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ASIA’S UHNWI COMMUNITY


Shared concerns, but north-south differences


In


May 2011, Julius Baer distributed a questionnaire to clients residing in Asia to measure their attitudes towards the firm and general market trends. The statistically meaningful survey results were based on


the responses of over 100 clients (78% male, 68% between 40 and 59 years old).


In the context of the Julius Baer Wealth Report: Asia, over 100 Julius Baer Group clients from across the Asia region were surveyed in May 2011 to gain greater insights into how Asia’s HNWI view the world. The results also provide a picture of the regional differences in the concerns of Asia’s HNWI community, but also what unifies their beliefs and strategies.


development in the medium term, four out of five respondents mentioned the risk of an economic downturn in Asia, a correction in local


W Ranking of concerns Ranking of concerns


1 2 3 4 5


Economic downturn in Asia Correction in stock markets Foreign exchangemarkets volatility Rising interest rates Volatility in real estate prices


stock markets and foreign exchange volatility. Less worrying, but still causing some unease, was a rise in interest rates as well as volatility in real estate prices. Concerns such as the European sovereign debt crisis and political turmoil in the Middle East also received some notice, but to a far lesser extent. Interestingly, inflation did not feature prominently in


the results. In terms of regional splits, the survey and additional in-depth client discussions found that clients based in both North and South Asia had similar views across all of the main “concern” categories. What do we take away from this result? On the


one hand, there is a clear recognition of Asia’s role in supporting global growth, both during the recent downturn and in the recovery phase. On the other hand, the majority of respondents continue to link their wealth to their operating businesses. In other words, there is an important and direct linkage between the GDP growth prospects for Asia in the medium term and how respondents see their wealth developing over time. While real estate forms an important part of many of Julius Baer’s clients’ overall wealth, falling property prices did not feature as an especially vexing concern.


Source: Julius Baer 28 FAMILY OFFICE: ASIA TOMORROW Source: Julius Baer


hen asked about their greatest concerns regarding the economic


In terms of philanthropy, approximately 50 per cent


of our respondents said they actively contributed in this area. In terms or regional splits, clients based in South Asia more frequently commented on their inclination to donate to charity than their North Asian counterparts. The bulk of the philanthropy is focused on social causes. Turning to the environment, clients overwhelmingly associate global warming as being caused by human activity. In this vein, the bulk of respondents, on average, would be willing to pay up to a 10 per cent premium for a hybrid car. The client discussions, which sought to gain deeper


insights into the topics raised in the client survey. Of the many topics covered, arguably the most interesting and controversial related to China and the environment. As a starter, interviewees residing in Hong Kong raised the issue of air quality, but pointed out that the issue of air pollution cannot rest with China alone. That said, the majority of interviewees argued that


over the shorter term, it is appropriate for China to sacrifice a degree of environmental protection in order to facilitate faster economic growth. The pressure to deliver a higher standard of living for China’s population meant that shortcuts are needed. Opinions were strong on both sides of this issue;


however, with many clients taking the view that protecting the environment had moral dimensions as well.


The direction of the currency markets was a frequent


topic of discussion with clients. Overall, Singapore dollar- based investors echoed the rising economic confidence of Asia in the increased value of their currency, while Hong Kong dollar-centric investors lamented the decline in their international purchasing power. Despite the short-term benefits of rising currencies across most of Asia, clients raised long-term concerns over the US


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