According to a new report, he Chinese Luxury Consumer White Paper 2012, Chinese HNWI are now focusing on more fixed income products with lower yields and less risk. These products are typically government bonds, and domestic stable stocks in corporations. This change has occurred not only because of what they have seen happen to people making fast money in the West, but also because they are shifting from generating fast money to slow, safe money.
In an interview with the Vice President of Bank of Beijing, Ferdinand Jonkman told Asia Outbound that Chinese HNWI individuals are now focusing on simpler financial investments that they can understand. ears ago HNWI wanted to make money quickly with high interest rates, Jonkman said. ut when they saw the richest countries go down because of this, they sharpened up. They learned from the West. Now many of them won buy anything they do not understand. Banks must focus on explaining the risk of their products. /p>
Jonkman has said that even his bank is now transforming its bank wealth management products to make them more sound, straightforward and simple. According to him, banks that can offer steady growth of between 4-6 percent will at least keep some of their HNWI clients.
Even conservative financial instruments in bank wealth management and private banking departments are becoming less of a focus for HNWIs. Many HNWI are switching from real estate investments to steady growth in high yield deposits. A source from the People Bank of China, who wanted to remain anonymous, told Asia Outbound many high net worth individuals already made their money when China GDP was booming at 8-10 percent a year. Now they want to maintain it and ensure its growth.
NWI still invest their money in real estate, that is not going to change because Beijing, Guangdong, and Shanghai property market is still expanding, despite what other analysts say about a property bubble. But now some HNWI are becoming weary of this simply because of the fear of a bubble burst. They want to protect their wealth, so now they are looking for banks that can give them the highest interest rate deposits. /p>
Despite what many think, a brief look a many Chinese banks annual report indicates that that many Chinese HNWI are not loyal to any specific bank. They scatter their money through out many Chinese and overseas banks seeking for the highest rates, best services, and to ensure that if one bank goes down, their money is safe in other places. Mitigating risk and finding the highest paid deposits are now many HNWIs new investing prerogatives.
