Wealth Management in China
Executive Summary
China’s rapid economic growth has created many multi-millionaires, especially in the major cities and coastal regions. The wealth management business is an emerging business in China yet growing significantly fast.
According to the Chinese Wealth Management Market Report by Boston Consulting Group(BCG), China is the largest wealth management market in Asia (exluding Japan), the total household financial wealth has reached $2.5 trillion. From 2001 to 2006, China had the highest compound annual growth rates (CAGRs) in asset under management (AuM), at 23.4 percent, while the global average stayed at 8.6 percent. In 2006 only, total AuM in China increased by 31.6 percent. BCG predicted that in the next years, the household financial wealth in China would keep increasing by around 17.4 percent annually and by 2011 the total asset under management would reach $5.5 trillion. (Shanghai Securities Daily, 2007-10-31)
The fast growing wealth management market in China is primarily driven by the soaring number of HNWIs (high net worth individuals), the fast development of the economy, the opening-up of its financial market, and the changes of its regulatory framework.
However, due to the history of the Chinese economic development and the specialty of the country, the wealth management is mainly provided to mass affluent people. The true private banking business under western criteria can hardly be found in this market.
What is wealth management in China?
There is no commonly agreed definition in the industry globally. According to UBS, a global leader in wealth management with history of 140 years in the industry, wealth management services are designed for high-net-worth and affluent i ...