STANDARD Chartered’s latest survey into affluent consumers – comprising emerging affluent, affluent and high net worth (HNW) individuals – revealed that COVID-19 has prompted the affluent in Malaysia to become more future-focused when resetting their priorities.
Nearly half (48%) of Malaysians have set the goal to have a more comfortable retirement followed by 43% of Malaysians setting the goal to improve their health.
To meet their new goals, the affluent need new strategies to grow their wealth which often involves more proactive investment rather than just saving cash.
However, their current ‘confidence gap’ has made many increasingly averse to risk, potentially stopping them from putting their money to work through investing or making use of digital tools that simplify wealth management.
The emerging affluent in Malaysia have suffered a relatively higher loss of confidenc with more than half (54%) reporting less confidence. The loss of confidence among the HNW individuals while relatively lower at 48% is still significant.
A majority of the affluent overall in Malaysia stand to lose out if they do not have the support to rebuild their confidence.
For the affluent across the wealth spectrum in Malaysia, the three most common factors impacting their confidence were volatility in financial markets (36%), fear of poor returns on investments (32%) and hesitancy or uncertainty around committing to investment decisions (27%).
Retirement is at risk
A late start to retirement planning – combined with the pandemic-induced ‘confidence gap’ – leaves a significant proportion of affluent consumers at risk of a shortfall for their retirement.
In Malaysia, 28% of people do not currently save/invest for retirement. For those that do, investment income (55%) and cash savings/deposits (45%) are the most common expected sources of income in retirement.
At the same time, 50% plan to retire before the age of 65 and in the last 18 months, 19% have set the new financial goal of retiring earlier. This shows a disconnect between current actions and future expectations if a confidence gap is holding them back from investing.
Globally, almost all (94%) of investors who had tried more than five new investments or investment strategies were reported being happy with their finances.
Whether it is diversifying into new asset classes, new investment strategies to rebalance their portfolios, or exploring sustainable investing, the survey revealed that more hands-on investors are happier with their finances.
This trend is mirrored in Malaysia where a strong majority (87%) of those who have made five or more changes to their portfolios following the pandemic are happy with their finances.
“The good news is that affluent investors in Malaysia appear to be headed in the right direction with nine out of 10 investors managing their finances better,” opined Standard Chartered Malaysia’s head (consumer, private and business banking) Sammeer Sharma.
“The next step is to offer them the right investment advisory along with diversified wealth solutions to help them meet their goals.” – Nov 24, 2021
