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India`s wealth mgmt industry to grow 15% annually: Survey
New Delhi, April 22, 2008
India`s wealth management industry seems to be
least affected by the global economic slowdown, with about
two-third wealth managers in Asia expecting over 15 per cent
annual growth in revenues from the country, says a survey.
Overall in Asia, the industry is also projected to witness a
revenue growth of more than 15 per cent per annum.
According to a survey conducted by Barclays Capital, wealth
managers expected china to have the highest revenue growth
potential in Asia over the next two years, with 80 per cent of
respondents anticipating more than 15 per cent per annum
growth.
Barclays Capital is the investment banking division of
Barclays Bank PLC.
They were followed by 68 per cent of respondents for Southeast
Asia, where Singapore is the leading wealth management market,
while about 60 per cent wealth managers expected more than 15
per cent per annum revenue growth from India, Hong Kong and
Taiwan.
These countries were closely followed by 55 per cent, who
anticipate the same level of revenue growth from Korea.
The three most important product features over the next two
years are considered to be growth, liquidity and
diversification, in descending order, followed by capital
protection, the survey noted.
"These results reflect the influence of the recent market
turmoil, with clients placing greater importance on
diversifying into liquid assets and protecting their
underlying capital rather than pursuing an aggressive
short-term investment strategy," head of non-Japan Asia
Investor Solutions at Barclays Capital Peter Hu said in a
statement.
"Given less lucrative returns in Asian equity markets
recently, perhaps investors in Asia will become more receptive
to a more consultative solution approach, the true value-add
of the wealth management industry similar to the type of
service currently offered in Europe," he added.
The survey involved 91 respondents from 57 key wealth
management organisations from across non-Japan Asia, including
asset managers, insurance companies, local and global retail
banks and private banks. These wealth managers between them
have over five trillion dollars of assets under management.
"The regions top wealth managers are telling us that the
future remains promising for the wealth industry right across
non-Japan Asia, said head of distribution, Asia Pacific at
Barclays Capital Kevin Burke said.
Barclays Capitals also pointed out that the effect of the
market turmoil is highlighted by changes in wealth managers
recommended asset allocation for a global balanced-risk
investor portfolio, with increased weighting in Asian equity,
commodities, cash and bonds at the expense of US, European and
Japan equity.
Around 60 per cent of wealth managers considered market return
strategies and alternative investments, such as hedge funds,
private equity and real estate, to be very important trends
for their clients.
"The fact that more wealth managers are recommending market
return strategies and alternative investments to their clients
shows that investors are either reverting to less complex but
more direct exposure to the market, or seeking opportunities
to increase their returns," Peter Hu said.
In the Asia region, 80 per cent of wealth managers indicated
that their clients make substantial use of capital protection
and 65 per cent use multi-asset investment strategies.
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