Private banks in Hong Kong still slow in utilising alternative opportunities

Alternative investments are becoming an increasingly important part of wealth clients' portfolios as Hong Kong strengthens its position as a global wealth hub, yet private banks have been slow to fully capitalise on the opportunity. According to the Hong Kong Private Wealth Management Report 2026, published by the Private Wealth Management Association and KPMG China, alternatives rank as the second most prominent investment theme among clients. None of the asset managers and fund houses surveyed believe private banks are making full use of this space. The report points to scope for closer cooperation between product providers and private banks in developing suitable offerings, educating clients and integrating alternatives into portfolio strategies.

A similar gap is emerging in digital assets. Although the range of available products is expanding, nearly all surveyed firms said allocations still account for less than 5% of their Hong Kong assets under management. The report says greater client education, more robust portfolio advice, liquidity planning and governance frameworks will be needed. Tokenisation could eventually broaden access to private and real assets through wealth advisers, but its wider application depends on progress in secondary-market liquidity, interoperability between platforms and consistent valuation practices.

The next generation of wealth holders has become a priority, with 91% of surveyed firms saying they have stepped up their focus on this group. Hong Kong Financial Secretary Paul Chan described these clients as younger, often still running companies, and in some cases with wealth still tied up in private businesses, adding that they understand risk and venture and private markets well. However, only 58% of firms said they could recruit sufficient qualified professionals, and client information at most institutions remains fragmented or siloed. The report notes that serving this group requires connecting information across relationships, entities, portfolios and life stages, and bringing in specialists for succession, governance, philanthropy and mobility questions.

Hong Kong's wealth management industry continued to expand in 2025, with assets under management rising 24% year-on-year to more than HK$12.9 trillion ($1.6 trillion), the highest level in a decade. Growth was driven largely by net inflows, which climbed 79% to HK$686 billion. Demand for Hong Kong as a booking centre also strengthened, with 77% of surveyed firms reporting increased enquiries, compared with 59% a year earlier. Mainland China is expected to remain the largest source of assets, while Southeast Asia, Europe and the Middle East are emerging as potential expansion markets. Despite geopolitical uncertainties, 94% of surveyed firms expressed moderate or strong optimism about Hong Kong's position as a private wealth management centre over the next five years.