Friends Provident International, which conducted the research, said almost 70% of affluent investors surveyed in Hong Kong and 65% of those in Singapore, trusted professional advice. The company did note however that one third also said they would also seek advice from friends or through the use of technology.
In another vote of confidence for advisers, the research also found they were better at gaining trust than bank relationship managers, although they were behind insurance agents.
Out of the 501 sampled for the survey in Singapore, 35% said they trusted insurance agents while financial advisers scored 20% of the votes with bank relationship manager securing mere 7%.
A similar outcome was observed in Hong Kong with 39% of the 500 sampled for the survey trusting insurance agents, 20% financial advisers, and 11% bank relationship managers.
This is in contrast to figures published earlier this month by the Singapore Life Insurance Association, which found that banks are capturing around 40% of the insurance market, with tied agents commanding a 42% share and financial advisers accounting for just 14%
The survey, which was conducted in early April, showed respondents in the region are feeling less financially secure compared to the last quarter of 2013.
Chris Gill, general manager, southeast Asia at Friends Provident International attributed the growing insecurities to the uncertainties in the macro-economic environment such as the economic slowdown in China and the political crisis in Ukraine.
“Closer to home, the rising cost of living including the high property prices could also be the key elements that have contributed to the perception of financial insecurity,” Gill added.
The survey highlighted both Hong Kong and Singapore still have a high under-insured population with 65% and 58% of respondents insured below HKD3m and SGD500,000 mark respectively.
James Tan, managing director at Friends Provident International said: “It is worrying that, while people acknowledge that they do not have enough protection in place, they do not appear to be addressing the situation.”
In the face of rising insecurity and waning confidence, Tan said the company would encourage individuals to speak to their professional advisers.
Other key details
The survey showed a drop in the Friends Provident Investor Attitudes Index to almost half in Hong Kong and by 40% in Singapore as compared to Oct-December quarter of last year, indicating that affluent and aspiring affluent investors in the region are not certain about the current investment climate.
Explaining the reasons for this, Tan said: “There are local factors (apart from other global factors). For example, in Hong Kong, there is change in regulations for investing in products that is designed to promote better transparency, better understanding, and clear documentation.”
Tan was referring to the new regulations including the commission disclosure requirements that kicked in the country in May, impacting the sale of investment-linked products.
According to the survey, investment sentiment across most asset classes dropped except for bonds that saw a positive uptick. Sentiment around property investments dipped to negative three points in the asset class index for the first time ever in Hong Kong and to zero in Singapore. The decrease comes in with government’s measures to cool down the property market.
Also, a majority of the affluent investors selected retirement as the number one saving priority followed by saving for emergencies and medical expenses.
