Wealth preservation and risk aversion are the main concerns of high net-worth individuals (HNWIs) in the region, according to Lombard Odier’s 2023 Apac HNWIs Study.
“Findings revealed a dichotomy between HNWIs’ intentions and actions across the themes of achieving personal goals, sustainable investing, private assets, and aligning family goals,” according to the wealth manager.
Most of the 460 HNWIs (people with at least $1m of investible assets) in Singapore, Hong Kong, Japan, Thailand, the Philippines, Taiwan, and Australia said their personal goals rank high when approaching their wealth, with 76.1% saying that enjoying and maintaining their current lifestyle is essential.
Amid market volatility, more than half (56.4%) of Apac HNWIs find it essential to protect their family and ensure that they are well taken care of.
However, only a fifth of all respondents agreed that they have structured their assets to achieve their personal goals.
So, for example, regarding sustainable investing, there seems to be more talk than practice among the rich. While 60.9% of respondents said it is essential or aspirational to invest in sustainability, and even more (77%) agreed that incorporating sustainability factors can help deliver superior returns, a mere 18.4% said they “have actively increased or plan to increase the proportion of sustainability investments”.
“Conversations with our clients showed that there is a clear gap between goals and actions. In this volatile market, HNWIs are relooking at their fundamental values that drive their investment needs,” said Francis Liu, CEO, Private Clients Asia at Lombard Odier, in a statement. “Investors are rethinking their approach to risk and asset allocations for diversification and growth.”
In other areas too, there is difference between theory and practice.
For instance, 58.2% of Apac HNWIs respondents said they wanted to invest in private equity, non-listed companies, yet only 31.1% of them have included private assets in their portfolios. Just 26.3% of respondents agreed that they understood how private assets could help them achieve their goals, highlighting the lack of confidence and the need for education on private assets.
Indeed, around 60% of respondents are unsure or do not have an appropriate process involving investment tools to monitor their wealth with respect to their goals.
“The implications of the megatrends that we are seeing today has reverberated across the region. Even as Apac HNWIs have a deep understanding of their own aspirations, there is clearly a gulf between their intent and their actions,” said Vincent Magnenat, Asia regional head and global head of strategic alliances at Lombard Odier.
