ASEAN’s (the regional grouping of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam) combined GDP is forecasted to make it the fourth-largest economy by 2030, behind US, China, and Japan (Source).
From an economic, cultural, demographic, and infrastructure perspective, each Southeast Asian market is distinct. Vast differences characterise the region, from the GDP per capita in Singapore being more than 50 times greater than some of its neighbouring states, to the vast size of Indonesia’s growing middle class, to Thailand’s rapid shift from a low-income nation to having Southeast Asia’s second highest GDP per capita in less than a generation (Source).
As wonderfully complex and diverse as the region is, wealth managers must address the similar needs that bind them to operate successfully across each market. That is, to identify and tackle three key trends of wealth management in Southeast Asia.
Intergenerational Transfer of Wealth in Southeast Asia
In a report published by Butterfield, more than 80% of surveyed Relationship Managers saw increased requests for succession planning over the last five years, the highest ever reported. Although Asian family offices are relatively young, with most of them in their first or second generations, it’s clear that succession planning, wealth preservation and transfer remain an important focus for them. It’s found that 70% of families reportedly failed to prepare for intergenerational transfer of wealth but are keen to do so and 75% of wealth owners want to create positive impact through their investments (Source).
The region is expected to overtake Europe as home to the world’s second-largest population of UHNWI and is also experiencing rapid growth of its mass-affluent population (Source). Financial institutions in Asia must be well-prepared to receive and manage the great amount of wealth that will be passed on to the next generation of clients. This is crucial, while simultaneously ensuring they provide a high-touch, personalised service to the right customer segment at the right price point.
Preparing to Service Asia’s Next Generation
The younger generation in Asian wealthy families are often Western-educated, digital natives, and open-minded about adopting structured approaches to preserving and transferring family wealth. Any wealth advisor will testify there is a concern about how to best appeal to young investors.
Wealth managers must get to know their clients better, profiling them beyond simple demographics and asset value. Millennial investors are research-savvy and seek the ease and flexibility of digital investing, supplemented with a range of choices at their fingertips. They place emphasis on social and technological innovation. As a result, Asia’s wealth management providers must offer products, solutions, and services that cater to the needs, preference, and expectations of this younger clientele if they want to stay ahead in business.
Rapid Rise of WealthTech in Southeast Asia
KPMG reports that WealthTech players in the region are rapidly developing advanced wealth management platforms and intuitive advisory solutions. To tap into the rising mass-affluent population, they are partnering big banks and using their low-cost structure to achieve scale through automation. With increasing competition between financial institutions for a share in the Asian wealth management market, financial institutions are quickly enhancing their digital offerings by partnering with FinTechs to provide advanced solutions and strengthen the capabilities of their advisors.
The region’s digital advisory space has been growing steadily, gaining users and assets due to lockdown restrictions during the pandemic. Rising living costs, an ageing population, and the pervasive infiltration of technology into everyday life means digitalisation in the wealth management space shows no sign of slowing down.
Quantifeed Spearheads Hybrid Wealth Management for Southeast Asia’s HNW Clients
Quantifeed has the technology to empower advisors with digital tools that curate and collect relevant investment content, help with task prioritisation, and support delightful engagements with their clients. Trusted by major financial institutions in the region, we understand the subtleties, regulations, and investment frameworks that enable our clients to transform and scale their wealth management business
We work with major financial institutions in Southeast Asia, namely Kiatnakin Phatra in Thailand and DBS in Singapore, providing them with innovative digital wealth management solutions that help their advisors provide higher levels of service and reach more customers. Our technology and expertise help these financial institutions to develop a strong business proposition that targets their customer segment.
If you would like to have a discussion with us about your digital wealth management needs, don’t hesitate to get in touch. Read about QDiscovery, our design-led consultancy service to see how we can work with you to create a unique, fast-to-deploy business proposition, step by step.
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