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The rapid expansion of ultra-high-net-worth individuals (UHNWIs) in Asia is set to redefine the global wealth landscape.
With an expected 35 new UHNWIs emerging daily, the region is poised to see its total number of ultra-wealthy individuals grow to approximately 230,000 by 2027—nearly 40% larger than in 2023.
This dramatic increase will position Asia as the second-largest concentration of UHNWIs, trailing only North America. However, at the current rate of growth, it may not be long before Asia takes the top spot.
Competition heats up between Hong Kong and Singapore
As Asia’s wealth expands, so does the competition to attract these newly minted UHNWIs. Hong Kong and Singapore are leading the charge, each leveraging its unique strengths to become the premier wealth management hub in the region.
Singapore has capitalized on tax incentives and a business-friendly regulatory environment to attract over 1,100 family offices, managing more than $4 trillion—up from about 100 just a decade ago, according to a report by Knight Frank.
Hong Kong, traditionally the dominant player in Asia’s wealth management sector, is also vying to retain its status.
The city’s wealth management industry saw the fastest growth in assets under management in the five years leading up to 2022.
However, recent shifts in geopolitical and economic landscapes have prompted some wealthy individuals to move their assets to Singapore.
In response, Hong Kong authorities have introduced new incentives aimed at family offices and residency options for individuals investing at least HK$30 million into the city.
Singapore’s rise as a wealth hub
Singapore’s rapid growth as a wealth management hub can be attributed to its strategic initiatives to attract family offices. While the city-state has successfully increased the number of family offices, the direct impact on local investment remains unclear.
Last summer, the Monetary Authority of Singapore (MAS) adjusted its incentives to encourage family offices to invest in the country’s equity markets and climate-related projects.
However, the influx of family offices has had minimal impact on the residential property market, indicating that these private institutions have yet to establish deep roots in the local economy.
Despite these challenges, the wealth management industry in Singapore is expected to grow significantly.
Financial wealth booked in Singapore is projected to increase at a rate of 9% through 2027, positioning the city-state as one of the top three wealth management hubs globally, alongside Hong Kong and Switzerland.
Hong Kong’s response and future prospects
Hong Kong’s wealth management sector is not sitting idly by. The city’s family office community, currently numbering around 400, is set to expand with targets for an additional 200 family offices by 2025.
In October 2022, Hong Kong introduced a policy to encourage wealthy individuals to invest at least HK$30 million in local stocks or assets as part of the Capital Investment Entrant Scheme, which is expected to play a central role in bolstering the city’s wealth management industry.
Experts remain optimistic about Hong Kong’s prospects. The city’s success as a wealth hub is closely tied to the expansion of the Chinese economy and its ability to attract wealthy individuals from the mainland.
While China’s economic growth is expected to slow to 4.5% by 2025, down from 8.4% in 2020, these growth rates are still likely to support Hong Kong’s ambition to become the world’s leading wealth management hub by 2027, potentially overtaking Switzerland.
A balanced competition between Hong Kong and Singapore
The competition between Hong Kong and Singapore for Asia’s ultra-wealthy is not necessarily a zero-sum game.
The rapid regional wealth creation strengthens both cities. Singapore is attracting emerging wealth from countries like Indonesia, Thailand, Malaysia, and Vietnam, while Hong Kong remains the dominant hub for wealth generated in mainland China.
The key challenge for both cities lies in their ability to implement regulatory structures that encourage genuine investment in their local economies.
While both Hong Kong and Singapore have successfully attracted family offices, the true measure of their success will be whether these offices contribute to sustainable economic growth through substantial local investments.
The future of wealth management in Asia
As Asia’s wealth management landscape continues to evolve, both Hong Kong and Singapore face the challenge of maintaining their competitive edge.
The focus will be on how each city can foster an environment that not only attracts ultra-wealthy individuals but also encourages them to invest in the local economy.
For Singapore, this may involve further refining its incentives to ensure that family offices contribute to long-term economic growth. Hong Kong, on the other hand, will need to leverage its close ties with mainland China to continue attracting wealth from the region’s largest economy.
Ultimately, the success of both cities will hinge on their ability to balance the needs of UHNWIs with the broader economic goals of their respective governments.
As Asia’s wealth continues to grow, the competition between Hong Kong and Singapore will likely intensify, with both cities striving to become the region’s leading wealth management hub.
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