The study, ‘Private Banking After The Perfect Storm’, by New York and London-based management consultancy Booz & Co – also notes that private banks will need to adapt their business models to cater for this new world.
The research, based on some 140 in-depth interviews with senior private bankers around the world, concluded that for the next few years emerging markets will lead the industrialised world in returning to pre-crisis growth rates.
“Emerging markets are expected to become more politically stable, which will encourage their HNWIs to keep their wealth increasingly onshore,” said Booz, which defines HNWIs as having more than $1m in investible assets.
Nearly 3.6 million of the global HNWIs are expected to live in the Asia/Pacific region, up from 2.6 million in 2008, the report noted.
Another finding of the researchers was that a crackdown on undeclared assets is forcing offshore private banks to come up with new ways of catering for their HNW customers.
Faced with increased scrutiny of offshore accounts by tax authorities, especially those of G20 countries, private investors have started to repatriate previously undeclared offshore funds, it notes.
“Offshore private banks will need to create new strategies to play in a ‘declared world’, and private banks heavily dependent on un-declared assets might find themselves without a viable business model sooner rather than later,” according to Booz.
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