Being globally mobile influences investment strategy, reveals an investor attitudes report released by Friends Provident International (FPI).
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FPI has released a report highlighting the findings of their fifth edition of the Investor Attitudes survey for Q3 2014 (survey period between 12th September and 23rd September 2014).
The survey drew responses from over 1,000 global expatriates and domestic high net worth investors across Singapore and Hong Kong, unearthing interesting statistics on investors’ sentiments, investments and saving patterns in these regions.
The latest edition of the Investor Attitudes survey takes a closer look at the emerging trend of global mobility and the impacts this increasingly common phenomenon has on the affluent and high net worth individuals (HNWIs). Findings revealed that out of the 1,006 respondents surveyed, 68% of the Hong Kong respondents and 35% of the Singapore respondents are currently living or have lived outside of their home country for at least six months or more in the past five years.
The report revealed that people who are globally mobile have a different view on investment strategies to those who remain in their home country. In particular, these investors have a significantly higher investment appetite across all asset classes, including gold, cash, equities, currency markets, property, bonds and collectables, as compared to those who have not worked abroad in the past five years.
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By GlobalDataIn terms of the financial setup process, globally mobile individuals found the process of setting up their financial plans difficult, with 60% of the respondents expressing that it was complicated. For those with kids, education planning is by far the greatest challenge they face while working abroad.
More than half of the Singapore respondents continue their relationship with their banks (64%), insurance providers (60%) as well as financial advisers (59%). However, respondents expressed that a lack of face-to-face support and tailored advice were among key reasons cited switching provider from their home country to their host country.
In addition, 72% who kept relationships with their financial providers felt that their existing banks had exceeded expectations in providing digital accessibility while another 67% also felt the same about their current financial advisers, showing that ease of access via technology was a key influence in financial planning overseas.
Financial strength and local brand presence also came out as a key concern, with 67% of those who kept relationships with their current banks and 70% of those who stayed with their insurers citing that as the main factor for keeping the relationships.
The Friends Provident International Investor Attitudes Index across the regions indicated that affluent and emerging affluent investors in Singapore and Hong Kong are not certain about the current investment climate.
The Singapore Index scores dropped 2 points to 11 as compared to 13 in Q1 2014 as the general cautious approach towards investment continues throughout the year. Hong Kong has maintained its Index score at 15 from Q1 2014, with a strong performance in property investment.
Mr. John Van Der Wielen, Executive Chairman at FPI said,
"The statistics from our latest survey reconfirms the belief that global mobility is an emerging trend in the region, with more than half of those surveyed actively traveling and living abroad. Singapore and Hong Kong are important financial hubs in Asia, and as such, the investor pool here is increasingly mobile, in addition to being mature and financially savvy.
Interestingly, the negative Asian sentiment we have seen in our past three Investor Attitudes Reports has been a very good indicator to the recent market turmoil. It has hit the lowest score since inception in Singapore and looking at current volatile market condition our respondents were correct in their feelings.
The increasing trend of people working and living abroad has highlighted the concern of whether financial providers are well-equipped to service customers seamlessly from one end of the globe to the other. This expectation is further heightened by the increasing reliance on technology over the years, such as the internet, as a source of information rather than relying on local experts only.
With a significant portion of respondents finding the financial planning process complicated and experiencing a lack of support, this may present opportunities for financial providers, like Friends Provident International, to look into ways to better value-add our customers to help them transit between nations without a hitch, and to maintain our valuable relationships with them."
The latest survey findings show that the importance of insurance has been amplified by those living abroad, with 76% of the globally mobile expressing that they feel insurance is much more important now as a means to preserve their wealth, as compared to 63% for those who have not worked overseas in the past five years.
Out of these 76% of respondents, 44% of them have taken up life insurance, and 34% health insurance, while they are abroad. With the exposure to the benefit of these insurance products high abroad, the purchase decisions are also immediate.
Further, the survey also revealed that only 39% of the Singapore respondents who have lived and worked abroad for more than six months will consider retiring back in their home country, with the others expressing better quality of life and lower cost of living as reasons for choosing to retire in other countries.
The proportion of respondents in Singapore chasing a higher quality of life as a dominant factor behind the choice of location to retire is higher at 58% as compared to the respondents in Hong Kong (47%), with countries such as Australia and Malaysia coming out as popular locations to retire.
Mr. Noel Whittaker, Executive in Residence and Adjunct Professor, QUT Business School said,
"Working abroard exposes you to numerous opportunities, in particular it encourages investors to think outside their local market. Although this can have a positive influence on one’s financial situation, it is still essential to seek financial advice to understand the local market.
The industry knows that no one can consistently and accurately forecast markets – people tend to buy in a boom and sell in a bust market. Investors must diversify their investment portfolios in order to weather unpredictable changes and enjoy long term financial security."
