Traditional competitive advantages are fading in APAC’s booming wealth management sector, making a strong client-centric culture the new key to success, writes Mary Leung.
Asia-Pacific’s (APAC’s) wealth management industry is entering a period of profound transformation. With AUM reaching USD 21.1 trillion in 2023,[1] and an estimated USD 5.8 trillion in intergenerational transfers expected by 2030,[2] the region holds unprecedented opportunity.
In the past, a storied brand and an exclusive relationship would have gone a long way in securing success. However, today’s wealth clients expect more: bespoke solutions, intuitive digital experiences, product innovation, and clarity about fees and values. At the same time, disruptive forces, including AI-driven platforms, robo-advisors, tokenised assets, new asset classes, and rising regulatory expectations, are reshaping the competitive landscape and putting pressure on the traditional model. Given this context, what will it take to thrive in this era?
Technology, disruption, and the advice challenge
Technological innovation holds a great deal of promise in delivering the future of wealth management: robo-advisors, commission-free trading platforms, and AI-enabled tools are redefining how clients receive investment advice. According to PwC, 45% of asset and wealth managers expect that AI will help generate new revenue streams in the next 12 months.[3]
On the other hand, clients welcome digital tools, but they expect more than just automation. A McKinsey survey found that while 80% of APAC wealth clients are open to digital solutions, nearly half still prefer hybrid models that combine the ease and convenience of fully automated platforms and the trust and judgment offered by human advisors.[4] Clients are savvy enough to understand the cost benefits brought about by digital tools, and in the same study, half of the survey respondents said they were only willing to pay 10 to 20 percent of the fees charged by traditional providers for advisory services when using a digital platform.
Tokenised assets are also gaining momentum. A CFA Institute report[5] on the application of tokenised technology in investment management sets out the potential for distributed ledger technology to fundamentally reshape how investment funds are structured and distributed, with the benefits of increased transparency and enabling fractional access to traditionally illiquid assets like private equity and real estate.
These advances promise scale and efficiency, but also bring new risks – if a client can generate a model portfolio in seconds, what will make them turn to (or retain) a human advisor? If an AI-driven platform can implement cross-border strategies for a fraction of the fee, what does it mean for traditional business models? The answer lies in what technology can’t (yet) replicate: empathy, judgment, contextual insights, and the ability to see around corners.
For traditional wealth managers, the challenge is clear: to stay relevant, they must combine the scale of tech with the trust and professionalism of human advice. That means raising professional standards and embracing ethical innovation, not just digital distribution.
An inflection point
APAC is a magnet for capital, talent, and innovation when it comes to wealth management. Australia, China and Japan remain the region’s largest onshore wealth markets by assets under management, while Singapore and Hong Kong have solidified their status as offshore hubs. Together, the two cities are home to approximately 15 percent of the world’s single-family offices, and in total manage roughly USD 2.6 trillion in offshore assets in 2023.[6]
According to Accenture, in the past year, Singapore has benefitted from inflows from ASEAN countries, including Indonesia, Malaysia, Thailand and Vietnam, while Hong Kong has benefited from renewed China inflows.[7]
With this growth comes complexity. Clients are increasingly global, multi-generational, and values-driven. Managing their wealth requires navigating cross-border tax and estate issues, ESG considerations, and demand for access to alternative asset classes. The product landscape itself is changing – from traditional instruments to private market funds and tokenised assets – raising the bar for product knowledge and advisory competence.
This calls for continuous upskilling for wealth professionals. Today’s advisors must do more than just nurture client relationships, they must also develop product expertise, harness digital innovations and stay ahead of regulatory changes to deliver value in a sustainable manner. Demonstrating consistent professionalism and building trust becomes the true moat in an environment of change and disruption.
Misconduct: a risk to growth
Despite heightened scrutiny by regulators, misconduct continues to pose a significant risk to the industry’s reputation and client trust. Recent high profile enforcement actions such as Hang Seng Bank’s USD 8.5 million fine in Hong Kong for overcharging[8] and JP Morgan’s penalty in Singapore[9] for making inadequate disclosures illustrate how quickly trust can be undermined, even among leading firms.
Persistent regulatory scrutiny reinforces this trend. In Australia, the Hayne Royal Commission in 2019 found that in 75% of reviewed financial advice files, advisors failed to act in their clients’ best interests. The ensuing reputational damage was severe, as was the financial impact: according to ASIC, in 2022 alone, six of Australia’s largest banking and financial services groups had paid or offered a total of AUD 4.7 billion in compensation to customers affected by misconduct or non-compliant advice.
Since then, ASIC has stepped up its enforcement efforts and has actively taken action against a range of firms and individuals to protect consumers against dishonest conduct, conflicted remuneration, and inappropriate advice.[10]
In 2024, the Australian Government passed the Better Financial Outcomes (DBFO) Act with the objectives of improving the quality of financial advice and includes measures to ensure that remuneration structures do not conflict with client’s best interest. As part of the DBFO Act, the Compensation Scheme of Last Resort (CSLR) was established to provide up to AU$150,000 in compensation for victims of financial services misconduct.
