According to the World Economic League Table 2022 study by the Centre for Economic and Business Research (CEBR), Vietnam will have the second-largest economy in Southeast Asia after Indonesia by 2036. Several regulatory changes, the fact that more than 100 million people are skilled, and the rise of the super-rich class, which is made up of ultra-high-net-worth individuals (UNHWIs), are all signs that this economy will soon have the best asset management framework.
UHNWIs are on the Rise
Vietnam has a stable economy, with inflation kept under control over the past few years. Social mobility is the fastest among the super-rich, the rich, and the middle classes. The real estate consultancy Knight Frank reveals in its report that in the years between 2020 and 2025, the growth rate of Vietnamese millionaires will be 32%, and that of the super-rich will be 31%.
The amount of managed wealth assets as a percentage of total personal financial assets (PFA) is projected to rise, but the starting point will be different for different customer segments. By 2027, affluent segments will have about five-and-a-half times more managed wealth assets than HNWIs. McKinsey, a global management consulting firm, says this means that institutions will be able to take an extra USD 65 billion to USD 75 billion in managed wealth assets in the industry.
Shortages in Digital Infrastructure
Still, there are some places that aren’t as good as they could be and need to be fixed. McKinsey points out, for example, that Vietnam’s high smartphone use and fast growth in digital usage haven’t yet led to digital wealth management skills. There could be anywhere from four to six different kinds of internal systems in a bank, which makes it hard for relationship managers to see the whole customer account at once.
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Vietnam has the unique opportunity to amplify the impact of its wealth management sector in light of the country’s resilient economic growth and expanding consumer base. A very effective way of developing the wealth continuum is to know customers deeply and accurately. Understanding customers’ nuances is paramount, including seeing the subtle but important differences between the affluent and HNWIs segments.
To build a business that is focused on customers across Vietnam’s wealth spectrum, financial institutions need to become obsessed with what customers want. McKinsey says that if the problems are fixed, banks, insurance companies, securities firms, and wealth-related fintechs can put wealth management at the top of their list of priorities and take advantage of the huge market potential in this sector.
