South China Morning Post
Advertisement
Advertisement
Greater Bay Area
Get more with myNEWS
A personalised news feed of stories that matter to you
Learn more
The Greater Bay Area remains a key focus point for the Hong Kong private wealth management industry. Photo: AP Photo
BusinessInvestor Relations

Chinese investment to account for over half of assets under management in five years, survey by Hong Kong industry body finds

  • Mainland investment could account for 51 per cent of assets managed by Hong Kong private wealth firms in five years: Private Wealth Management Association
  • Working with regulators to increase personal quotas to US$1 million, widen the product scope, says chairman of industry body
Greater Bay Area
Martin Choi
Martin Choi
Why you can trust SCMP
Investment from mainland China could account for more than half of assets under management in Hong Kong’s private wealth management industry in five years thanks to the newly launched Wealth Management Connect scheme, according to a local industry body.

A survey conducted by the Private Wealth Management Association (PWMA) found that its member institutions expected the increase in investment from the mainland to touch 51 per cent in five years, which it said emphasised the “growing significance of mainland China to Hong Kong’s private wealth management industry”.

About 41 per cent of assets managed by Hong Kong’ private wealth management firms currently come from mainland China. Last year, this number stood at 40 per cent.

“Mainland China has continued to be a key priority for our members, particularly with the launch of the Wealth Management Connect scheme. We look forward to engaging with relevant authorities on how to expand the scope of the pilot scheme in the future,” said Amy Lo, chairman of the PWMA’s executive committee.

The Wealth Management Connect scheme was formally kicked off last month between Hong Kong, Macau and the nine provincial cities in Guangdong that collectively constitute the Greater Bay Area development zone. The programme lets mainland Chinese investors domiciled in the area invest in approved wealth management products in Hong Kong and Macau, and allows foreign investors to tap financial products sold in China through the two special administrative regions.
An initial quota of 300 billion yuan (US$46.47 billion) – with half the amount being traded in each direction – was set by the Hong Kong Monetary Authority in October last year. About 300 investment funds in Hong Kong have qualified to offer financial products in the Greater Bay Area zone, where investors are entitled to invest up to 1 million yuan each.
The survey’s findings were presented on Monday in the sixth annual Hong Kong Private Wealth Management Report 2021, which was co-authored by the association and accounting firm KPMG. The PWMA’s 42 members include local and mainland Chinese lenders such as HSBC and ICBC, as well as international investment banks such as UBS.

The report is based on an online survey of member institutions, as well as a client survey of industry executives, regulators and other stakeholders in Hong Kong, conducted between June and July 2021.

While the newly launched connect scheme was a good start, more changes needed to be made to make it more relevant for the industry, said Lo.

“As time goes by, the Wealth Management Connect scheme will be one of the key growth drivers … if there is an overall increase in the quota itself, the quota for individuals and also the widening of product scope,” she said. “We are in very close dialogue with the regulators both in Hong Kong and mainland China to lobby … to increase the personal quota to HK$8 million [US$1.03 million], and also to widen the product scope.”

The Greater Bay Area remains a key focus point for the Hong Kong private wealth management industry as part of its overall China and growth strategies. About 71 per cent of the association’s member institutions saw the development zone as being important to their offshore business in the next 12 months, while 18 per cent held a neutral view, according to the report.

Environmental, social and governance (ESG) investing was also fast becoming a “core and indisputable theme” for the industry, according to the report. About 97 per cent of the member institutions surveyed said that providing sustainable investing advice and related products was becoming increasingly important to their clients.

This article appeared in the South China Morning Post print edition as: Mainland private assets on rise in HK
Post