Asian cities attract more overseas money than Switzerland
Jeremy Grant in Singapore
Clampdowns on bank secrecy in Europe and a proliferation of billionaires in Asia helped Hong Kong and Singapore attract more overseas money over the past two years than rivals such as Switzerland, according to a report by Deloitte.
The consultancy’s annual ranking of wealth centres highlights how the Asian cities are seen by the world’s rich as the best places to park money amid global tighter regulation of private wealth managers in Switzerland and elsewhere.
Many of those wealthy people are from China, which helped propel the amount of money flowing into Hong Kong to rise 47 per cent to $640bn during 2012-2014. Singapore saw a 32 per cent increase in the value of funds entering the state to $470bn, according to the report.
Over the same period, Switzerland managed only a 2 per cent rise in the money it attracted from overseas, to $2tn. But it remains the largest wealth management centre — measured by assets coming from abroad — followed by the UK, the US, and Panama and the Caribbean.
Deloitte did not rank centres by assets under management, which would include domestic wealth. But its ranking of locations by funds flowing from outside indicates where the wealthy perceive as being the best destination for their money.
The consultancy said its findings suggested that European centres such as Switzerland “suffered from the combined effect” of the eurozone crisis and regulations such as Fatca — the US Foreign Account Tax Compliance Act which is intended to detect and deter tax evasion by US citizens via overseas accounts.
Singapore is growing fast as a money management centre because of a rising number of wealthy entrepreneurs in Southeast Asia, especially Indonesia. Its three local banks are providing stiff competition for longer-established groups such as JPMorgan, Citi and Swiss banks Credit Suisse and UBS.
DBS, Singapore’s biggest bank by assets, last year bought the Singapore and Hong Kong private banking business of Société Générale for $200m cash, in an illustration of its push into wealth management.
“Local wealth management centres such as Hong Kong and Singapore . . . are geographically closer to clients in the region and seem to be more successful in competing to exploit the market potential,” Deloitte said.
aThe consultancy added that international money managers in Switzerland “face the challenge of restoring strong growth in their business and profitability by improving operational performance and attracting new client assets”.
Singapore has for some years been projected to overtake Switzerland as the world’s largest wealth management centre. But Deloitte’s findings suggest that Hong Kong may have a better chance of taking the top slot.
Mohit Mehrotra, global wealth management group leader at Deloitte, said Hong Kong overtook Singapore in 2012 in terms of attracting offshore wealth. “The trajectory of growth in Singapore from 2008 to 2014 has been fairly positive, but it’s just that growth in Hong Kong has accelerated a lot faster,” said Mr Mehrotra.
