How do high net worth (HNW) investors in Singapore invest?
Endowus recently released a report on HNW individuals in Singapore, based on a comprehensive survey on 500 HWN individuals in Singapore and Hong Kong.
HNW individuals are showing a preference towards more self-directed investments, rather than through the traditional bank relationship manager (RM) routes.
This seems to be a preference among a lot of investors generally based on feedback we get from readers.
Let’s explore how HNW investors grow their money.
This article was written by a Financial Horse Contributor.
1. Better investment returns is the top priority
According to Endowus’ HNW Investor Sentiment 2024 report,* Singapore investors revealed that their key priority is better investment returns.
Key concerns for the year ahead:
- Better investment returns
- Keeping up with inflation
- Excessive risk tasking
- Diversification
- High fees
Interestingly, Hong Kong respondents ranked greater portfolio diversification and succession planning as the top concerns.
More than half of respondents in both markets also indicated that they are “optimistic” or “very optimistic” about the 2024 economic outlook, with Singapore investors demonstrating a slightly higher risk appetite (71%) to grow their capital than their Hong Kong counterparts (66%).
*The study was conducted by YouGov Singapore from February to March 2024 and surveyed 492 HNW individuals across Singapore (n=266) and Hong Kong (n=226). Respondents were qualified as HNW based on meeting at least one of the following criteria: (1) Annual income of at least SGD 300k and above, (2) Personal investable assets of SGD 2 million or more, (3) Financial assets of SGD 1 million or more. 58% of total respondents (n=285) are verified accredited or professional investors in Singapore and Hong Kong respectively.
2. Desire for greater access to private market strategies and hedge funds
A good number of investors are interested to increase their investments in the public markets.
At the same time, investors across the board have increasing appetite in financial alternatives.
Investors are also showing a preference for self-directed investments, rather than the traditional reliance on private banking RMs.
A majority (71%) of Singapore respondents indicate that they manage their investment portfolios (across public and private markets) entirely or mostly on their own, contrasting with the majority (60%) in Hong Kong who manage their investments mostly with the help of a relationship manager or financial advisor.
3. Optimism about 2024 economic outlook
More than half of respondents in both markets also indicated that they are “optimistic” or “very optimistic” about the 2024 economic outlook.
Singapore investors demonstrating a slightly higher risk appetite (71%) to grow their capital than their Hong Kong counterparts (66%).
4. Sources of financial advice
HNW investors in both markets emphasise the importance of trusted wealth managers who can offer unbiased advice, expert views that align to their financial goals rather than driven by sales commissions, and at a fair cost.
HNW investors prioritise the “quality of service rendered” (43%), “transparent and low fees” (42%), followed by “trusted brand and reputation” (37%).
The data further showed that Singapore respondents rely heavily on professional sources of financial advice from within the industry, such as wealth platforms (56%), online financial sites (55%) and relationship managers (53%).
However, a larger proportion expressed satisfaction with advice received from friends and family (83% satisfaction), as well as business connections (85% satisfaction), despite consulting them the least.
5. Investing with hedge funds
Respondents in Singapore who have not invested in private market strategies and hedge funds identified high fees (44%) as their biggest barrier, followed by the lack of know-how and the right knowledge (40%), and the lack of publicly available information (40%) such as fund performance data and prospectuses.
Respondents who have already invested in private market strategies and hedge funds – and intend to allocate more to these asset classes – cited their top barrier as the difficulty involved in managing private and public market investment portfolios on different platforms (37%), followed by high minimum investments (35%), and the lack of publicly available information (32%).
Are you interested in investing with hedge funds?