A survey of affluent Asians shows that the average respondent expects to achieve 12 per cent compound annual growth of their wealth for the next ten years.

Ambitious, bullish, perhaps slightly unrealistic, but if
there’s one thing affluent Asians are not, it’s pessimistic about their own wealth
prospects. 

A new survey of nearly 2,800 Asian clients of Standard Chartered with an average net worth of $1.4 million, has shown that the
average respondent wants to achieve a steep 12 per cent compound annual
growth of their wealth for the next ten years. 

The survey, FuturePriority Report, was conducted by the bank and intelligence provider Scorpio
Partnership in October and November last year. Respondents said they want to grow their assets by an average $4 million within
a decade. South Korea
has the highest financial goal ($6 million), followed by India ($4.8 million) and
China ($4.5 million). This will require highly aggressive double digit
growth, for most of them.

Some have higher expectations than others. While at the more
realistic end of the spectrum, individuals in Taiwan thought they could grow
their wealth at around 7 per cent per annum to achieve $2.7 million within the
next decade, those in Indonesia are eyeing a whopping 18 per cent CAGR of their
assets, per year for the next decade to achieve $2.9 million more money.

This is a tall order on any private banker, particularly in
the light of current market turmoil. Last year Asian equity markets fell by
over $1 trillion, with declines led by Chinese markets (Shanghai and Shenzhen
stock exchanges ended last year with total value traded of $7 trillion, $1.7
trillion lower than the previous year according to Reuters). India’s Bombay and National Stock Exchanges also suffered
declines, as did Singapore's.

When asked whether it would be possible for the bank to grow
wealth at this pace every year for the next decade, Foo Mee Har, global head of
priority and international banking for Standard Chartered, said: “This is a
reflection of their confidence in their own economy. You have to balance risk appetite
with return expectations, and sometimes those expectations have to be managed.” She was present at the media briefing to launch the report at the bank's Hong Kong office. 

Indeed, wealth confidence is a defining characteristic
of the affluent and a strong majority of Asia’s affluent (77 per cent) remain
confident in growing their wealth in the next 12 months, although the
confidence level is slightly lower than that of the previous year (81 per cent).

Of the nine countries surveyed, India and
Indonesia stand out as being the most confident (88 per cent and 98 per cent
respectively), while Singapore, Hong Kong and Taiwan share similar levels of
wealth confidence at 70 per cent, 68 per cent and 67 per cent respectively.

Wealth
creation

How are Asia’s affluent hoping to achieve these goals, aside from handing over to their private banker? 

A preference for
tangible investment options is clear, with respondents stating high interest savings (43 per cent), gold
(43 per cent) and property (34 per cent) as their top choices in the next 12
months. The Asian affluent are also fairly diversified and see themselves
investing in an average of 3.3 product types in the next 12 months – slightly up on last year's 3.1. 

Also loans will be important. One hundred per cent are looking to take out financing this year including business loans, mortgages and personal loans, but rather than spending it on trophies they are borrowing money to make more money.

Asian affluents see themselves using an average of 1.6
types of loans this year mainly to finance personal use or large assets like
property or business.

“The report showed that Asian affluent are
sophisticated wealth builders, adopting a dual-prong approach of investing, and
using credit or leverage to enhance their returns. They are careful about the
use of credit as they also view it as a wealth management tool, with one-third
of respondents saying that it can help them enhance investment returns when
used carefully,” said Foo Mee Har.

International
opportunities

The report also showed that while most
respondents see Asia as the region offering excellent wealth creation
opportunities, in the longer term they adopt a more international perspective.

The report analyses where the burgeoning rich see the greatest wealth creation opportunities. The study reveals that while
Asia is top of mind for both the short and long terms, they are also not
discounting opportunities beyond their doorstep. 

About a third of respondents view Europe and
North America as offering good wealth creation prospects in the next 12 months.
These numbers rise substantially over a five year horizon, particularly for
Middle East & Africa and Latin America, showing that the Asian affluent
investor takes a balanced, sophisticated and global view to wealth creation.

The survey canvassed individuals in China, India, Indonesia, Hong Kong, Malaysia, Singapore, South
Korea, Taiwan and Thailand.