Hong Kong investors take a far more aggressive investment approach (42%) compared with their peers across Asia and the Middle East (34%), according to Avaloq, a global provider of digital banking solutions and wealth management technology.
Avaloq’s research, conducted in February and March 2024 among over 3,000 investors and 300 wealth managers in Asia, the Middle East and Europe, found that 26% of Hong Kong investors had changed their investment strategy in the past year, in line with the Asia average. Of these, almost half (49%) adopted a more aggressive strategy, while 33% opted to invest more capital.
Loyalty to financial advisers is also a defining trait of Hong Kong investors. The majority (74%) have maintained the same adviser for the past five years, citing professionally managed investment risk (84%), quick response times (74%) and clear communication (73%) as critical factors in establishing trust.
However, communication remains a key area for improvement, with over two-thirds (68%) of investors expressing a desire for quicker adviser responses to market changes, and 67% expecting their adviser to reply within 24 hours.
Despite this loyalty, portfolio performance (39%), high fees (37%), and a lack of trust (33%) were the leading reasons cited by those considering switching their adviser.
When it comes to the use of technology in wealth management, Hong Kong investors are largely optimistic. Three-quarters (76%) welcome the use of AI for analysing portfolio performance, while 72% are open to AI-assisted investment advice. Additionally, 76% are in favour of AI-driven product recommendations based on behavioural patterns or changes in their situation.
Pain points for wealth managers
From the perspective of wealth management professionals, the report reveals significant challenges in delivering personalised services. Nearly half (47%) of wealth managers in Hong Kong identified difficulty in accessing existing client data as a strong or very strong barrier. Furthermore, 67% noted that client data is not seamlessly integrated across all systems, while 64% found the need to work with multiple systems hamper their efficiency.
Onboarding new clients also presents hurdles. Wealth managers in Hong Kong pointed to the manual workload (83%) and internal approval processes (81%) as their top pain points, aligning closely with broader Asia trends. Tasks such as providing KYC information (60%), setting up accounts and structures (52%) and defining risk and investment profiles (52%) were flagged as particularly time-consuming.
To address these challenges, wealth managers in Hong Kong are calling for a range of improvements. Simplified or automated client onboarding (81%), enhanced data visualization (79%), and advanced data analytics (76%) topped their wish lists for major improvements, with automated compliance reporting (65%) also seen as a critical area for progress. Notably, these demands are higher than the averages across both Asia and global markets, reflecting Hong Kong’s forward-looking stance.
Eliza Chang, regional sales director and head for the North Asia market at Avaloq, said: “Given the interest to invest and the general acceptance of AI, wealth managers need to harness technology tools efficiently to provide timely and personalized investment advisory.”
“Automation of manual processes and smart of use of AI would enable relationship managers to develop stronger investment proposals and track portfolios, in a client-centric approach to wealth management.”
