Singapore Set To Be the World’s Top Wealth Management Center in Two Years
Owing to strong growth in emerging Asian markets and tighter financial regulations in the post-recession West, the lion-city is tipped to outclass Switzerland and become the world’s top wealth management centre in two years.
This according to a recent study titled ‘Global Private Banking and Wealth Management Survey 2011′ by PricewaterhouseCoopers (PwC), which covered respondents from 275 firms in 67 countries. It also predicts Hong Kong to race to third place ahead of London in the same time-frame.
The PwC’s findings assume significance because in 2007 Switzerland exceeded Singapore by almost four times in terms of offshore asset management, according to the Boston Consulting Group. But since then the wealth management industry in the country has averaged a yearly growth of 16 percent, as per the statistics provided by the Monetary Authority of Singapore, with the turnover touching S$1.4 trillion in 2010. “The republic’s corruption-free environment and strong adherence to client confidentiality, which are highly valued even now, will be increasingly important over the next year or two, pulling a lot of wealth management clients to our shores,” notes Nancie Dupier, Chief Executive, HSBC Private Bank.
“Additionally, the government’s initiatives to develop private bank activities as well as tax incentives for the wealth management industry are also aiding the growth,” says Justin Ong, Asia Pacific leader, PwC global private banking and wealth management.
According to Satish Bakhda, although the wealth management industry is growing leaps and bounds in Singapore, we are now just starting to move on the fast track. The speed at which Singapore will grow depends on what happens economically and politically around the world. Further unwinding of crises will accelerate the migration of more funds into Singapore. Recently we have experienced a surge of Hedge Funds that wish to form a Singapore company to run their Singapore operations. The 10 % flat tax structure on income is also incentivising many Hedge Funds to setup companies in Singapore.
Meanwhile, some analysts advocated cautious optimism to PwC’s findings. “Singapore’s stable political climate, business friendly regulatory practices and geographical proximity to expanding economies – place it in a very advantageous position in terms of wealth management. But to assume that the West will stagnate while we move towards the top-slot in two-years is highly ambitious,” concludes Urs Brutsch, founder and managing partner at Hoffman & Partners.
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