* Thailand estimated to have about 50,000 Thai high net
* Industry handicapped by product offering
By Frederik Richter
BANGKOK, July 19 Wealth management services are
catching on among Thailand's rich, but a narrow product offering
and regulatory limitations so far prevent the industry from
offering the same services that tap growing millionaire money in
other Asian markets.
The number and wealth of Asian millionaires surpassed Europe
last year for the first time, Merrill Lynch-Capgemini said in a
report, adding that most European wealth managers plan to expand
their presence in the region to make up for sluggish growth at
Bankers estimate there are about 50,000 high net worth
individuals (HNWIs) in Thailand who are estimated to control
about 40 percent of money invested in Thai capital markets.
There is scant data on wealth management in Thailand but
bankers estimate the market is growing at about 15 percent per
year, in line with other Asian markets. But they also say this
could be even higher as the Thai market is less penetrated.
"In the mature markets like Singapore or Hong Kong there are
more choices in terms of investment products but that also means
we have the potential to generate more income," said Wichit
Phayuhanaveechai, head of retail banking and wealth management
at HSBC Thailand.
Some Thai banks have recently set up wealth management
services but they mostly use these as mere distribution channels
for their own mutual funds instead of offering access to a wide
range of asset managers.
The industry offers few products as Thailand's capital
market regulator demands that most products are
capital-protected and have for example placed restrictions on
short selling of stocks by mutual funds.
Thailand's central bank is cautiously watching the country's
exchange rate, limiting how much can be invested abroad.
Bankers say this has recently been relaxed due to the
strength of the Thai baht and Thai banks have been allowed to
raise money for local funds feeding into funds offered by
But bankers still estimate that Thailand's rich hold up to
75 percent of their money in Thailand, limiting the industry's
ability to sell international investment funds.
The industry is also handicapped in its product offering as
the Thai capital markets regulator still applies standards meant
to protect retail investors to all investors.
"In the future we hope to see separate regulations for
retail investors and high net-worth individuals," said Narit
Koslathip, assistant managing director for private wealth
management at Phatra Securities.
Thailand lacks a developed estate legislation, which means
Thailand's rich families pass on wealth from one generation to
the next without the need of professional wealth management that
in developed markets includes tax and accounting services.
Thailand is yet to fully liberalise its financial industry
and foreign banks have long been limited to just one branch.
Bankers say that established wealth managers without an
office in Thailand already cater to the market from Singapore
and Hong Kong, booking hotel rooms in Bangkok to market their
products on the ground and meet clients, underscoring the
Thailand's rich have long been limited to the about 200 "old
money" families that control Thailand's economy through diverse
business interests and vast property ownership.
But they have now been joined by the new wealthy, especially
owners of small enterprises that have emerged from Thailand's
export-led economic growth over the past couple of decades.
"There are more and more affluent people in Thailand now
who would have their wealth managed professionally," said David
Lim, head of private banking in Southeast Asia at Julius Baer.
This year, regulators have begun to allow foreign banks to
operate more than one branch and the central bank plans to
further open up Thailand's financial services industry in the
Wealth managers also expect restrictions on their product
offering to be eased. "The whole landscape might change in the
coming years," said Phatra Securities' Narit.
(Editing by Anshuman Daga)