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Wealth in Singapore: Sizing the Market Opportunity 2017

Wealth in Singapore: Sizing the Market Opportunity 2017

Summary

Wealth in Singapore: Sizing the Market Opportunity 2017 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.

Singapore is Asia’s pre-eminent offshore investment center, with 80% of the wealth invested in funds sourced from non-residents in 2015. However, the onshore market is a major source of assets under management (AUM) in its own right, with 1.2 million affluent individuals in 2016 despite the city state’s small population. An onshore operation is clearly worth the effort for any wealth manager targeting mass affluent investors.

Specifically the report -

  • Sizes the affluent market (both by number of individuals and the value of their liquid assets) using our proprietary datasets.
  • Analyzes which asset classes are favored by Singaporean investors and how their preferences impact the growth of the total savings and investments market.
  • Examines HNW clients’ attitudes towards non-traditional investments, such as property and commodities.
  • Identifies key drivers and booking centers for offshore investments.
  • Examines the tax landscape in Singapore and future implications for investors.
Scope
  • HNW individuals totaled 29,660 in 2016 - little changed from 2015, a tiny proportion of the overall population, and well below the levels seen in other wealth hubs such as the US and Switzerland.
  • HNW liquid assets growth will slow to 7.0% a year between 2015 and 2020.
  • Bonds will be the fastest-growing asset class, but more due to greater availability than client demand.
  • While Singapore attracts significant offshore investment, HNW residents are also keen to invest abroad, with almost half of AUM invested offshore.
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 2020.
  • Identify your most promising client segment by analyzing penetration of affluent individuals in Singapore.
  • Evaluate your HNW proposition by understanding how the Singaporean tax system impacts HNW clients.
  • Review your offshore strategy by identifying HNW motivations for offshore investments and their preferred booking centers.


  • Executive Summary
    • 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
        • Table Figure 1: The bulk of the deposit market in Singapore is purely onshore
    • Favorable domestic conditions will drive further expansion in onshore wealth
      • A third of Singapore's population will be classed as affluent by 2020
        • Table Figure 2: Growth in the onshore wealth market is forecast to be modestly strong
      • The bulk of Singapore's onshore wealth is concentrated in the hands of the affluent
        • Table Figure 3: Assets will rise robustly early in the forecast
      • HNW portfolios above $10m in AUM will experience the highest growth
        • Table Average monthly income from work per employed household member by deciles, as percentage of total market average , 2000–16
    • Illiquid wealth accounts for a much greater bulk of households assets in Singapore
      • Households have been growing the proportion of wealth in the securities markets
        • Table Figure 4: A weak property market has seen financial assets rise as a portion of Singaporean wealth
      • CPF balances are a growing pool for wealth managers to consider
        • Table Figure 5: Illiquid assets dominate the household balance sheet in Singapore, with CPF center stage
  • Drivers of Growth in the Singaporean Wealth Market
    • Total retail investments growth accelerated again in 2016
      • Growth in retail savings and investments will rise into 2017
        • Table Figure 6: Singapore's retail investment market has rediscovered its pep
      • Onshore wealth is still largely a deposit game – a stabilizing factor for future savings and investments growth
        • Table Figure 7: A limited amount of retail savings are entrusted to the financial markets compared to the West
      • Wealth invested directly in the equity and bond markets has risen, but deposits will have an enduring allure
        • Table Figure 8: Deposits will continue to dominate the Singapore retail wealth market
    • 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 forecast to be 1-3% in 2017, broadly similar to 2016
        • Table Figure 9: Deposit growth will remain steady and strong as wage growth revives
    • After a brief splurge, bond holdings will grow more slowly in the future
      • Table Figure 10:Despite government efforts, direct retail bond holdings remain low
    • With the STI finally trading comfortably above 3,000 in 2017, investors will be drawn back to equity
      • Table Figure 11:The stock market in Singapore has struggled to add value since 2007
      • Retail equity holdings track the performance of the stock market
        • Table Figure 12:With the STI set to rise, equities and mutual fund holdings are sure to follow
      • Mutual funds will only slowly regain their share of retail investors' portfolios, as inflows went into reverse in 2016
        • Table Figure 13:Investors lost their appetite for equity funds in 2016
        • Table Figure 14:Alternative funds have gained at the expense of equity funds
  • HNW Investment Preferences
    • Illiquid investments make up a significant percentage of onshore assets
      • Private equity and hedge funds are the most popular non-traditional investments
      • Property holds a long-term attraction for HNW individuals, but local conditions have dampened its current role
      • Offering commodity investments is a good niche strategy in what remains a regional trading hub
        • Table Figure 15:Hedge funds have come to dominate the alternative scene in Singapore
    • Offshore investments drain almost half of Singaporean HNW wealth from local institutions
      • Onshore banks need to offer offshore services to capture a greater share of HNW portfolios
        • Table Figure 16:Singaporean investors place offshore funds into a variety of asset classes
      • The large expat community drives the offshore market for Singaporean wealth
        • Table Figure 17:Singapore's large expat community strongly influences the offshoring of wealth
      • Global links will help wealth managers capture much of the wealth booked offshore
        • Table Figure 18:Western booking centers dominate the offshore market of Singapore
      • Singapore has been more open to DTCs than TIEAs, but this is changing
        • Table Figure 19:Singapore has aggressively pursued DTCs with partners around the world
      • Tax rates are low and stable in Singapore, making it an attractive destination for foreign and local wealth
        • Table Personal income tax rates and charges, 2017
        • Table Figure 20:Stamp duty is payable by both sellers and buyers of fixed property in Singapore
  • Appendix
    • Abbreviations and acronyms
    • Supplementary data
      • Table Singapore: adult population segmented by affluent category and asset band (000s), 2010
      • Table Singapore: adult population segmented by affluent category and asset band (000s), 2016e f
      • Table Singapore: retail wealth segmented by affluent category and asset band (000s), 2010
      • Table Singapore: retail wealth segmented by affluent category and asset band (000s), 2016e f
    • Definitions
      • Affluent
      • CRS
      • Domicile
      • DTC
      • Exchange of information
      • FATCA
      • HNW
      • Liquid assets
      • Mass affluent
      • Onshore
      • Residency
      • TIEAs
    • Methodology
      • 2016 Global Wealth Managers Survey
      • 2015 Global Wealth Managers Survey
      • Global Wealth Model methodology
      • Global Retail Investments Analytics methodology
    • Bibliography
    • Further reading

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