Product Code: VF0017CI
Singapore is one of the world's pre-eminent offshore investment centers, with 81% of the wealth invested in funds sourced from non-residents. However, the onshore market is a major source of assets under management (AUM) in its own right, with 1.0 million affluent individuals despite the city state's small population. As a regional trading hub Singapore's growth rates are closely tied to the health of regional powerhouses such as China, India, and Indonesia; however, even with growth slowing in some of these economies, Singapore's wealth market will continue to post rates that are the envy of the developed world.
- HNW individuals totaled 29,600 in 2015, a tiny proportion of the overall population and well below the levels seen in the US or Switzerland.
- HNW liquid assets are expected to grow by roughly 7.5% a year between 2015 and 2019.
- Bonds will be the fastest-growing asset class, but more due to greater availability than client demand.
- While Singapore attracts significant offshore investment, residents are also keen to invest abroad - 34% of AUM is invested offshore
Verdict Financial's "Wealth in Singapore: Sizing the Market Opportunity" analyzes the Singaporean wealth and retail savings and investments markets, with a focus on the HNW segment. The report is based on our proprietary datasets.
Specifically the report:
- Sizes the affluent market (both by the number of individuals and the value of their liquid assets) using our proprietary datasets.
- Analyzes which asset classes are favored by Singaporean retail investors and how their preferences impact the growth of the total savings and investments market.
- Examines HNW clients' attitudes towards non-liquid investments, such as hedge funds, property and commodities.
- Identifies key drivers and booking centers for offshore investments by Singaporean HNW clients.
Reasons To Buy
- Benchmark your share of the Singaporean wealth market against the current market size.
- Forecast your future growth prospects using our projections for the market to 2019.
- Identify your most promising client segment by analyzing penetration of affluent individuals in Singapore.
- Evaluate your HNW proposition by understanding the investment mix of the local onshore investment market.
- Review your offshore strategy by learning HNW motivations for offshore investments and their preferred booking centers.
Table of Contents
- Singapore's small domestic wealth market is as attractive as its large offshore sector
- Key findings
- Critical success factors
SIZING AND FORECASTING THE SINGAPOREAN WEALTH MARKET
- While primarily a major offshore center, Singapore also has a substantial onshore element
- Offshore investors do not book in Singapore to keep their funds in deposits
- In contrast, managed funds are dominated by offshore AUM
- Favorable domestic conditions will drive further expansion in onshore wealth
- A sizable proportion of Singapore's population will move into the affluent market in the coming years
- The bulk of Singapore's onshore wealth is concentrated in the hands of the affluent
- HNW portfolios above $10m in AUM will experience the highest growth
DRIVERS OF GROWTH IN THE SINGAPOREAN WEALTH MARKET
- Total retail investments growth moderated in 2015 but should bounce back
- Growth in retail savings and investments will rise and steady in the coming years
- Onshore wealth is still largely a deposit game - a stabilizing factor for future savings and investments growth
- Wealth invested directly in the equity and bond markets has risen, but deposits will have an enduring allure
- Deposits have been a drag on wealth growth, and this is set to continue
- Singaporeans tend to favor deposits, with little change forecast
- GDP growth is moderating once again and inflation is negative
- After a brief splurge, bond holdings will grow more slowly in the future
- Equities and mutual funds have been held back by poor market performance
- The STI has struggled to post solid year-on-year returns
- The performance of the stock market has the ability to stampede retail equity investors
- Mutual funds will only slowly regain their share of retail investors' portfolios, as inflows remain steady
HNW INVESTMENT PREFERENCES
- Illiquid investments make up a significant percentage of onshore assets
- Property holds a long-term attraction for HNW individuals
- Private equity and hedge funds are also popular HNW investments
- Offering commodity investments is a good strategy in what remains a regional trading hub
- Offshore investments drain 34% of Singaporean HNW wealth from local institutions
- Onshore banks need to offer offshore services to capture a greater share of HNW portfolios
- A greater range of investment options is the top driver for offshoring wealth
- Global links will help wealth managers capture much of the wealth booked offshore
- Singapore has been more open to DTAs than TIEAs, but this is changing
- Tax rates are low and stable in Singapore, making it an attractive destination for foreign and local wealth
- Abbreviations and acronyms
- Supplementary data
- Liquid assets
- Mutual funds
- Verdict Financial's 2015 Global Wealth Managers Survey
- Verdict Financial's 2014 Global Wealth Managers Survey
- Global Wealth Model methodology
- Global Retail Investments Analytics methodology
- Further reading
- About Verdict Financial
List of Tables
- Table 1: Average monthly income from work per employed household member by deciles , 2000-15
- Table 2: Personal income tax rates and charges, 2012?16
- Table 3: Singapore: adult population segmented by affluent category and asset band (000s), 2010?14
- Table 4: Singapore: adult population segmented by affluent category and asset band (000s), 2015e?19f
- Table 5: Singapore: total liquid wealth segmented by affluent category and asset band ($bn), 2010-14
- Table 6: Singapore: total liquid wealth segmented by affluent category and asset band ($bn), 2015e-19f
- Table 7: Singapore-US dollar exchange rate, December 31, 2014 and December 31, 2015
List of Figures
- Figure 1: Deposits are mainly an onshore market in Singapore
- Figure 2: Funds see the strength of the offshore center shine through
- Figure 3: The number of affluent individuals in Singapore grew well below average in 2015
- Figure 4: 2016 will see a rebound in growth, but years of double digit increases are behind Singapore
- Figure 5: Growth in retail wealth is slowing as economic growth has dipped
- Figure 6: Lower growth will mean deposits creep up as a proportion of retail assets
- Figure 7: All asset classes except bonds will see lower growth going forward
- Figure 8: Singaporeans have returned to the deposit market as a store for their savings
- Figure 9: Singaporean Savings Bonds have rebooted the retail bond market
- Figure 10: Singapore's status as a financial hub can easily be seen in the dominance of financials
- Figure 11: Local stock market performance has not encouraged investors into the market
- Figure 12: Equity investments have become more important to the investment management community
- Figure 13: Local direct property has reduced as a share of the non-traditional portfolio
- Figure 14: Singaporean investors hold a significant proportion of their wealth offshore
- Figure 15: Access to better investment options drives Singaporean HNW investors to offshore wealth
- Figure 16: European wealth centers compete with Asian investment opportunities
- Figure 17: Singapore has aggressively pursued tax agreements with partners around the world
- Figure 18: Stamp duty is payable by both sellers and buyers of fixed property in Singapore