Assets under management by wealth managers and financial institutions based in Singapore grew by 12 percent to a record S$1.82 trillion (US$1.5 trillion) in 2013, confirming the city-state’s role as the world’s fastest growing wealth centre, according to the Monetary Authority of Singapore (MAS).
Growth was recorded in a range of sub-sectors including traditional and alternative managers, insurers and wealth managers, the central bank said, in its annual report. “The Asia-Pacific region continues to be a key investment destination for global investors with longer term investment horizons, both within and outside Asia. Allocation to the Asia-Pacific region accounted for 67 percent of total AUM in 2013.”
Singapore has been catching up on Switzerland as a major offshore wealth management centre in the past decade, since the city-state decided to make private banking a major plank of its strategy to be a world-class financial centre. Switzerland is estimated to still have $2.2 trillion of assets under management, despite the continued attack on the country’s banking system by the US and other states determined to snuff out tax evasion.
A survey by Boston Consulting Group found that, on a regional basis, the Asia-Pacific area continues to post the strongest growth in private wealth globally, after rising 30.5 percent to US$37.0 trillion last year. The Asia-Pacific region is expected to overtake Western Europe as the second-wealthiest region this year and North America as the wealthiest in 2018, BCG forecast.
Meanwhile, Singapore sees no evidence that the wealthy are shifting funds from Europe to Asia in order to escape strengthened laws on tax avoidance and money-laundering, according Ravi Menon, managing director of the MAS.
Saying the city state was “not the place to come to” for anyone wanting to park funds, Mr Menon said, “When you look at the data for wealth management and private banking in Singapore, most of the growth has come from sources within Asia. The European share of private banking assets in Singapore has been relatively stable, despite stories you sometimes hear about funds being diverted to Asia.”
His comments, in an interview with the Central Banking Journal, contradicted a widespread belief that Singapore’s emergence as one of the world’s biggest wealth management hubs is partly due to a flood of cash from Europe exiting amid tough evasion clampdowns by the US and other countries.