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HK’s investors lack confidence in their managers

A small proportion of investors in the SAR believe that their investment management firms are well prepared to manage their portfolios through a financial crisis.

Only less than a quarter of investors in Hong Kong believe that their investment management firms are well prepared to manage their portfolio through a financial crisis, according to a survey conducted by the CFA Institute.

Source: CFA Institute. Investment firms include asset managers, wealth managers and insurance companies.

“The figures in Hong Kong could be affected by the ongoing uncertainty of the China-US relationship, and the instability of the social and economic environment,” Nick Pollard, managing director for Asia-Pacific at the CFA Institute, told FSA.

The Hong Kong figures are in stark contrast with Asia-Pacific and globally, where 46% and 49% of investors are confident that their managers can navigate their investments during a crisis, respectively.

The survey was conducted between October and November, even before the coronavirus pandemic started in China, according to the survey. It included 3,525 retail investors and 921 institutional investors globally. In Hong Kong, 100 retail investors and 25 institutions participated.

A recent State Street statement also shows that 88% of institutional investors in Asia-Pacific are confident that their asset managers are able to navigate the pandemic. Only 15% of them feel their managers have underestimated the impact and severity of the crisis.

“It appears that Asian investors are more confident about meeting their investment objectives [compared with global peers], largely because some countries in the region have contained the impact of the virus and the pandemic is at a late stage compared with other parts of the world,” Ian Martin, global head of asset owner segment at State Street, said in the survey.


Separately, survey findings also show that investors in Hong Kong prefer face-to-face interaction with their advisers than using robo-advisors. According to the survey, 59% of investors in the SAR and 61% in Asia-Pacific trust investment advice from humans over robo-advisors, compared with 73% globally.

“It is likely that investors still value the actual interactions with human financial advisers over robo-advisers. Robo-advisers may have added options for human interaction, but it may not be able to replace the human advisers for their accountability in advisory relationships yet,” Pollard said.

“Also, wealthy individuals often prefer face-to-face interaction and prefer people they can count on,” Pollard added.

However, robo-advisory firms have slowly gained traction in the region. For example, Kristal AI, which has operations in Hong Kong and Singapore, now has around 20,000 users. In terms of AUM, assets have grown to at least $130m from $25m in January last year.

Another key finding in the report shows that fees, as well as investment performance, continue to be high priorities for investors in Hong Kong.

Source: CFA Institute.


Part of the Mark Allen Group.