Singapore and HK to Dominate Offshore Wealth

Offshore Centre,Singapore

Offshore Centre,Singapore

Global management consulting firm Boston Consulting Group says the creation of new wealth in 2015 was driven by rising household income, rather than by the performance of existing assets.

The Boston Consulting Group in its latest wealth report titled «Navigating the New Client Landscape,» said that global private wealth grew sluggishly in 2015, with some markets seeing significant slowdowns, leaving wealth managers searching for innovative ways to meet the shifting needs of diverse client segments.

Private financial wealth grew by 5.2 percent in 2015 to a total of $168 trillion, according to the report. The rise was less than a year earlier, when global wealth rose by more than 7 percent. The strongest increase was recorded in the reasonably fast-growing Asia-Pacific region, where private wealth grew 13 percent in 2015 after a 14 percent rise in 2014.

Contrast to Recent Years

However in contrast to recent years, the bulk of global wealth growth in 2015 was driven by the creation of new wealth, such as rising household income, rather than by the performance of existing assets.

The number of global millionaire households grew by 6 percent in 2015, with several countries, particularly China and India, seeing large increases.

Strategic Locations 

The report says that private wealth booked in offshore centers grew by a modest 3 percent in 2015 to almost $10 trillion. A key factor was the repatriation of offshore assets by investors in developed markets. The annual growth of offshore wealth globally is expected to pick up through 2020, although at a lower rate than onshore wealth.

Among offshore centers, Hong Kong and Singapore witnessed the strongest growth of around 10 percent during 2015. Offshore wealth booked in these domiciles is projected to grow at roughly 10 percent per annum through 2020. With their key geographical advantages of being in the centre of the world's growth region their long term status as leading offshore wealth hubs looks secure.

Switzerland Prevails

«Although regulatory measures aimed at fighting tax evasion will continue to persuade some old-world investors to repatriate their wealth, regulation also stabilises the market and provides new opportunities to move fully-taxed wealth offshore in search of better service quality, product diversity, economic stability, and the like,» said Anna Zakrzewski, (pictured) a BCG partner and a co-author of the report.

Anna 506

Switzerland however, with its high service quality, diverse product offerings, political stability, safe-haven currency, and location in the center of Europe remains the largest single off-shore center through 2020.

 

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