Alvin Tan on wealth inflows into Singapore

In Parliament on Wednesday (May 10), Monetary Authority of Singapore (MAS) Board Member Alvin Tan replied to questions from MP Louis Chua and NCMP Leong Mun Wai on wealth inflows and foreign fund inflows through family offices into Singapore. He said MAS does not have comprehensive data on fund inflows through family offices as it does not need this for its role of ensuring macroeconomic and financial stability. However, taking their interest to be in investments made by high-end individual investors, he shared data on the closest available category. This is non-retail individual clients, which includes family offices, clients of external asset managers, private trusts and high net worth individuals. Assets under management (AUM) of foreign non-retail individual clients managed by financial institutions in Singapore rose by about S$470 billion from 2017 to 2021. This made up about 20 per cent of the increase in total AUM by Singapore’s asset management industry for that same period. Mr Tan said the growth of assets from these high-end individual clients has been broadly similar to that of overall AUM - in other words, there has been a much broader pick-up of funds flowing into Singapore’s wealth management industry, but it is not peculiar to high-end individual clients. While there is no breakdown for family offices, those which applied for and were granted tax incentives by MAS managed about S$90 billion worth of assets as at 2021. That was less than two per cent of the S$5.4 trillion in assets managed in Singapore as at 2021. In short, said Mr Tan, the bulk of the increase in AUM in Singapore is attributable to institutional investors. Non-retail individual clients account for a small proportion and family offices even less. As for a breakdown of wealth inflows by source countries, Mr Tan said that as with other major wealth management centres, the most granular breakdown available is by region. The top-sourced foreign region for the increase in Singapore’s AUM for high-end individual investors from 2017 to 2021 was the Asia-Pacific, accounting for slightly over half of AUM sourced from high-end individual investors. It was followed by Europe and then the Americas.  Mr Tan also addressed other questions that Mr Leong had asked. These included how much family offices that have applied for tax incentives have invested in local investments, as well as the impact of the inflow of foreign funds through family offices on Singapore’s official foreign reserves, the private property market and inflation.