Wealth Management in China

by Hua Zhang, May 26, 2009
Industry Trends


Wealth management services from Chinese banks have shown impressive growth in recent years and have great potential. In 2007, the market size for individual wealth management in China was over US$350 billion, doubling since 2000. The market is expected to reach US$700 billion in 2014.

In a new report, Wealth Management in China, Celent examines wealth mangement products and channels. In general, equity shares and real estate are the primary means of investment. Main product trends include an increased demand for guaranteed products, customized features, and increased use of packaged services.

In choosing a particular wealth management institution, the following factors are important to customers: the variety of products, maturity of the firm’s telephone banking / Internet banking services, and the professionalism of its service staff. The main reason customers leave is poor service.

At the end of 2007, there were 415,000 wealthy individuals in China whose assets were beyond US$1 million, up 20.3% from 2006, and 6,038 ultra-high net worth individuals, whose assets were beyond US$30 million. China’s wealthy population has 22.3% of wealth in the Asia-Pacific region, second only to Japan. The wealthy people in China have an aggregate wealth totaling US$2.1 trillion, an increase of 22.5% over 2006.

"Factors that have accelerated the development of wealth management in China include the rapid growth of personal wealth, an aging population, high savings rate, development of the financial markets, the opening of overseas financial markets to China, relaxed policies on mixed operation, and improved laws and regulations for the wealth management industry," says Hua Zhang, analyst with Celent’s Asia Research Group and the author of the report.

"Challenges facing the wealth management industry include undifferentiated products, lack of awareness of global asset allocation, customer privacy protection, customer wealth management and risk management, and the lack of high-caliber wealth management professionals," he adds.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

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