Rising middle class pushes wealth management potential in Vietnam

According to insight by McKinsey, the personal financial assets (PFA) market of Vietnam is projected to reach $600 billion by 2027, growing at a rate of 11% per year from a baseline of $360 billion as of the end of 2022.
Director of AFA Capital Nguyen Minh Tuan estimated that the PFA market could reach thousands of billions of U.S. dollars, if gold and real estate assets were included.
Knight Frank’s Wealth Report from this year predicted that the number of ultra-high-net-worth individuals (UHNWIs) in Vietnam with net assets of $30 billion or more will grow to 978 in 2028, meaning an increase of around 30% in the next five years – the fifth fastest growth rate in the Asia-Pacific region, after India (50.1%), China (47%), Turkey (42.9%) and Malaysia (34.6%).
The middle class in Vietnam is expected to account for 26% of the country’s population by 2026, up from 13% in 2023, according to the report by the Ministry of Labor, Invalids and Social Affairs.
The rapid increase of the affluent and middle class generates tremendous opportunities for wealth management services.
In Vietnam, wealth management services providers include commercial banks, securities companies, insurance companies and fintechs, of which banks dominate because of their established and extensive network and diverse products.
However, wealth management services are still in their nascent stages. A large number of individuals are still investing following a crowd psychology, such as buying gold, property or securities, rather than working with wealth management services providers.
According to financial and banking expert Le Xuan Nghia, wealth management should be used from an early stage, first by saving, followed by accumulating and then investing.
Although the rate of people using wealth management services is low, the market potential is huge because Vietnamese individual investors tend to like investing and have a high tolerance to risk taking.With a population of 100 million people, the wealth management market of Vietnam can top in Southeast Asia in the next decade, Nghia believes.
Currently, most individual investors lack knowledge about personal financial planning – a reason why many lose money and get scammed when investing on their own.
A survey by Vietnam Financial Consultants Association in Hanoi found that 80% of citizens in the capital city can not accurately identify what individual finance is.
Nghia estimated that Vietnamese individuals participating in financial investments currently account for around 7-8% of the country’s population, compared to the rates of 40-80% in many other countries.
Despite its huge potential, the wealth management market in Vietnam remains sluggish due to a lack of a synchronised legal measures, lack of trust and lack of a diversity of products, according to Nghia.
It is critical for wealth management services providers to be professional and offer tailored financial advisory solutions to capitalise on the huge wealth management opportunities in Vietnam. The sector also needs a framework in which to operate in order to grow, for example, policies to encourage individual investors to participate in open-ended funds.
According to Tuan, the number of individuals with assets of VND1-5 trillion will grow exponentially in Vietnam.
Economist Can Van Luc said that individual finance education should be popularised, even at high school levels.

(function(d,s,id){var js,fjs=d.getElementsByTagName(s)(0);if(d.getElementById(id))return;js=d.createElement(s);js.id=id;js.src=”