Fifty-six percent of Hong Kong residents' investment goal is retirement, but their decisions focus on short-term factors, a survey by Endowus showed.
The leading Asian independent wealth advisor released the Endowus Wealth Insights Report in April, based on a YouGov survey of 800 affluent individuals – the top 40 percent of households by income – in Hong Kong and Singapore. The study examined the investment behaviors and preferences of those in Hong Kong with a monthly income exceeding HK$42,000 and those in Singapore earning over SG$8,000 (HK$49,062.84).
The results revealed that while 57 percent of Hong Kong investors prioritize alternative income and 56 percent prioritize retirement as their main investment goals, only 31 percent make decisions based on these objectives. Instead, they focus on short-term performance indicators: 58 percent on projected returns, 51 percent on fees, 48 percent on market trends, and 45 percent on risk levels. This short-sighted mindset could hinder effective wealth accumulation, according to Endowus.
Singaporean investors exhibit a more disciplined investment strategy – 61 percent of them prioritize ensuring sufficient retirement funds, followed by 49 percent lean toward creating alternative income.
Forty-two percent of Singaporean respondents, compared to only 31 percent in Hong Kong, stated that the key to investing lies in “suitability to financial goals”, reflecting a stronger awareness of long-term planning.
Twenty-four percent of Hong Kong investors adjust their portfolios at least once a month. Overall, among investors with retirement planning as their goal, 25 percent in both Hong Kong and Singapore make adjustments at least monthly, with younger investors aged 18 to 44 showing even more frequent adjustments.
Frequent trading increases costs and erodes returns, yet 29 percent of Hong Kong investors are unclear about the fee structures. The report indicates that this lack of awareness highlights significant room for improvement in the relationship between financial advisors and their clients.
As many as 82 percent of Hong Kong investors express satisfaction with their financial advisors, yet fewer than 40 percent believe their advisors understand their short- and long-term goals.
Only 22 percent strongly agree that their advisors actively help them achieve their financial objectives, indicating a demand in the market for investment goal-oriented financial advice.
ANSON LUK
