Hong Kong, Hong Kong S.A.R., December 26, 2013 --(PR.com
)-- Jakarta will continue to be Indonesia’s UHNWI hub. As Indonesia’s leadership continues to relax limits on foreign investment and creates synergy between what is attractive for foreign and domestic investors.
Bali will continue to be the second largest hub of UHNWIs in the near future, as the city will continue to build residences for them and build resorts and special areas to tend to their needs.
Surabaya, Indonesia’s second largest city, will continue to be the third largest hub for UHNWI in the next few years as it plans on becoming an economic center by continuing to build malls and high rise skyscrapers to support its growing economy.
New research undertaken by Q Intel Research has found that Indonesia’s ultra-high-net-worth individuals will reach 1,176 by 2019 due to the country’s buoyant stock market, the rapid rise of Indonesia’s real estate prices, and strong, consistent economic growth.
This research is published in a report called The Transformation of the Indonesian Wealth Management Market. The report builds on Q Intel Research’s propriety database of Indonesia’s retail banks, and it draws on an extensive survey that covered more than 10 Indonesian banks, multiple personal interviews with key executives within various departments of asset management companies, and discrete conversations with regulators. Some of the data also derived from various conversations and interviews with UHNWIs and HNWIs in Indonesia about the country’s wealth management industry.
Key findings of the research revealed:
The investment opportunities for Indonesia’s HNWIs and UHNWIs have increased drastically in the last few years: Indonesian HNWIs do not have to go to banks to get their wealth management needs solved. Asset management companies, private wealth management firms and pension funds are highly competitive in the country, and they offer special services and expertise that are gaining attention. But there is still major room for growth. Right now the industry is concentrated, with three asset management firms managing around half of the industries assets, including two foreign institutions, which have been operating in the nation for a while.
Indonesian HNWIs are not yet keen in using wealth management services provided by banks to handle their investments, and they still mostly prefer to place their funds in saving and time deposits, and by investing in real estate within Indonesia: Although there is a growing number of HNWIs in Indonesia, many are not aware of the benefits they can acquire by using wealth management services that banks and other parties provide. According to their data, around 70% of HNWIs prefer to invest their funds in safe, low-interest rate funds, equities, time deposits or savings accounts. They believe that the lack of current interest in HNWIs in wealth management products and services is due to the lack of education amongst the peoples regarding the benefits of wealth management services to preserve and build wealth.
Now more than 85% of Indonesian HNWIs have a laptop and many of them are beginning to utilize them to access their banking services: Out of all Asian countries, Indonesian HNWIs use Blackberries more than any of them. More than 60% of Indonesian HNWIs are using smartphones, which include Android and Iphones. Technology is becoming a main part of HNWIs’ lives and they are continuing to see more ways to integrate their technology with access to their wealth online, via cell phones, computer and tablets. The younger generations, X and Y, are even more tech savvy and are demanding that these basic services can be accessed via their technologies.
Commenting on the research, Baron Laudermilk, Managing Director & Head of Research, Q Intel Research, said, “The Indonesian wealth management market is currently going through a unique stage as the country’s economy continues to bring wealth and changes its HNWIs’ behaviors and psychological makeup. HNWIs are slowly becoming more aggressive in their investing habits, and they are becoming more knowledgeable in understanding wealth management products and services. This is bringing a plethora of challenges and opportunities to banks, asset management companies, and wealth management firms.”
To obtain the full report, please contact Steve Singh at Ssingh@qintelresearch.com (+852 67244427)
About Q Intel Research
Q Intel Research provides strategic intelligence and market insights for the financial services sector in the Asia Pacific. Q Intel Research also provides customized research that yields the greatest comparative advantage for our clients. Their clients range from multinational banks to the largest IT firms.