Indonesia's wealth management prospects brighten over affluence growth

Mass affluent individuals are expected to grow to 1.6 million by 2022.

Wealth managers have significant opportunity to cash in on the anticipated growth in the population of mass affluent and high net worth Indonesians over the next three years, says data and analytics company GlobalData.

Mass affluent individuals, or those holding liquid assets between $50,000 to $1m, recorded an average annual growth rate (AAGR) of 7.3% between 2014 and 2018, rising to 1.3 million in 2018 from only 943,370 four years prior. It is projected to further expand by 26% to 1.6 million in 2022 from only 1.3 million in 2018.

Meanwhile, the number of HNW individuals or those who hold liquid assets of more than $1m, is expected to record an AAGR of 7.7% over the next four years.

In particular, growth will be pronounced in the higher wealth bands, with the number of investors with liquid assets of US$3m to 10m and more than US$10m forecast to grow at AAGRs of 10.1% and 9.3%, respectively.

Growth will mainly be driven by a boon in infrastructure, rising working population, and government’s regulatory reforms aimed at boosting investments, said Shivani Gupta, wealth analysts at Global Data.

“Increasing employment levels and strong predicted retail investment growth will further push the rise of affluent individuals in Indonesia over the next four years,” he added.