Banks will remain the primary providers of
investment services in East Asia and will continue to have huge
competitive advantages in Asian wealth planning, new research from
the Society of Trust and Estate Practitioners (STEP) has
revealed.

The 2011 Future of Asian Trust and Estate
Practice report said despite the prominence of banks in wealth
planning, independent asset management boutiques are expected to
increase their share.

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“Some banks will offer reduced fees to clients
for trust services in order to enhance their asset management
business.

“Banks can afford to run a trust company
within a private bank because of the income from asset management
fees,” one of the industry expert interviewed for the report told
STEP.

 

Hong Kong and Singapore
neck-and-neck

Almost 60% of respondents to the STEP report
agreed that both Hong Kong and Singapore will remain primarily
offshore focused in wealth planning and trusts in Asia will
continue to be used largely for the purpose of asset
protection.

Their competition as financial centres will
also continue, respondents said.

 Findings suggested that though tax
compliance regulations are expected to increase, and clients are
getting more aware of tax regulations, tax is not the major driver
of trust structures demand in Asia.

 The report confirmed that Asian clients
remain, and will continue to remain, very sensitive to fees and
more than 60% of respondents agree that clients in Hong Kong and
Singapore will also seek strong control over their assets.

 

China planning
industry still some way off

Almost 50% of respondents strongly disagreed
with the prediction that China is decades away from making an
impact on the wealth planning industry.

However, the reactions towards China’s
immediate impact on the Asian wealth planning market remain
inconsistent with no clear signal on when an onshore wealth market
will emerge.

The methodology of the STEP report included
gathering information from individual telephone interviews with 11
industry experts who introduced themes for the report with their
personal views on the future of the wealth planning market.

An online survey carried out by members of
STEP East Asia, with 100 participants from across Asia, was used to
validate these themes.