Frontier markets: Short term success and long term potential
The frontier markets have outperformed emerging ma...
When it comes to saving money and spending on lavish consumption, Hong Kong-based Western expatriates are more prudent compared to their counterparts in Singapore and the UAE. However, when looking at investment, they are considerably more inclined to opt for riskier products and are more attracted to short-term vehicles, according to findings of the first Standard Life Western expat wealth study.
· On average, Hong Kong-based Western expatriates save or invest nearly 60% of their disposable income, compared to 57% in Singapore, and just 32% in UAE.
· Hong Kong-based Western expatriates are also the least likely to spend their disposable income on living a luxurious lifestyle, with just 47% of respondents saying that they allocate money to spend on lavish goods and services each month, compared to 51% in Singapore and 97% in the UAE.
· The findings also show that Hong Kong-based western expats have a higher appetite for risk when investing: 71% of them prefer equity investments over the likes of property (55%), mutual funds (56%) and gold (56%). This compares to 43% who favour equities in Singapore, and just 9% in UAE. Meanwhile, nearly three in 10 (29%) in Hong Kong prefer short-term investments, compared to 10% and 20% in Singapore and Dubai respectively.
Hong Kong-based Western expats are also the most likely of all three groups to seek financial advice from a professional (53%) compared to 49% and 31% in Singapore and Dubai respectively.
Roy Halliday, chief executive, Hong Kong at Standard Life, commented: “Customers in many of these markets are increasingly aware of the importance of long-term financial planning. Standard Life has a long and proud history of meeting the needs of expatriates, no matter where they originate from and where they currently live. This research allows us to understand our western expat customers better, so that we can offer them quality long term saving and investment solutions across different locations and jurisdictions, helping to secure their financial future.”
“Many of the responses reflect demographics and various market characteristics. With a long history of open markets and free enterprise, Hong Kong is renowned for being a financially-literate city, so we aren’t surprised to see that expat residents are more cautious and deliberate when it comes to financial planning. Hong Kong is also consistently one of the most expensive places in the world to live, so it is not unusual for people think twice before splurging on luxury products and services.”
The study further revealed some interesting numbers about retirement provisioning – a high number of respondents in Hong Kong (84%) believe they will have sufficient income post-retirement, followed by the UAE (76%) and Singapore (47%).
“It is clear that most people become expatriates due to financial factors. Most western expats move to high earning, tax friendly cities with the intention to save and secure their financial future. It is pleasing to see that many Hong Kong expatriates seek financial advice from trusted professionals. Retirement planning is critical and we always champion a prudent approach for financial security in your golden years,” Halliday noted.