W

hat would you do if you had Rp 1 billion in your savings account? Keeping it in the bank should be your last option, given the world's trembling economy and volatile inflation rates.

 For many wealthy Indonesians and the burgeoning middle class, entrusting their money with wealth management specialists is now the way to go. Many major banks in the country offer this service amid the nation's increasingly robust economy.

 In a recent interview with The Jakarta Post, ANZ Indonesia vice president director and consumer banking head Ajay Mathur said that affluent Indonesians sought higher returns from their investments, and are thus turning their money over to the care of wealth management specialists.  

Wealth management services offer affluent Indonesians various investment options, retail banking, estate planning, legal resources and professional tax consultation. They also extend to insurance, real estate, jewelry and the relatively unexplored field of artworks.

 With a huge population of 260 million, the Indonesian domestic market serves as the backbone of the economy. While neighboring countries trembled as the global economic crisis hit the US and Europe in 2008, Indonesia's economy has been able to maintain an impressive annual growth of 6 percent to date.

A glance around Indonesia's teeming lifestyle emporiums shows that Indonesians are exceedingly bullish on their futures.

 In fact, the 2010 HSBC Affluent Asian Tracker Survey rated the rich and the middle class in Indonesia among the region's most optimistic when it came to investment.

 The study revealed that 63 percent of Indonesian respondents planned to increase their wealth within the next six month; 38 percent planned to read more about investment strategies; and 19 percent said they were interested in consulting financial advisers for their future investments.

A random but important fact: the study found out that the average age of Indonesia's affluent is 39 years old ' the youngest in the region.

An executive was quoted as saying in the study that Indonesians scored lowest in terms of investment diversification compared to the rest of region. This isn't necessarily a bad thing; it simply means that wealth management has great prospects of blossoming in Indonesia, where the emerging affluent are young, curious and ready to invest.

HSBC Indonesia is also making efforts to provide greater awareness of the benefits of wealth management through a series of seminars. The first, to be held on Tuesday, May 28, at XXI Lounge Plaza Senayan, will focus on 'Investment Opportunities Through Wealth Management'.

Changing fortunes

The rise of the Indonesian middle class is a modern day economic fairytale of sorts. Just 15 years ago, amid social and political turmoil, Indonesia went through a severe economic crisis that saw dramatic currency depreciation and public debt. Today, that has all changed for the better, and the country is a sought-after emerging market with a solid and growing middle class.

In fact, 2010 marked the revival of Indonesian economic fortunes, as international bodies such as the World Bank and International Monetary Fund announced that the country's gross domestic product (GDP) per capita reached US$3,000 ' a key indicator for economic progress. The simple logic is that as household income increases, so does disposable income, savings and investments.

Take 'Yon', a restaurant owner, in his early 40s, who is enjoying all the trappings of success derived from hard work and the booming economy.

He has it all, or almost all; cars, house in a Jakarta suburb, vacations at home and abroad, private school for his two children, all bankrolled by income that is nudging that magic Rp 1 billion mark.

He is exploring his investment opportunities and learning what he can do with his savings.

'I'm mulling different investments, how to do it and, for me, it's important that they are relatively secure. Frankly, it's always difficult for me to let go of my reservations about using my money,' he said.

Money talks

According to research by Standard Chartered bank published last year, there are approximately 4 million Indonesians with annual earnings of Rp 240 million'Rp 500 million ($24,500'$51,100). Meanwhile, Swiss-based Credit Suisse's study finds that there are approximately 60,000 Indonesians with a net worth exceeding Rp 9 billion ($921,000).

The study also claims that there are approximately 500 Indonesians with assets of at least Rp 1 trillion ($102 million).

A study by CLSA and Julius Baer Bank revealed that the number of high net worth individuals (HNWI) will triple in Indonesia to nearly 100,000 by 2015, the fastest rise in Asia and, internationally, second only to China and India.

Sure, Indonesia contains a consumer force that drives the economy and triggered significantly increased domestic and foreign investment from 2010 onwards. But affluent Indonesians are also responsible for lifting the country's GDP per capita to reach $3,000 in more ways than one.

Unsurprisingly, major banks are fighting tooth and nail to win the trust of the country's growing middle class.

Their best device? Wealth management and spreading knowledge about how to use it effectively and efficiently for a better life.