As the number of wealthy Chinese has more than doubled in the past five years, investment behaviour has shifted towards assets preservation, with half Chinese UHNWIs now considering inheritance planning.

 

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A new report from Bain & Co and CMB has showed that almost 30% of the 3,000 surveyed HNWIs have named wealth preservation as their top priority. Among them, 15% have already established family trusts while more than 50% are said to be looking at it.

 

"High net worth individuals in China have been very successful in creating wealth but as they age, they now face a dilemma in how to preserve wealth and leave it to their families," says Jennifer Zeng, a Bain & Co. partner in Beijing.

 

With the number of HNWI still set to grow by 20% by the end of 2013 and the average individual investable assets per HNW person forecasts to reach US$5.2 million, the Chinese private banking sector is now expected to develop tailored strategies to address their clients’ emerging needs and higher expectations.

 

"With the development of China’s private wealth management market and proliferation of investment channels, HNWIs’ demand in investment management have become more sophisticated," said Sameer Chishty, a Bain & Co. partner in Hong Kong and global head of the firm’s wealth management and private banking practice.

"They have stronger needs in mid- and long- term wealth planning, and have rising demands in wealth preservation and inheritance."

As a result of increasing competition with international banks, almost double the number of Chinese HNWIs have allocated their assets abroad over the past years, seeking superior expertise and more sophisticated services to approach the global market. Around 60% of those interviewed by Bain who have overseas investment are said to be likely to increase their overseas holdings in the future.