In a comprehensive review of the wealth management markets across the leading Asia-Pacific countries China is rated as having the most attractive market for international players at the present time.

China is the smart choice for international private banks, due to its burgeoning wealth levels and low service levels. While the macro business environment in China is still difficult for foreign players, there is a vast and ever expanding pot of wealth in the country which currently is not particularly well serviced.

The market challenges in China should not, however, be underestimated, with real issues around market entry, availability of talented personnel and the attraction of HNWs in the country.

The attractiveness of the wealth management markets in Australia, Hong Kong, Singapore, India and China were evaluated using the proprietary Wealth Management Opportunity Index. This market-leading index scores the overall attractiveness of country markets as well as their customer and competitor features, all from the point of view of international private banks.

Australia is rated as being the second most attractive market for international players because it offers many of the comforts of home to Western players: a well developed economy, an attractive business environment and significant numbers of sophisticated high net worth individuals (HNWs). However, for all of its obvious appeal, high levels of competition and certain HNW characteristics make Australia’s wealth management market a dangerous one for international players, explaining why so many of the international private banks have chosen to give it a wide berth.

Perhaps controversially, India places third in the rankings. It is let down by key macro and institutional variables and by the fact that its pool of wealth is still relatively small and concentrated compared to other countries in APAC.

On the plus side, India has a number of wealth management market features which are very attractive to international players: it does not have prohibitive regulatory obstacles, the market is fragmented, the investment infrastructure is well established and the nature of HNWs is favorable to international private banks. Indeed, the significant levels of activity by international players in the market and their evident success testify to its merits the report concluded.