APAC wealth management integration set to grow by 5% in 2027

Rapid expansion in wealth and cross-border activities positions Asia-Pacific as a global leader in wealth management.

A 5% increase in wealth management integration across Asia-Pacific is expected by 2027, driven by a surge in personal financial assets and evolving customer needs.

Vishal Kaushik, Associate Partner at McKinsey & Company, said that the wealth management sector in the Asia-Pacific region is undergoing a significant transformation, fueled by increasing wealth and cross-border activities. 

“APAC is poised to be the fastest-growing wealth management market globally, with about 50% of global personal financial assets driven by this region, amounting to approximately $81 trillion,” Kaushik explained. This remarkable growth is further amplified by increasing cross-border flows, particularly in Singapore and Hong Kong, which are expected to manage between $3.5 to $4 trillion in assets by 2027.

Kaushik noted the current low penetration of wealth management services in the region, with only 20% of these personal financial assets being professionally managed. This gap presents a massive opportunity for the sector, as he forecasts a 4 to 5 percentage point increase in wealth management integration by 2027.

The wealth management market, historically tailored for high-net-worth individuals, is now shifting to accommodate the growing affluence of mass affluent and affluent segments. “65% of the $81 trillion in personal financial assets is driven by these groups,” he said, highlighting a significant shift in the industry's focus.

He added that banks are adapting to this change by offering a range of services for different customer segments, from digital platforms for mass customers to personalized, face-to-face engagement for high-net-worth clients. Insurance companies are also redefining their role in wealth management, launching standalone financial advisory channels and direct-to-customer digital platforms.

The drivers behind the estimated $1 trillion revenue pools in the wealth continuum include the increasing adoption of professional wealth management services, demand for personalization, hybrid engagement models, and integrated insurance and investment solutions. Customers are seeking institutions that understand their unique needs and offer tailored financial advisory solutions, combining digital and in-person engagement.

Cross-border wealth management connectivity is on the rise, driven by customers seeking asset diversification and more sophisticated wealth management services. Hong Kong and Singapore are leading Asian booking centers due to their robust wealth management infrastructure, access to talent, and overall stability.