Sustainable Wealth Generation in an Unpredictable World
Against the backdrop of low interest rates, higher inflation and market jitters stemming from Covid-19, Singapore’s wealthy are finding it increasingly difficult to generate the returns they need to build their financial legacy.
While Singapore’s High-Net-Worth Individuals (HNWIs) are focused on wealth creation and preservation, many feel they lack of financial knowledge to manage their wealth.
To navigate the whims of unpredictable financial markets, many HNWIs are turning to wealth managers for guidance. More than half seek managers with a proven ability provide solid returns, especially amid market routs.1 In turn, assets under management (AUM) at Asia’s wealth management firms are on course to grow 11.6% annually through 2025 as they use their expertise to help clients unlock new sources of value.2 Citibank Singapore plans to triple AUM while increasing its wealth clients 2.5 times by 2025.“We recently opened our largest wealth hub dedicated to Citigold and Citigold Private Client customers in Singapore, further enhancing our capacity to serve our wealth clients,” said Ashmita Acharya, Citibank Singapore’s Head of Retail Banking.
“Many clients today are also sophisticated investors and our global network can offer them highly tailored and best-in-class advisory,” she added. “With markets remaining volatile amid a rapid but uneven pandemic recovery and short-term Covid-19 distortions, it is even more crucial to have a trusted partner to help protect and grow your wealth.”
Insights for Intelligent InvestingThe composition of Asia’s wealth mix is changing. Financial asset growth is on course to outpace real asset growth among HNWIs over the next five years.3 Therein lie challenges and opportunities.
With so many options to choose from, determining which investments promise the greatest returns is challenging. Add to that the proliferation of real-time data including internet searches, social media posts, satellite imagery, mobile app analytics and other alternative data, finding the signal in the noise becomes even more daunting.
To overcome this challenge, Citi is helping their Citigold Private Clients plan and monitor their portfolio with their advisory tools and expertise. The bank leverages Portfolio 360, which assesses the total risk-return profile of the client’s multi-asset portfolio through various market scenario analysis. This provides clients with constructive advice on building the most effective investment strategy for their long-term investment and wealth objectives
“Timely market knowledge is also crucial to seizing wealth opportunities as they arise. At Citi, we gather the latest market and industry movements from our over 400 global research analysts to ensure you are making informed choices on your wealth,” adds Ms Acharya.
For instance, according to the Mid-Year Outlook 2021 from Citi analysts4, certain sectors and national markets still offer “mean reversion” opportunities as the global economy charts the course to recovery. However, the range and scope of opportunities is narrowing. Citi’s wealth managers have started to position their allocation for mid-cycle conditions with a preference for assets that offer untapped recovery potential and long-term growth.5
The bank brings the same relentless focus and dedication to opportunities in private markets. Currently, 37% of HNWIs in Asia invest in alternative investments.6 That’s tipped to increase to 61% over the next five years. With products across private equity, private real estate and hedge funds as well as global wealth insights, Citi enables HNWIs to diversify their portfolios through alternatives that offer returns that are uncorrelated with public markets.
Building Trust Through Transparency
In addition to sustainable returns, HNWIs seek value for money. Today, they are increasingly aware of the trading and product fees associated with wealth management service. In fact, after quality of service, fees and pricing structure is the second-most-important factor that HNWIs consider when choosing a wealth management services provider.9
In Asia, where regulation has not yet done enough to improve fee transparency, half of HNWIs remain concerned about hidden costs when working with their wealth manager.10 Transparency on pricing and reducing product complexity are vital for building trust. Here, Citi has made a huge commitment to clarity and transparency as it builds out digital-led wealth management solution that complement its superior personal touch.
The bank recently rolled out the Wrap Program—a one-fee structure that benefits clients who transact frequently. This empowers clients to make agile decisions with no additional transactional fees payable to Citi regardless of the type of investment or number of transactions. Citi designed the program to help clients optimize their wealth. To learn more, visit the Wrap Program, exclusive to Citigold Private Clients.
1, Broadridge, 2, BCG, 3, BCG,
4, Citi analysts refer to investment professionals within Citi Research, Citi Global Markets Inc., Citi Private Bank and voting members of the Citi Global Investment Committee. Citibank N.A. and its affiliates / subsidiaries provide no independent research or analysis in the substance or preparation of this document.
5, Citi, 6, EY, 7, Broadridge, 8, EY
