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Financial insecurity rises in Hong Kong and Singapore

The pandemic has forced Hong Kongers and Singaporeans to face up to savings shortfalls.
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The covid pandemic has forced people in Hong Kong and Singapore to reassess their relationship with money and their saving habits, reports Christian Angeloni for FSA‘s sister publication, International Adviser.

St James’s Place Wealth Management Asia surveyed over 2,000 people in Hong Kong and Singapore and found almost half of people (45%) in the two regions are not comfortable with what they have managed to set aside for retirement.

Around 51% have increased the sum they save every month, but many said that high costs of living (44%) and a lack of discipline with money (35%) are preventing them from saving more.

Worryingly, over half (54%) claim to not have enough in their retirement pots to fund their lifestyle once they stop working.

Hong Kongers especially believe they are going to have to delay their retirement, with 48% claiming that their ideal retirement at the moment would be between ages 60-69, marking a significant increase from the 50-59 range of 2020.

With covid changing people’s expectations of work and financial stability, most people in Hong Kong and Singapore (76%) have now made finding additional income streams a top priority.

Oliver Wickham, head of business at SJP Hong Kong and Shanghai, said: “The impact of the global pandemic on exacerbating financial issues cannot be ignored. More Hong Kongers today are struggling in meeting their retirement goals and are borrowing from their future to pay for their living costs now. Whilst this may satisfy their immediate needs it is not a sustainable solution.”

Spotlight on ESG

According to SJP Asia, 38% of respondents wanted to increase diversification in their portfolios, while 32% decreased their exposure to risk.

On a positive note, the pandemic has increased general awareness of ESG issues, as 65% claimed it as one of the reasons to turn to sustainable and responsible investments.

Gary Harvey, chief executive of SJP Singapore, said: “With investors generally understanding the need to be more cautious and diversified thanks to covid-19, there is an opportunity for many to adopt a more traditional investment approach that prioritises long-term fundamentals.

“An equally important part of this will be how they approach ESG issues and invest responsibly, which has grown in prominence over the past year.”

Rise of the adviser

Financial advisers in the region are increasingly becoming one of the main sources (39%) for information followed by friends (38%). Yet, most people (63%) rely on their family when it comes to financial matters.

Less than half (47%) are currently engaging with a financial adviser, but 72% believe there needs to be a greater focus on advice.

Wickham said: “There has never been a more imminent need for well-grounded, trusted and credible financial advice, given the uncertainty in the world.

“Investors in the new world of wealth will face many challenges, but they will need to stay the course on the road to success – it is important to exercise robust financial planning to realise the potential of a long-term wealth strategy.”

Harvey added: “With more investors seeking out safety, the need for solid financial advice grounded in experience is greater than ever. There are many new challenges for investors in the new world of wealth, but the guiding principles for success are still the same.

“Investors must be prudent and undertake robust financial planning to understand what gaps they have in their long-term wealth strategy.”

Part of the Mark Allen Group.