Private wealth management ( PWM ) client confidence in Hong Kong as a preferred wealth management centre has reached its highest level in three years, according to a recent report.

Industry optimism has soared over the past year, with all member firms ( 100% ) expressing optimism about the Hong Kong PWM market over the next five years, up from 76% in 2024, despite ongoing concerns about geopolitical instability and macroeconomic uncertainty, which remain the top concerns for the private wealth management industry, finds the Hong Kong Private Wealth Management Report, co-published by the Private Wealth Management Association ( PWMA ) and KPMG China.

Client sentiment continued to strengthen in 2025, the report notes, with 44% of PWM firms reporting that clients now prefer Hong Kong over other wealth management centres.

Additionally, client demand for new accounts and assets to be booked in Hong Kong nearly doubled, the report points out, with 59% of firms reporting increased demand, compared with 34% last year.

Hong Kong’s established role as a gateway to the Chinese mainland, along with ongoing investment in financial infrastructure, continue to reinforce its position as a premier wealth management hub.

The city’s resilience in the face of global economic headwinds and its ability to adapt to changing client needs, the report also highlights, are key reasons for positive client sentiment.

Allocations to alternatives rise

Allocations to alternative assets, the report highlights, are expected to rise in the next three to five years. Currently, 44% of client portfolios allocate less than 5% to alternatives, but one in three firms expects this to more than double ( between 11–15% ) by 2030.

As client interest grows, it will be important for PWM firms and asset managers, the report suggests, to work more closely together on joint training for relationship managers and structured client education programmes, while co-creation of products was also identified as a future area of focus.

Digital assets go mainstream

Artificial intelligence and digitalization continued to rank as the top investment theme for clients in 2025 – highlighting both a growing interest in technology sectors as a source of return, and rising expectations for its integration into wealth management services.

A progressive approach to digital assets, the report urges, is increasingly important for Hong Kong’s standing as a leading wealth management centre. PWM firms are moving beyond “wait and see” with the number of firms remaining on the sidelines regarding digital assets falling this year.

Notably, 52% of firms now say they are either already investing in, or planning to invest in, virtual asset trading platforms, custody or product services in the next two to three years – double the figure from 2024.

Driving forces behind growth

Looking forward, expanding wealth in the Chinese mainland continues to present significant opportunities to the industry. As the Chinese mainland remains the largest source of Hong Kong-based assets under management ( AUM ), accounting for 57% of the total today, this percentage, the report states, is projected to rise to 63% over the next five years.

Hong Kong’s well-developed financial services ecosystem and robust regulatory environment, the report notes, will remain key factors in attracting mainland clients seeking international diversification and sophisticated wealth solutions.

Family offices and next-generation clients are among the opportunity set that continue to fuel optimism, while digital innovation and mid-market opportunities are broadening the growth horizon.

Next-generation and US$5 million to US$10 million clients, the report shares, represent significant growth opportunities. PWM firms are increasingly recognizing the need to refine industry practices to better align with the expectations of next-generation clients.

Clients in the lower high-net-wealth ( HNW ) segment often demand more personalized and proactive engagement than is typically offered by retail banking, but may not yet qualify for the full suite of bespoke services available to clients in higher HNW and ultra-HNW wealth bands.

Firms are responding with a range of strategies, the report details, including enhanced service models through more personalized engagement ( 29% ), investment in digital innovation ( 23% ) and competitive pricing and broader product suites ( 19% ).

Firms are continuing to progress in their artificial intelligence ( AI ) journey at varying speeds, but progress remains measured, with no significant year-on-year changes. Nearly half of firms ( 47% ) report making moderate progress, implementing AI in some areas of their business – virtually unchanged from 2024.

“We are thrilled to see Hong Kong firmly back on its growth trajectory,” says Amy Lo, Chairman, PWMA executive committee chair. “The dedication and collaboration between the private and public sectors over the past years – through both policy support initiative and market outreach efforts – are now paying off.

“This is evident in the 15% increase in AUM within the private wealth management sector, which has reached HK$10.4 trillion ( US$1.34 trillion ), fuelled by an impressive 13% net fund inflow for the year.”