Half of Hong Kongers and Singaporeans have no financial plan

A new study from St. James’s Place Wealth Management Asia reveals the impact of the COVID-19 pandemic on attitudes towards wealth management in Hong Kong and Singapore.

Released yesterday (November 18), the “Money Relationship Monitor 2021” report revealed that nearly half (47%) of Hong Kongers and Singaporeans do not have a financial plan and more than a third (36%) do not. not comfortable with the current amount of their savings.

Three in five (61%) worry about the high cost of living in the future. This is of particular concern as many central banks continue to assess whether inflationary pressures are a transient phenomenon due to the COVID-19 pandemic.

After an extended period of life with COVID-19, there are still significant populations who are not financially, mentally and emotionally prepared to deal with the pandemic in the long term. ”

While rising business costs (including planned tax hikes, rising energy and raw material prices abroad) push up basic prices, only two in five (41% ) say they factor inflation into their financial plans and its impact on their savings.

These concerns have also manifested themselves in the investment habits of Hong Kongers and Singaporeans. Cash was the most disappointing asset class (42% were indifferent / disappointed with its performance) with one of the most popular stocks (49% would allocate more) – the only asset class that can effectively hedge against inflation.

Gary Harvey, CEO of SJP Singapore, said: “After an extended period of life with COVID-19, there are still significant populations who are not financially, mentally and emotionally prepared to deal with the long-term pandemic, with its impact extending far into their future well-being. The higher cost of living and inflationary pressures are also adding to the complexity for many of managing their finances well after the pandemic. More financial education is needed to address this wealth imbalance and ensure that no one is left behind. “

The majority (79%) of Hong Kongers and Singaporeans are likely to seek financial advice before making any financial decisions, as the COVID-19 pandemic has significantly made more than two-thirds (68%) more careful with their money.

While family and friends remain the primary sources of financial advice, many are also turning more and more to professionals. Almost two in five (39%) would speak to their financial advisor first, with almost half (47%) believing that they would have had a better return on their investments in the past five years if they had hired a Financial Advisor.

Honesty is still the most important consideration for almost half (49%) of those surveyed when hiring financial advisers, although fee considerations (30%, up from 20% in 2020) also have increase. Conversely, the main reasons some may not want to hire a financial advisor is that they are convinced that they can manage their own investments (55%, main concern in Singapore) and that the fees are too high ( 55%, main concern in Hong Kong).

More than half (54%) have also not discussed their retirement plans with their families, but the COVID-19 pandemic has helped raise awareness slightly of the need for protection. 86% of Hong Kongers and Singaporeans have now taken out life insurance and 27% have made a will.

Top areas to deal with with financial advice include investing (87%) and retirement planning (73%). The majority of those who hired financial advisers found it useful (88%).

Oliver Wickham, CEO, SJP Hong Kong and Shanghai, said: “The trend of more and more investors seeking qualified professional advice in managing their money is encouraging. The wealth management industry has done a lot to help individuals plan and stabilize their portfolios in the face of pandemic and economic volatility and it is reassuring to see that sound financial advice is highly valued by people who want to protect their future. .

Building trust and helping clients understand their concerns about fees, investments and financial planning is very important. While there is no one-size-fits-all approach when it comes to building investment portfolios, it is imperative that we continue to adopt practices that add value and help individuals achieve their goals. while collectively raising industry standards. “

Louis R. Hancock