More than two-third of wealthy individuals in Hong Kong choose to base themselves locally due to economic opportunities, according to the latest report in the Barclays Wealth Insights series. In addition, 40% are drawn by its favourable environment to start a business.

 

Harry Lai, market head of Hong Kong, Barclays Wealth and Investment Management, said: “We definitely do see that economic opportunities are a key factor in many clients and their next generation remaining in Hong Kong. Hong Kong remains a land of much opportunity and we work very closely with our entrepreneurial clients to not just manage their money but also provide corporate and investment banking solutions for them to further grow their businesses.”

 

Based on a global survey of more than 2,000 HNWIs comprising entrepreneurs, business leaders and investors, the report, ‘Barclays Wealth Insights Volume 18: The Rise of the Global Citizen?’ provides an in-depth study into the rise of the high net worth global citizen. The report navigates the global landscape of wealth, examining where individuals today live, work, retire and give their time and money.

 

The report also reveals that just under three-quarters (71%) of Hong Kong’s HNWIs have never lived abroad, placing them second behind India (at 98%) as the group most likely to have only lived in one country. Sixteen percent of wealthy Hong Kongers plan to move abroad in the next five years, compared to 47% in China and 23% in Singapore. Singapore (44%) ranks as the top destination for Hong Kong HNWIs, followed by China (31%). For China’s wealthy, Hong Kong (30%) is the top destination, followed by Canada (23%).

 

“International career and economic opportunities are amongst the top reasons for the wealthy in Hong Kong to relocate while better educational and employment opportunities for their children is the main pull factor for Chinese high net worth individuals. With a presence in over 50 countries worldwide, we are able to help meet the wide ranging wealth management needs of our clients - whether they choose to expand their businesses in Hong Kong or to move abroad in pursuit of greener pastures. For instance, Singapore ranks among one of the top destinations for Hong Kong’s wealthy and in 2011, we established a Greater China desk there to meet the specific needs of clients in North Asia,” said Lai. 

 

Globally, the report shows that 57% of the world’s wealthy individuals have only lived in one country, yet there are marked regional differences, with those in burgeoning economies moving around much more. Just 13% of wealthy individuals in Monaco have lived in one country, which rises to 26% in UAE and 32% in Latin America.

 

Local investors

Looking at where HNWIs invest their money today, the report reveals that two thirds (67%) of wealthy individuals in Hong Kong invest in a geographically diversified portfolio of financial assets, compared to 77% of China. 

 

“Investors in China and Hong Kong are highly sophisticated and have wide knowledge of global financial markets. In terms of their preference for investment assets, many of our clients across Greater China have their next generation studying overseas and as a result have invested in property in the key cities of New York, London and Singapore. Appetite for investing in property remains healthy among many of the wealthy, alongside a renewed interest in equities,” added Lai.

 

In addition, about 70% of the investable assets of Hong Kong HNWIs are held in Hong Kong-based financial institutions and banks, mirroring the global trend whereby HNWIs who have only lived in one country are more likely to hold the majority of their investable assets locally.

 

However, Hong Kong-based investable assets may shift abroad in the near future, as 57% of Hong Kong wealthy believe that their offspring will live in more countries than they have done. This trend is even more pronounced in emerging economies such as India (91% of HNWIs believe this) and China (90%).

 

An open map

 

In terms of migration patterns and wealth flows, North America and Europe could see the biggest influxes of global HNWIs. However regions such as Asia- Pacific are also seeing over one in 10 (11%) HNWIs from Europe and one in 20 (6%) of those in North America looking to move there in the next five years, showing the shift of wealth hot spots from West to East. The top overall reasons for considering a move among the global high net worth include having a more desirable climate (35%), economic security (25%) and looking to retire in another region (24%).

 

Despite the significant number of respondents (43%) in Asia-Pacific looking to move to North America, intra-regional migration (45%) still ranks slightly ahead. The wealthy in Asia-Pacific continue to be attracted by opportunities within the region, especially the availability of economic opportunities and international careers.

 

HNWIs in emerging markets and entrepreneurs have the greatest wanderlust

The research also reveals that it is the world’s wealthy entrepreneurs and those in emerging markets who are most likely to be planning a move in the next five years, as globalization, technological advances and political and economic uncertainty in certain regions have led to an opening up of markets and an increase in mobility among the world’s wealthy. Just under a third (29%) of wealthy entrepreneurs are planning a move, which makes them twice as likely as global HNWIs to relocate– 16% of whom are planning to move to a different country in the next five years.

 

Across global markets, nearly half of HNWIs in China and more than a third (36%) in Qatar and Latin America (34%) are considering a move, compared to just 7% in Japan, 6% in the US and 4% in Switzerland. While the Chinese and Qatari wealthy are the most driven by better educational and employment opportunities for their children (78% and 39% say this respectively), those in Latin America are looking to move to experience another culture (41%) and have better economic security (29%).

 

For wealthy entrepreneurs currently planning a move, 41% are looking to move for economic opportunity, 29% are doing so to start a new business and 27% to pursue an international career, showing that high net worth business owners are increasingly looking to other markets for growth.