Financial advice is a key factor in achieving higher levels of wealth, with 76% of financially abundant respondents across Hong Kong and Singapore saying that working with financial advisers has made them wealthier, according to a St James’s Place Asia (SJP Asia) study.
The study, titled Advice at Every Stage of the Journey, looks at 2,000 Hongkongers and Singaporeans, categorised across five different levels of wealth – Financial Stability (ST), Financial Security (SE), Financial Flexibility (FL), Financial Freedom (FR) and Financial Abundance (AB) – and their perceptions around financial advice amid economic headwinds and the emergence of wealthtech solutions and robo-advisory platforms.
It revealed that those at higher levels of wealth are more likely to attribute their success to financial advice and speak from personal experience.
Financially abundant respondents are far more likely to engage with financial advisers than those that are financially stable (71% vs 32%). Respondents that fall within the AB group are also most likely to make better decisions as a result of financial advice (76% vs 37%) and to advocate for earlier and greater engagement with financial advisers (73% vs 36%).
Overall, almost six in 10 (59%) of respondents rate their personal financial management needs as complex, highlighting the need to bridge the education and experience gap among less wealthy cohorts.
Unsurprisingly, 82% across the board are worried about the rising cost of living with respondents who are financially stable expressing greater concern than those who are financially abundant (87% vs 71%). In response to ongoing economic uncertainty, 50% of respondents in Hong Kong intend to change their financial plans to take advantage of potential opportunities (43% for Singapore) and 29% express that they intend to adopt a more conservative approach to financial planning (47% for Singapore).
The survey also explores what Hongkongers and Singaporeans prioritise in a financial adviser and barriers to accessing advice. Personal connection and familiarity play a significant role in accessing financial advice. For example, 67% of respondents say face-to-face interaction is important, and most (80%) prefer advisers who share their native language, national origin and background, potentially limiting their options in receiving more comprehensive, well-rounded and effective financial guidance.
Respondents also listed financial advisers as the second most likely partners (81%) in honest discussions about their financial situations, after family (89%).
Younger Hongkongers and Singaporeans are keen to get their foot in the door early with financial advisers, boding well for the future of the industry. 46% of Hongkongers and Singaporeans aged 27- 39 have consulted a financial adviser, compared to 31% of those aged 50-69, and the overall average of 40%.
Moreover, 93% of respondents aged 27-39 in Hong Kong and Singapore have also expressed that the financial advice they received was useful as compared to 81% of those aged 50-69. When asked the top three areas they would need greater financial advice and knowledge in, younger respondents have expressed the following: investments (92%), retirement planning (83%) and property and mortgage (81%).
Need for more education
Oliver Wickham, Asia partnership director at SJP, said: “Having a robust plan in place amid ongoing economic pressures can help navigate any unexpected financial challenges. While our study shows that those who have achieved more success in terms of wealth typically attribute it to financial advice, individuals who are not as financially abundant seem to be more hesitant in tackling their concerns with a professional. This underscores the need for more education especially around the benefits of timely and meaningful financial advice for all generations and wealth levels.
“Cultivating a financial mindset at an early age is a powerful investment in the future. Embracing financial advisers and planning allows younger generations to gain a head start, enabling them to navigate the complexities of personal finance with confidence and set themselves on a path towards lifelong financial well-being.
“While it is not uncommon to prefer working with advisers that share a similar background, the priority should be finding an adviser with the right qualifications, expertise and ability that can understand and address your specific financial needs.
“In an increasingly globalised world, our financial decisions often involve international markets and cross-cultural considerations and having diversity in financial advice can offer a broader global perspective and help address complexities in international investments, taxation and regulations.”