The Global Credit Crisis: Implications for the Asian Wealth Management Market
Abstract
The Global Credit Crisis: Implications for the Asian Wealth Management Market
The credit crisis is altering the structure of the wealth management industry in Asia. Anticipated growth rates for various client segments have been tempered, and the industry is experiencing a high degree of turbulence in products, providers, and channels.
A credit crisis of historical proportions has rocked the world economy. This credit crisis will have vast implications on the way retail investors view the financial world. Trust and confidence in financial products and services has been replaced by a healthy skepticism, or even outright paranoia, as investors view this scary new world order.
The wealth management industry is the key interface between the consumer and the black box that the financial services industry had become, and the whole wealth management industry has come under considerable stress as a result.
Asia, while the least affected of all the continents, has witnessed tectonic shifts in the way investors think and behave with regard to their wealth. All that was previously certain and taken for granted is now being questioned. Investors have decided to modify their behavior.
Celent’s discussions with players across the Asian markets suggests differing assessments for the various Asian subregions. The Asian wealth management market is not homogeneous. The wealth management markets in Japan, Korea, and Taiwan in the East, Singapore in the South-East, and United Arab Emirates in the Middle East are very sophisticated and mature, reacting to the credit crisis in much the same way the advanced economies in the Western Hemisphere did. The wealth management markets in Thailand, Indonesia, Malaysia, and Vietnam in the South-East, China in the East, and India in South Asia are reacting more gradually.
"Until as recently as the second quarter of 2008, it was believed that Asia would be spared any significant fallout from the credit crisis developing in the US and Western Europe," says Ravi Nawal, analyst at Celent and author of the report. "The notion that the financial systems of the majority of Asian countries are ‘loosely decoupled’ from the world economy has recently come into question due to the adverse market movements being felt in most Asian financial centers."
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