Expats and the wealthy in Hong Kong are looking for financial advice online rather than turn to their banks or financial advisers.
Strict advice rules have knocked the city’s investment market for six as regulators hauled in the reins on investments considered to carry a high risk, mainly investment linked assurance policies (ILAPs).
As a result, wealthy investors who would have previously sought advice from banks are now looking to their peers – with only just over a quarter (27%) telling a Friends Provident International survey that they would go to a financial adviser for help.
However, 45% admitted they would look online instead.
The study also revealed that Hong Kong investors were more likely to seek professional finance advice later in life.
No respect for banks
Many of Hong Kong’s wealthy male investors ask their IFAs to rubber-stamp their investment decisions and pass taking direct advice off as ‘something for women,”
The survey also looked at investment patterns in Singapore and the United Arab Emirates.
Only 30% of wealthy expats and investors confirmed they would take advice from an IFA.
Even less would go to a bank (22%) or stockbroker (14%), while just over one-in-10 would make their own investment decisions.
The most popular investment in the UAE is property (63%) – while two-thirds of investors are looking to diversify into gold. This compares with around 55% in Singapore and Hong Kong.
Hong Kong’s wealthy were more likely to put money into stocks and shares (69%).
Expats and the wealthy in the east were less taken with property, with only 26% in Hong Kong and 18% in Singapore favouring bricks and mortar.
Saving for education
One saving priority all three regions had in common was education.
Practically everyone with children wanted to put money aside for their education, particularly in Singapore, where many start to save for school fees before a child is born and three-quarters investing to pay university fees before a child reaches five years old.
Friends Provident International’s managing director James Tan confirmed education was important to expats and the wealthy in each region.
“Perhaps this survey shows that financial advisers should be looking at carving a niche opportunity out of investing for education as this seems to be the major priority for the wealthy,” he said.
“Many of these families will send children overseas to study, so investments that hedge against currency risks could be a good area to maximise potential.”