Why the Future of Wealth Management in Asia is Greener, More Mobile and Engaging

Young investors with new needs, a penchant for technology and a desire to make a positive impact with their money are reshaping wealth management around the world.

This new generation of investors presents wealth managers with a fantastic opportunity to deepen client relationships by creating personalized experiences designed to meet their evolving needs. Underpinned by technology, new solutions empower these investors to manage their wealth when and where it suits them best and in line with their values.

“The future of wealth management is all about mobile convenience, deep engagement, and the incorporation of environmental and social purpose into investment decisions,” says Annabel Spring, Chief Executive, Global Private Banking and Wealth at HSBC. “Investor sophistication is also increasing – and that’s especially true of our clients in Asia, where we see a real need for local expertise, global access and bespoke wealth solutions.”

The Asia Opportunity

Indeed, Asia provides the most compelling backdrop for this new chapter, with the number of millionaires and billionaires across the region set to grow 37% and 46%, respectively, by 2025.^[1] And over a third of Asia’s wealth will pass down to younger generations by 2030,^[2] accelerating the shift in investor mindset.

“The Asia wealth opportunity is one of the most compelling in finance right now,” says Spring. “As a region to invest in, demand for access to Asia’s dynamic and fast-growing markets is truly global.”

It is also an opportunity that encompasses a large cross section of society, where vibrant entrepreneurialism means the line between personal wealth and business needs is often blurred and where every stage of the wealth journey is represented.

“I was listening to one of our bankers talk to a client recently, and what stood out was the importance of being able to bring to the table unique opportunities and a nuanced understanding of the risks,” Spring adds. “That kind of insight only comes with having the breadth and depth that HSBC has in Asia.”

Diversified Investments

Accordingly, investors in Asia are embracing a wider range of asset classes to construct portfolios that are capable of meeting their objectives, which increasingly factor in environmental and societal impact.

For instance, environmental, social and governance (ESG) considerations – from fighting climate change to tackling poverty – are key for a growing number of investors. Younger generations show an especially keen interest, with 40% of Generation Z students polled across Asia tipping ‘companies with a purpose’ as the main driver of their investment decisions.^[3]

“Increasingly, the world is investing in sustainable assets and, more broadly, ESG assets including societal concern assets, so we expect to see opportunities proliferate in this space,” says Spring.

A growing appetite for private markets among investors underscores another shift in Asia’s wealth management space. This is partly due to waning confidence in the 60/40 portfolio – a mix of 60% stocks and 40% bonds – delivering what it once did, as well as rising demand for new sources of yield and the need to build protection into portfolios.

“Over the next five years, we'll see broader access to private equity, hedge funds, private credit and, indeed, the wider alternatives universe,” Spring adds. “By leveraging technology and our global network, we’ll be able to bring an even deeper range of alternative investments to a wider range of clients.”

Digital Transformation

While the pandemic forced many investors online to address their needs in the absence of face-to-face advisor meetings, 64% of wealth clients in Asia plan to make even greater use of digital tools in the future.^[4] And one in two clients globally plans to engage more with an advisor virtually moving forward.^[5]

Younger investors – especially millennials and members of Gen Z – rely on digital platforms in virtually every area of their lives, and they expect to be able to access financial advice through multiple channels as part of a richer digital experience.

This is not an existential threat to wealth managers. It’s a chance to leverage new technologies to make the client experience seamless and to add impact to their roles.

Emerging technology trends in wealth management include advanced analytics, blockchain, AI and machine learning, with the next generation of tools becoming more predictive and personalized. Yet digitalization alone will not determine the future of the wealth management sector.

“Don't believe anyone who tells you that the future of wealth management is entirely digital,” says Spring. “Some clients want fully digital – they want simple, easy, online, and mobile – and completely customizable to their preferences and requirements. Some clients just want to sit across the table from you and tell you their personal story. And some clients want a mix of both.”

This fusion of digital tools and human expertise into a hybrid client engagement model sets the tone for the future of wealth management. Personal service will become an even more bespoke experience, with technology and analytics enabling goal and risk optimization, and wealth managers better placed to provide more impactful advice.

If you are interested to learn more about wealth opportunity in Asia, please click here.

If you are interested to learn more about ESG and sustainable investing, please find details on services in your location: China, Hong Kong, India, Singapore, Malaysia, Taiwan.

[1] Knight Frank [2] Scorpio Wealth Management [3] Bloomberg [4] EY [5] EY