Hong Kong & Singapore Not Immune To Financial Insecurity - Survey

Friends Provident International have released the findings of its recent survey on sentiments towards savings and investment, which drew responses from over 1,000 affluent and aspiring affluent investors across Singapore and Hong Kong and unearthed interesting findings on their sentiments towards investments and savings.

66% of respondents from Singapore indicated that they do not feel financially secure or financially savvy.

Chris Gill, General Manager, Southeast Asia, Friends Provident International said, “As Singapore continues to emerge as a reputable wealth management hub in Asia, it has become one of the most expensive places to live. Therefore, it is perhaps unsurprising that only a minority of the affluent respondents are feeling financially secure especially given the number of the competing financial priorities.”

The survey once again highlighted that respondents ranked saving for retirement as their top savings priority (72%), ahead of saving for rainy days (60%) and their children’s education (40%), which came in second and third respectively.

Singapore’s well-off revealed that their ideal retirement nest egg was estimated at an average amount of S$1.38 million, with respondents choosing to seek information from varied sources, 55% of respondents seek for professional financial advice before investing.

However, one in four respondents simply guessed the figure for their retirement needs while another 13% derived it from the media. 80% of respondents still want to do more outside of their current CPF savings for their retirement plan while 59% of respondents felt they were not saving enough for their retirement even when factoring in their non-CPF savings.

Mr Gill said, “It would be a sensible course of action to place retirement planning at the forefront and ensure their investments are well protected by seeking professional advice. However, it is alarming considering that 25% of respondents are just guessing the funding they need for retirement.

Our view is that there is a tendency to underestimate the amount needed for retirement even among the well-off. Aside from the high costs of living, longer life expectancy and increasing costs in medical bills, the impact of inflation is another important aspect for consideration.

Decisions made now will ultimately impact how well one is prepared for retirement in future, hence it is important to speak to your professional financial adviser to gain a better understanding of your genuine financial planning needs and how you could achieve these financial goals.”

A similar result was drawn from Hong Kong respondents. 64% of Hong Kong respondents believing they were neither financial secure nor financial savvy (57%). Only 18% of Hong Kong respondents expressed confidence towards saving enough for retirement, when factoring in their MPF (the equivalent of CPF) savings.

This is a much lower figure compared to the 41% expressed by Singapore respondents. The average retirement goal of Hong Kong respondents stood at approximately S$1.65m.

In terms of investment strategy, Hong Kong respondents had a higher risk appetite compared to Singapore respondents. 26% of Hong Kong respondents choose to invest in high risk and high return products compared to 11% in Singapore.

Across the two markets, 54% of Hong Kong respondents and 45% of Singapore respondents pursued a balanced investment strategy with a mix of potentially high risk and low risk products. And when it came to consulting a financial advisor before investing, only 49% of Hong Kong respondents felt it was necessary versus 55% of Singapore respondents who did so.

Nonetheless, one commonality remains in that a balanced investment strategy as advocated by financial advisors is preferred by individuals in both markets, and is generally taken to reap better (and safer) returns in the long run.

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