Another report has been released highlighting talent management challenges in the sector. In some ways this is a "nice problem" to have, but it has to be addressed.

The pool of wealth managers in Hong Kong isn’t widening fast enough to keep up with assets being managed in the jurisdiction, and a talent gap sharpens the need to recruit more people, a report has said. 

Hong Kong’s Financial Services Development Council, a government-funded body, has warned about a skills shortfall. The organisation took data from 250 high net worth individuals and private wealth management industry figures in November last year.

“Notwithstanding the fact that Hong Kong had some 7,600 people engaged in the private banking and PWM [private wealth management] business as of 2018, when asked about the talent supply of Hong Kong, 75 per cent of the surveyed practitioners agreed that Hong Kong is facing a talent gap, and the gap is obvious in such functions as portfolio managers and investment specialists/advisors,” the report said. 

Among domestic Hong Kong high net worth individuals, there are 153,000 of them, collectively holding $778 billion of wealth, ahead of Singapore’s $625 billion, but trailing Switzerland’s $1.159 billion. Hong Kong is also home to $1.3 trillion of cross-border wealth (Switzerland has $2.3 trillion, and Singapore has $1.0 trillion). 

The study, citing figures from Deutsche Bank and Oliver Wyman, said assets of HNW individuals globally could rise to $91 trillion in 2023 from $70 trillion in 2018, with the sharpest rise in Asia ex-Japan, where assets would rise to $24 trillion from $16 trillion over the same period.

The study also pointed to family offices as a Hong Kong growth area – creating a need for more people with skills for the space. 

“Family office was agreed to be a fast-rising subset of the PWM sector, both in terms of the number of establishments and AuM. As some focus group participants shared, family offices would look for multi-disciplined professionals; that is, these professionals do not only need to manage financial assets, but also look after businesses for the family in other aspects (e.g., real estate, managing the associated legal/trusts services). Given such trends and demanded skillsets, focus group participants suggested more could be done,” it said. 

Talent management is a challenge around the world. In the US, for example, the average age of advisors is more than 50, posing a problem if new blood does not enter the sector to cope with next-generation holders of wealth. Asia’s market is relatively young, by contrast. Big-brand banks and insurance firms are important providers; there has been a recent rise of independent wealth managers as well. Sometimes media reports talk of a “war” for private wealth talent in places such as Hong Kong and Singapore.
 

Ups and downs 
The political unrest in Hong Kong and this year’s coronavirus outbreak has cast a pall over Hong Kong to some degree, although medium-term forces, at least judging by the FSDC report, suggest that growth will remain robust.  

The study said that a number of steps are being taken in Hong Kong to handle growth challenges. For example, the University of Hong Kong now offers a bachelor of finance programme in asset management and private banking, the first undergraduate programme of its kind in Asia. The Hong Kong Monetary Authority, in collaboration with the Private Wealth Management Association, launched a pilot apprenticeship programme in 2017 for talented young people interested in careers in PWM. The jurisdiction’s government introduced the asset and wealth management pilot programme to support non-final year undergraduate students’ internships and in-service practitioners’ professional training.

As explained in our forward features list, in June we are looking at a range of talent management issues facing the sector. We would like to hear from the industry about views on this sort of topic. Email tom.burroughes@wealthbriefing.com and jackie.bennion@clearviewpublishing.com