In Singapore, the Monetary Authority of Singapore (MAS) continues to signal strong expectations around product suitability, know-your-client practices, and the ethical delivery of advice. In May 2024, MAS expanded its Fair Dealing Guidelines to encompass all financial institutions and the full range of products and services they offer, extending beyond the previous focus on investment products and advisory services.
This broadened scope mandates that financial institutions integrate fair dealing principles throughout the entire product and services lifecycle, including design, marketing, delivery, and post-sale support. Key updates require financial institutions to implement objective processes for assessing customer applications, ensure product suitability for target client segment, provide clear and accurate information, and uphold the competence of staff members. More importantly, boards and senior management are now explicitly accountable for embedding fair dealing into corporate culture and governance frameworks.
All the above echoes the earlier findings of the 2019 report on sales inducements published by CFA Institute,[11] which studied how commission-driven advice models can create misaligned incentives and undermine investor outcomes, and called for transparency, professionalism, accountability, and clarity when it comes to an advisor’s duty of care.
Looking ahead, regulators across the region are increasingly scrutiny on AI-powered advice tools, product governance, and cross-border selling. There is also a growing expectation for firms to demonstrate that organisational culture is being embedded in day-to-day decision making, not just in compliance manuals.
Ultimately, building and maintaining trust is not a box-ticking exercise – it must be built through culture, competence, and clarity.
Culture, not just compliance
Culture has emerged as a frontline issue for both regulators and financial institutions, not just as a matter of tone at the top, but of daily practice across every level of an organisation. Across the APAC region, regulators are increasingly recognising that a strong risk culture is a cornerstone of effective supervision. APRA, the prudential regulator in Australia, includes risk culture reviews in its supervisory approach, focusing on how values, norms and incentives influence behaviour.
MAS’s Individual Accountability and Conduct Guidelines set out expectations for financial institutions to clearly identify senior managers, define their responsibilities, and embed conduct standards into performance management and decision-making processes. In Hong Kong, the Manager-in-Charge regime places clear responsibility for misconduct on senior executives.
Yet culture cannot be enforced through regulation alone. There is a growing recognition that culture cannot be “audited in” after the fact – it must be shaped intentionally through hiring, training, incentives, and rigorous discussion. In addition to relationship managers, product gatekeepers, platform designers, and compliance leaders all play a role. As innovation accelerates, staying abreast of product innovation, technological change and regulatory expectations becomes a baseline requirement.
Future-proofing wealth management in APAC
The APAC wealth management industry is at an inflection point. There are mouth-watering growth prospects, but competition, client expectations, and regulatory scrutiny are also accelerating. To compete, firms must leave behind outdated sales models and deliver advice and services that meet the expectations of an evolving clientele. Firms and advisors who lead with transparency, invest in professionalism, and adapt to a digital-first, client-centric mentality will come out on top.
Regulatory compliance is table stakes – the true moat will belong to those who are genuinely dedicated to their clients’ best interests. Building a durable foundation of trust in a fast-changing world and having the courage to evolve while staying anchored in what matters most would be key. By embedding a culture of transparency and integrity at all levels, wealth managers can build lasting trust that withstands regulatory scrutiny and enhances client loyalty.
—
By Mary Leung, Senior Advisor, Research and Advocacy, Asia Pacific, CFA Institute
[1] https://www.mckinsey.com/featured-insights/future-of-asia/a-wake-up-call-to-tap-into-digital-wealth#/
[2] https://www.mckinsey.com/industries/financial-services/our-insights/asia-pacifics-family-office-boom-opportunity-knocks
[3] https://www.pwc.com/us/en/industries/financial-services/library/asset-wealth-management-trends.html#leverage
[4] https://www.mckinsey.com/featured-insights/future-of-asia/a-wake-up-call-to-tap-into-digital-wealth#/
[5] https://rpc.cfainstitute.org/research/reports/2025/investment-perspective-tokenization
[6] https://www.mckinsey.com/industries/financial-services/our-insights/asia-pacifics-family-office-boom-opportunity-knocks
[7] https://www.accenture.com/content/dam/accenture/final/accenture-com/document-2/Accenture-The-future-of-Asia-wealth-management-2024.pdf
[8][8] Hong Kong Monetary Authority – Enforcement collaboration between HKMA and SFC – SFC reprimands and fines Hang Seng Bank Limited HK$66.4 million for misconduct in selling practices of investment products
[9] MAS Imposes Civil Penalty of $2.4 Million on JPMorgan Chase Bank, N.A. for Misconduct by its Relationship Managers
[10] https://asic.gov.au/about-asic/news-centre/speeches/financial-advice-in-a-changing-world/
[11] https://rpc.cfainstitute.org/sites/default/files/-/media/documents/article/position-paper/sales-inducements-in-asia-pacific.pdf