Investors in Singapore cautious going into 2025, even before US tariff uncertainties: Report

SINGAPORE - Investors in Singapore and elsewhere had grown cautious even before the US imposed new tariffs on goods entering the country, noted a new report.

It found the proportion of investors around the world who say they were investing more conservatively this year rose to 28 per cent, compared with 20 per cent in 2024.

The shift underscored mounting unease over global volatility and fragile economic sentiment in the run-up to US tariff changes that threatened trade flows. 

The findings from Avaloq wealth insights 2025 – based on data collected in February and March – also showed an increasing desire to build precautionary buffers against rising market uncertainty. 

The number of people investing to help fund major future expenses jumped to 47 per cent this year, more than double the 18 per cent in 2024.  

Retirement planning has become more pressing everywhere, with 58 per cent citing it as their main objective, the report said.

Looking at Singapore, the study said there is growing interest in cryptocurrency and digital asset investment. Traditional financial institutions here are well placed to capture this, but investors still need reassurance before diving in.

The report showed 26 per cent of Singaporean investors currently hold crypto assets, trailing 39 per cent in the United Arab Emirates, 37 per cent in Switzerland and 30 per cent in Hong Kong. 

Only 17 per cent of crypto investors in Singapore access digital assets through their traditional financial services provider, underscoring a gap between appetite and institutional offering.

Mr Vibhooti Chaturvedi, regional director for South Asia and Australia at Avaloq, a banking software company that is owned by Japanese tech firm NEC, said crypto adoption is tempered by a lack of knowledge and low trust in existing exchanges.

“This presents a massive opportunity for traditional financial institutions, as they have a trusted relationship with investors,” he said.

For wealth managers, retaining client trust in the digital era means evolving into one-stop shops for all types of assets. Integrating crypto offerings, alongside equities, bonds and environmental, social and governance (ESG) products will allow banks to future-proof their offering for younger, more risk-seeking investors, he said.

Nearly half – or 48 per cent – of Singaporeans who do not own crypto say they would invest if their existing bank or wealth manager provided access.

Elsewhere, wealth management professionals are already responding to the shift, with 54 per cent now considering cryptocurrencies and digital assets important for client engagement, compared with 44 per cent in 2024. This is in spite of the distrust of crypto exchanges. 

Mr Chaturvedi said Singapore’s wealth sector is also poised for such an integration.

“Singaporean investors stand out for their loyalty and positive sentiment towards traditional wealth managers. But advisers cannot be complacent – expectations for responsiveness, non-traditional investments and access to new opportunities are rising,” he said.

“Understanding their needs and meeting these expectations will be essential to retaining investors’ trust and loyalty over the long term,” he added.

Wealth management professionals here are optimistic about artificial intelligence (AI), with 93 per cent believing it will be beneficial for their industry. This is 12 points above the global average. 

Investors here have a greater trust in AI and believe its benefits outweigh concerns.

About 28 per cent of Singaporean investors prefer to connect with contacts at their bank or wealth manager through instant messaging, compared with 15 per cent globally.

Yet, a majority of wealth managers here – 70 per cent – reported that the technology systems they use are outdated, compared with the global average of 40 per cent. Only 30 per cent believe their systems are tightly integrated, compared with 46 per cent worldwide.

These legacy systems are widely seen as barriers to delivering more personalised advisory services, with 43 per cent indicating that outdated technology is a strong or very strong obstacle.

The lengthy internal approval process when welcoming a new client was cited by many as a pain point, with 48 per cent wishing for an automated onboarding system.

The study also showed that interest in ESG investing continues to grow globally, with ESG engagement rising to 63 per cent from 55 per cent. Asia saw an even bigger jump from 41 per cent to 67 per cent.

For Singapore’s wealth managers, this signals that the same investor readiness driving digital asset interest also extends to sustainable investing and legacy planning strategies.

The study also highlighted that with the ongoing market volatility, investors globally are increasingly relying on news articles for information, up 8 percentage points over 2024.

While wealth industry professionals remain the dominant source of investment guidance, social media also registered greater traction, with a 6 percentage point increase in usage for investment insights.

It said that while many investors still prefer in-person support for tasks such as mortgages and loans, there is growing comfort with digital tools like chatbots and virtual assistants globally.