Over the past month, lenders have reported huge increases in fee-based banking, with the sector contributing solid profits to overall earnings last year.

'Most market participants have had an active growth agenda in the past two years, putting pressure on the already tight market for talent,' JPMorgan Private Bank chief executive Michael Fung says.

'Most players tend to target a larger audience and have much lower account opening thresholds, while at JPMorgan Private Bank we stick to serving the ultra-high net-worth [client] and serve only those who have at least US$10 million in liquid assets.'

Wealth management has transformed into a competitive market in Hong Kong. The number of high net-worth clients continues to climb and, as they seek safe avenues to park their money, they are becoming more sophisticated in their demands.

'More sophisticated and higher net worth clients are demanding a holistic, integrated platform and advisory service. They also want to work only with brands that are reliable and which they can trust. [It is a] very competitive market,' Mr Fung says.

'Hence, [there is] greater client involvement and more frequent contact with financial advisers.'

High net-worth Asian clients, particularly from Hong Kong, are also demanding more frequent contact with financial advisers and are less likely to leave investment decisions in fund managers' hands.

This is in contrast to their European or American counterparts, who are more likely to leave asset allocation decisions to the discretion of their fund managers.

However, Mr Fung says it is hard to generalise when it comes to the investment preferences of affluent clients around the world.

'Traditionally, Asian clients are more involved in their investment decisions.

'However, we also have considerable numbers of clients who have discretionary portfolios with us.

'They leave it to us to come up with asset allocation strategy for them based on their objectives,' he says. 'Either way, we work very closely with our clients to keep them abreast of their portfolios.'

The economic slowdown, coupled with record low interest rates in Hong Kong and the downturn in the property market, has forced fund managers to diversify their products as investors seek a variety of ways to increase their wealth.

These may span insurance to structured products, such as guaranteed funds and bonds.

According to a PricewaterhouseCoopers survey last year, the wealth management industry in the Asia-Pacific region will grow an average 10 per cent over the next year or two.

Much of this is expected to be driven by key markets such as the mainland and Taiwan. As the mainland gears up to liberalise its banking sector to foreign lenders in line with requirements under its World Trade Organisation accession, wealth managers are eyeing the huge China market.

However, despite the importance and potential of the mainland's wealth management market, Mr Fung says concerns remain over China's regulatory maturity.

'Other challenges that need to be overcome [include] source of wealth and know-your-client issues. Banking reforms will definitely be helpful, but it is too early to pin down specifics without knowing what the reform will be like and the time frame.'

As to trends, Hong Kong's high net-worth individuals are increasingly seeking diversified portfolios beyond traditional instruments to protect their wealth.

This is showing up in investor appetite for absolute returns and protection against downside risk products, according to Mr Fung.

'[There is an] increasing appetite among wealthy families for manager of manager services. Clients want to have access to the best-of-breed managers and access to external managers to complement the institution's proprietary offering.'