Increasing numbers of high net-worth mainland Chinese investors are reportedly turning to Hong Kong’s financial institutions to manage their wealth after the Wealth Management Connect (WMC) scheme loosened its criteria back in February, according to specialist publication the Banker.
Upgrades to the Greater Bay Area (GBA) scheme tripled the individual investor quota to 3 million yuan, lowered the participation threshold for GBA residents, diversified the range of wealth management products on offer and allowed more types of financial institutions to join the scheme – including securities firms.
Since the relaxation, the inflow of assets from the mainland has increased – reportedly leading to executives from investment banks UBS and HSBC to call for greater links between Hong Kong and the mainland to support the needs of their private banking clients.
[See more: China’s wealthy turn to Hong Kong instead of Singapore as a financial haven]
A Hong Kong Monetary Authority spokesperson said that local financial institutions were “stepping up investor education to enhance investors’ knowledge of WMC and products and enable them to better capture the cross-boundary wealth management opportunities.” They also noted that southbound investors from the mainland were adopting a risk-averse approach due to “an uncertain market” and said that investors tended to be prioritising risk diversification and wealth preservation.
Peter Kwon of global law firm RPC said that the WMC scheme was set to grow in coming years – describing Hong Kong as playing “the vital role as a super connector in and out of the mainland.”
Initially launched in 2021, the WMC aims to connect capital markets within the GBA. It’s a closed-loop system designed to keep people’s assets within Greater China, in the face of competition from foreign financial havens like Singapore and Switzerland.
