have a low proportion of HNWs under the age of 50.
As a result, there are specialised investing options accessible for HNWs to plan for their wealth and succession. One example is AIA’s Wealth Being, which is a US-dollar investment plan that offers both wealth management and succession planning.
Earned income is the most common source of creating wealth
The majority of Singapore's rich individuals got their fortune through entrepreneurship or earning income, accounting for 93% of the market.
Singapore's economy is highly developed, and it is home to big enterprises and technology firms, with many international corporations having regional headquarters and business operations in the city-state.
As seen by the growing number of registered companies in Singapore, entrepreneurship is becoming a popular way of producing income. In Singapore, there are over 405,000 registered companies as of November 2022, which is a 4.3% increase from the previous year.
Entrepreneurs are a profitable target market for wealth managers who can suit their specialised needs. However, competition has stepped up as more private banks offer specialised services to entrepreneurs.
In order to stimulate the creation of new enterprises and corporate ventures in Singapore, the Singapore Economic Development Board has introduced a pilot programme called Corporate Venture Launchpad to assist large and established corporations in expanding into new business areas.
In July 2022, a new version, Corporate Venture Launchpad 2.0, was released to assist firms in developing new initiatives in sustainability, fintech, senior living, and the metaverse over the next two years.
Due to the ageing of Singapore's wealthy population, the market for inheritors is currently small but is anticipated to grow over the next ten years. This market may be advantageous for wealth managers who provide niche products.
Inheritors are often less knowledgeable about finances, so they may be interested in financial education and discretionary asset management services.
Almost a quarter of HNW wealth in Singapore is held in the financial services and healthcare industries combined
Following the pandemic-induced slowdown, Singapore's economy grew by 7.6% in 2021.
According to the Ministry of Trade and Industry, the growth rate would decrease to 3.8% in 2022 due to a decline in exports and manufacturing.
The financial services business contributes significantly to the wealth of high-net-worth individuals, and it is still increasing even after recovering from the pandemic.
Economic uncertainty, tighter financial conditions, and inflation, on the other hand, could hinder future growth. Based on the Singapore Monetary Authority's Financial Services Industry Transformation Map, the financial sector would grow at a 4-5% annual rate between 2021 and 2025.
The healthcare industry is a significant source of wealth for those with significant assets.
The iEdge SG All Healthcare Index, which gauges the success of Singapore's healthcare industry, fell 18% in 2022 due to a drop in biomedical manufacturing. The medical technology segment, on the other hand, grew as a result of increased export demand for medical gadgets.
The government intends to expand healthcare spending to 3.5% of GDP by 2030, resulting in additional growth in the sector.
The building and engineering industries account for 84% of Singapore's high net worth individuals' wealth.
It grew by 6.5% in 2022 as a result of the recovery of both governmental and private sector construction following the epidemic. Because of strong demand for public housing, industrial and institutional building development, mass rapid transit line construction, and other infrastructure projects, the industry will continue to prosper.