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Working Paper: Managing Asia's Private Wealth to Serve the Real Sector

Working Paper: Managing Asia's Private Wealth to Serve the Real Sector

Posted on Friday 16th May 2014

Growth in Asia is generating unprecedented levels of financial wealth. How this wealth is used is critical to the region's future sustainable development.

Key Insights

1. Asia is on track to become the largest pool of private wealth in the world (US$48 trillion; 60 per cent in China). But, wealth is highly concentrated and 90 per cent is held in banks or managed personally.

2. Asia must harness this wealth to support Asia's long-term growth to:

  • Deepen financial markets;
  • Provide early stage business financing;
  • Build Asia's infrastructure and capital base;
  • Create jobs;
  • Provide better returns to those who created the wealth; and
  • Pave the way for steadily greater Asian integration.

3. To develop Asia's nascent private wealth management industry to meet Asia's long-term development needs:

  • Financial institutions must develop the right business models (Swiss-style relationship banking and/or U.S. brokerage-type approach) to win the trust and confidence of wealthy investors.
  • Policymakers must balance compliance/regulatory issues with more attention on how to develop private wealth funds to drive innovation and deepen capital markets.

The views expressed in this report are those of the author and do not necessarily reflect those of the Fung Global Institute. The author is solely responsible for any errors or omissions.


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