The Asian Private Banker did a survey in 2018 and found that Singapore was the most preferred wealth management hub ahead of Switzerland and Hong Kong. This is in part to Singapore’s rule of law and sophistication of banking services.
Most of the inflow of wealth management to Singapore comes from South East Asia, followed by mainland China second and India third. Singapore has qualified as a good place for mainland China money as it not so closely connected with the mainland and is an independent country.
Some key reasons why investors are investing into Singapore are as set out below:
#1: Singapore has a strong rule of law
The Singapore legal system is based on UK common law and has a well established globally recognized and highly efficient juridical system. Singapore also in recent times has become a global arbitration hub so many cross border arbitration cases are being heard in Singapore.
From a wealth management perspective such rule of law is important as it ensures that contracts are followed and assets managed according to their investment mandates.
#2: Global Financial Hub
While Hong Kong has grown to become the largest IPO centre in Asia in recent times, Singapore has grown to become the largest private banking centre in Asia over time. The investors that come to Singapore are looking for stability and sophistication of financial products.
Singapore is thus a trusted independent financial hub.
#3: Stable Political System
Many investors like investing in Singapore as Singapore has a stable political system which results in the Singapore government carrying out long term planning. Long term political stability is key for long term investment planning.
Case Study #1
Many listed company bosses when listing their companies on the Hong Kong or Nasdaq stock market have set up Singapore family offices to manage their wealth due to the fact that there are many Singapore private banks that have specialized services to service them. Many family offices have been set up over time to cater to this growing wealth segment.
Case Study #2
Many South East Asian businessmen have over time shifted their cash assets and holding companies to Singapore to manage their family wealth. Many from Indonesia and Myanmar have set up holding entities in Singapore to do cross border investments into their respective companies and some of the larger companies have listed on the Singapore Stock exchange and the Hong Kong Exchange.
Singapore remains a good place for asset management and wealth management. Many South East Asian families have shifted their family investment vehicles to Singapore and manage their family investments from Singapore and it is expected that this trend will continue to accelerate in the coming years.