Last updated: 12:20 / Tuesday, 21 May 2013
China's Wealth Report

Chinese High Net Worth Individuals Shift Wealth Management Focus from Growing to Preserving Assets

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Chinese High Net Worth Individuals Shift Wealth Management Focus from Growing to Preserving Assets
  • “Quality of life”,“children’s education” followed “wealth preservation” on the list of top wealth management objectives.
  • "HNWIs’ demands in investment management have become more sophisticated"
  • HNWIs grew to more than 700,000 at the end of 2012.

The number of Chinese high net worth individuals (HNWIs)—defined as individuals with at least 10 million RMB (approximately $1.6 million) in investable assets—grew to more than 700,000 at the end of 2012, more than doubling since the end of 2008, and on pace to increase an additional 20 percent this year; this according to the far-reaching findings of the China Private Wealth Report 2013, co-presented at a press conference today by Bain & Company, the global business consulting firm, and China Merchants Bank. The leading report of its kind is the third biennial collaboration between the two firms on the outlook for private wealth and HNWI attitudes in China, having launched their first joint report in 2009, and then again in 2011. 

High net worth individuals in China have been very successful in creating wealth,” said Jennifer Zeng, Bain partner in Beijing and co-author of the report. “But as wealthy Chinese age, they now face a dilemma in how to preserve wealth and leave it to their families. This presents many opportunities for banks serving the private wealth market in China, if they can effectively respond to these emerging needs.”

Wealth in China is growing and expanding, the report finds. Average individual investable assets per HNWI were 29 million RMB at the end of 2008 and are estimated to grow to 31.8 million RMB by the end of this year, an increase of nearly ten percent. Further, there are now 20 provinces in China with HNWI populations exceeding 10,000, with five new provinces joining the ranks since 2010:

  • Heilongjiang—benefitting from natural resources and the reform and development of industrial bases
  • Chongqing—benefitting from the development of central and western regions and Eastern businesses that have relocated to the west
  • Shanxi, Shaanxi and Inner Mongolia—HNWI increases resulting from the growth in the coal and natural resources industries

As the ranks of China’s HNWIs have grown, investment behaviors continue to evolve. “Quality of life” and “children’s education” followed “wealth preservation” on the list of top wealth management objectives. “Wealth creation,” which topped the list of wealth management objectives in the 2009 survey, dropped to fourth place in the report released today.

"With the developement of China's private wealth management market and proliferation of investment channels, HNWIs' demans in investment management have become more sophisticated," said Sameer Chishty, Bain partner in Hong Kong and global head of the firm's wealth managament and private banking practice. "They have stronger needs in mid- and and long- term wealth planning, and have rising demands in wealth preservation and inheritance."

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