The rise of the robo-advisers was increasing dramatically before the pandemic, but now it seems that investors are looking more towards financial advisers.
Wealth manager St James’s Place (SJP) surveyed over 2,000 wealthy individuals in Hong Kong and Singapore, and found 84% and 81%, respectively, heavily prioritise seeking financial advice before making any major financial decisions.
Additionally, 62% of Hong Kongers and 70% of Singaporeans would consider engaging a financial adviser to manage investments on their behalf.
Nearly half (49%) of Hong Kong respondents, rank financial advisers among their top three sources of financial guidance, ahead of family (46%), bankers (44%) and friends (39%).
Singapore respondents also rank financial advisers among their top three sources of financial advice, ahead of websites and blogs (49%), advisers (40%) and family (38%).
Human touch
The survey also found over half of Hong Kongers (52%) and Singaporeans (51%) believe they could have achieved better investment outcomes in the past five years if they had engaged a financial adviser.
In spite of the rapid rise of robo-advisory platforms, almost all Hong Kongers (91%) and Singaporeans (94%) said receiving face-to-face financial advice is important to them.
Over half (52% in Hong Kong and 53% in Singapore) prefer to engage with a financial adviser and around a third (34% in Hong Kong and 32% in Singapore) consult with their banker first.
Only 11% of Hong Kongers and 12% of Singaporeans said that robo-advisory platforms are their preferred mode of advice.
Help not replace
Matthew Deeprose, head of business at SJP Hong Kong, said: “Investing your hard-earned savings and allowing others to manage your wealth responsibly can be a very emotional decision, particularly in today’s volatile markets.
“A key finding from the survey is the importance of building trust, which goes some way to explaining why robo-advisory platforms are unlikely to ever supplant face-to-face relationships.
“While technological advancements can play a great role in facilitating the client experience, they should not replace trusted and clearly valued face-to-face advice.”
Trust
The top areas where Hong Kongers and Singaporeans feel they need more financial advice are similar.
These are mainly in investments (86% and 87% respectively), property and mortgages (74% and 80%) and retirement planning (73 and 78%).
Honesty was the most important trait to consider when choosing a professional financial adviser to work with for 59% of Hong Kongers and 63% of Singaporeans.
For those who have not engaged with a financial adviser, the main barrier is perceptions that fees are too expensive (61% and 57% in Hong Kong and Singapore respectively).
They can manage their own investments (49% and 51%), and they don’t trust someone else to manage their money (41% for both) made up the top three.
Professionalism
Gary Harvey, chief executive at SJP Singapore, said: “Today, trustworthiness and professionalism of advice has taken on greater importance with increased standards and scrutiny over how we operate.
“This is something that those in financial services welcome and an area where we must continuously evolve to better support clients and advisers.
“We see more people willing to pay for advice, provided it is grounded in expertise and tailored to their personal interests.”
