Gold Singles beat Platinum Singles in Wealth Management, finds Fidelity HK Singles Wealth Management Survey

HONG KONG, 28 October 2013 – Fidelity Worldwide Investment (Fidelity) today announced the release of the Fidelity Survey on Wealth Management by Singles. As the latest in Fidelity’s Investor Education Series, the study aims to analyse both the investment strategy and the marital aspirations of Hong Kong men and women who are not married and explore areas of opportunity where Fidelity can help them to better plan their investments or manage their wealth.

 

In late July, the online survey interviewed 557 singles aged 30 to 49 with a monthly income of HK$12,000 or more. Within this survey group, 61% have university degrees and an average personal monthly income of HK$25,926.

 

The survey divided respondents into four groups based on job hierarchy: Platinum, Gold, Silver and Bronze. The Platinum-grade singles consist of top management and company decision-makers earning around HK$43,150 per month; Gold-grade singles are middle management and department heads; Silver-grade singles are mid-level employees and supervisors and Bronze-grade singles are general staff.

 

Investment behaviour and partner choice: Platinum may not be the optimal choice

 

The Platinum category might seem to be the obvious partner of choice, taking monthly income, job hierarchy and education levels into account, but the survey results show the Gold tier is better in investment, which might be the preferable choice. Looking back at the investment performance during the past 12 months, 45% of Platinum singles experienced investment losses – considerably higher than 20% for the Gold tier. At the same time, 75% of the Platinum singles underperformed the Hang Seng Index (HSI), which rose by 10% in the corresponding period.

 

Although 59% of the surveyed Platinum-grade singles attributed their losses to insensitivity to market fluctuations and insufficient portfolio monitoring, they seem very confident about their investment skills with 67% of them relying only on their own judgement when making investment decisions, and nearly 40% believing they are either ‘knowledgeable’ or ‘very knowledgeable’ about investment. Overall, the Bronze-grade female singles have the least confidence in their own abilities: only 2% feel they are ‘very knowledgeable’ or ‘knowledgeable’ about investment.

 

Conversely, the Gold-grade singles have better investment performance than all other groups. 45% of the Gold-grade singles have gained returns of more than 10% during the past year, and much of that success seems to stem from readiness to seek information and advice from third parties. 55% of them look up information online, while 40% of them seek advice from friends/family and 31% consult financial advisors. The Gold-grade singles also tend to be more aggressive in investment, although not overconfident: 69% of them are willing to accept losses on principal of 15-20%, and 54% consider themselves speculative or aggressive investors.

 

Bruno Lee, Regional Head of Retail, Asia ex-Japan, Fidelity Worldwide Investment, said, “Platinum-grade singles that hold senior job titles and stand out at work are generally too busy to follow the market, which has been increasingly volatile. Meanwhile, sensitivity to market fluctuations has proven extremely important to investors. We suggest that Platinum-grade singles seek advice on financial planning from a third party or hire professional financial advisors so they can concentrate on their work while increasing their chances to gain worthy returns from their investments.”

 

Huge gap remains between reality and ideal retirement savings for Platinum-grade singles, although they claim to be able to have a comfortable retirement life

 

As for their own longer-term perspective on retirement planning and provision, the singles surveyed want a comfortable retirement, but are not confident or well-informed enough to achieve it. The majority of the singles, regardless of their income band, expect to retire before 65-years-old; however, less than half of them (37%) are confident about having a comfortable retirement. The Platinum group is especially conspicuous in this, with 72% of them expecting to retire by 65.The Bronze-grade singles are especially pessimistic, with only 25% of them confident of a good retirement, while confidence levels are 35% and 45% for Silver and Gold tiers respectively. The Platinum-grade singles are the most optimistic, with 52% confident that they can have comfortable lives after retirement.

 

On average, the Platinum-grade singles expect to retire at 58-years-old.  But with the average life expectancy of Hong Kong people reaching 80.5 and maintaining the current living standard as a goal, they have the largest gap to fill among all groups - HK$4.8 million - between the amount required for retirement and the expected accumulated amount. This indicates that the group lacks sufficient retirement planning. The Silver-grade singles, only second to the Platinum tier, face a gap of HK$2.2 million, while the Gold-grade singles and Bronze-grade singles face a shortfall of HK$1.9 million and HK$1.7 million, respectively. In addition, saving is the second most common way to prepare for retirement after MPF.

 

More optimistic in love, more confident in investment?

 

The survey also reveals a definite correlation between readiness for marriage and investment behaviour. Those who are open to marriage tend to be more aggressive and confident in investment, with 43% thinking they are an aggressive and speculative investor, higher than those who are not sure about marriage (31%) and those who have given up getting married (26%). Meanwhile, those who are open to marriage show the highest confidence in their investment knowledge, with 28% saying they are knowledgeable or very knowledgeable about investment. For those who are not sure whether to get married, the percentage is 20%, while it is 14% for those who will not marry. Singles open to marriage registered a better performance in the past 12 months, with 62% of them gaining positive returns, compared with 58% for those who are not sure about marriage or 49% for those who will not marry. 

 

The singles who are not sure whether they would get married turned out to be the keenest investors. On average they have more liquid assets than other groups - HK$940,000 - and 76% of these assets have been put into investment. This percentage is much higher than that of those who are open to marriage (45%) and those who will not marry (46%).

 

Bruno Lee said, “In general, Hong Kong singles must have confidence towards investment and wealth management. Yet at the same time, they need to consider the whole life perspective, partner choice and their aspiration for organizing a family when making investment decisions, and also seek professional advice to achieve a balance. In addition, Platinum-grade singles’ high income level is no substitute for long-term planning. Investors may seek professional advice to generate better investment returns for a comfortable retirement life if they are too preoccupied with their work. In short, the singles must take responsibility for their retirement life by adopting the correct investment attitude and engage in active planning.”

 

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About Fidelity Worldwide Investment

Fidelity Worldwide Investment is one of the global leaders in asset management, providing investment products and services to individuals and institutions in the UK, continental Europe, the Middle East and Asia Pacific. Established in 1969, the company has over 6,000 staff in 24 countries and manages or administers client assets of US$305.5 billion. It has over five million customer holdings and manages more than 660 equity, fixed income, property and asset allocation funds. The company’s fund managers receive research from one of the largest proprietary research teams, based in 12 countries around the world. Fidelity Worldwide Investment is an independent asset management company which is privately owned.

Data as at 30 June 2013

 

 

Media Contact:

 

Patricia Chua

Kate Cheung 

Head of Corporate Communications

Manager, Corporate Communications

Tel: +852 2629 2468

Tel: +852 2629 2641

Email: patricia.chua@fil.com

Email: kate.cheung@fil.com