The latest report released by Mercer Oliver Wyman, a global financial services provider, says that China’s finance and wealth management market will grow by a factor of six in the next nine years and the growth of individual assets will generate high demand for wealth management services which are currently lacking in the country. Chief of business development department with the China Banking Regulatory Commission Li Fuan says China’s commercial banks have seen a rapid growth in the financial planning business with annual growth rate of 18% in the past few years. It is estimated that in 2006, the financial planning market will reach US$570 million. According to the report, Chinese people have a high desire to save with a savings rate of over 20%, which is ten times than that of the US. A high savings rate combined with strong economic growth has undoubtedly led to an explosion in total financial assets. Statistics show that Chinese current total financial assets, excluding housing, have reached almost US$3 trillion. At the same time, as affected by Chinese people’s preference for cash, the current size of asset managed by various finance institutions is still very small. However, according to overseas examples, Mercer says that the portion of cash in Chinese individual assets would become lower. This creates an enormous market for wealth management business. In addition, a more relaxed policy and regulation on capital flows will also alter the development of the wealth management business in China. The report estimates China’s finance and investment management market to be of high potential compared with the rest of the world and the Asia-Pacific region. By 2015, the total assets of China’s investment industry will grow from the current US$300 billion to US$2 trillion. Asset types will include major wealth investment tools such as stock funds, pension funds and insurance. Mercer Oliver Wyman now has two offices in Beijing and Shanghai providing risk management consulting services for banking, insurance and securities industries. Director of Mercer Specialty Consulting, the parent of Mercer Oliver Wyman, John Drzik says that risk management is a rising business in China. Currently, Chinese firms place a greater emphasis more on traditional financial management, accident and operational risk instead of strategic risk. It is estimated that China’s risk management consulting market would grow rapidly in the next two to three years in face of changing circumstances and evolving finance market in China. Moreover, as China’s banking and finance sectors become more opened up by the end of this year, competition over wealth management and private banking businesses. Competition is expected to mainly focus on the 20 percent of affluent customers who contribute 80 percent of revenue for banks, says Li Ruoshan, a professor with Fudan University's School of Management. According to a survey by the Social Survey Institute of China, wealth management services are very popular among urbanites in China's big cities of Beijing, Shanghai, Tianjin and Guangzhou, where 74 percent are interested in these services and 41 percent said that they would definitely purchase wealth management products if possible. China News