A secure future and responsible, stable investments are what Singaporeans over 55 years old want in their later years, according to Voices, an end-investor report conducted by AXA Investment Managers (AXA IM).
Did you know?
The 2018 edition of AXA Investment Managers (AXA IM)’s consumer research report, Voices, reveals what Singaporeans think and feel when it comes to their finances and investing for the future.
More than 1,000 people were interviewed, representing the top 80 per cent of earners in Singapore. Of these, 49 per cent were male and 51 per cent female; 120 children aged between eight and 15 years old were also included.
Most, however, are far from achieving their retirement goal.
The survey found that while 57 per cent of respondents in the age group are confident about their current financial situation — with 26 per cent feeling “very confident” — it drops to 17 per cent of them feeling “very confident” three years from now.
Mr Terence Lam, Managing Director, Head of Sales and Marketing for Asia at AXA IM, explains: "A United Nations research study indicates that by 2050, the number of people over the age of 80 will triple. At age 55, a person might have lived only just over half their life.”
He adds: “We also find that this group is relatively less willing to take financial risks. If they did not invest adequately in their younger days, we are not surprised to see they feel less confident in their future."
Low risk-taking appetite
Singaporean investors appear to be holding back because of perceived risks.
A high reliance on less risky assets is also seen — 85 per cent and 80 per cent of respondents hold a savings account and cash respectively, with only 35 per cent holding investments. Compared to other countries surveyed, more Singaporeans hold investment products than consumers in Italy (22 per cent), Spain (23 per cent), United Kingdom (24 per cent) and France (25 per cent), but fewer than those in Hong Kong (58 per cent).
Close to half of the 55+ interviewed are still deciding if they should invest more. As many as 47 per cent said they are only “somewhat likely” to add more money to existing financial investments.
But Mr Lam highlights the need for more active investment strategies: “Retirees may no longer receive a stable income if they don't invest, but living expenses and healthcare costs will still be there. Staying invested and ensuring they have long-term returns are vital for a solid future.”
Making investing work for you
Voices investigated the main elements that would encourage 55+ consumers to invest more. Receiving financial advice from trusted and authoritative sources with a personal touch came out on top.
Getting advice from a person that they trust (35 per cent) was viewed as the most important, followed by guidance in choosing the best product (29 per cent) and then lower fees (26 per cent).
And while technology and digitalisation are rapidly transforming the financial sector, an overwhelming 98 per cent of 55+ respondents say they have not used robo-advisers to make investment decisions before. More than half of the 55+ (62 per cent) are not comfortable with robo-advisers and do not intend to use them in the future.
Mr Lam observes: “In today’s information-flooded world, education and trusted expertise are highly valued, but being accessible and digitalised are equally prized. More than ever, advisers will need to take into account their clients’ needs and concerns.
“We believe that marrying guidance from credible experts and the use of technology will continue to be the key to providing the right solutions for clients.”
Responsible investing picking up
For the 55+ looking for lucrative portfolios with returns beyond pure profit, Environmental, Social and Governance (ESG) investing could be a viable option.
Amid the global rise of ESG investing, there is, interestingly, a growing bullishness among the oldest and youngest generations in Singapore. The majority (72 per cent) of 55+ consumers here think socially responsible companies will be in a better position in the long term — this sentiment was echoed by 79 per cent of the 16-to-21-year-old respondent group. This is in stark contrast to Hong Kong, where older generations would care about responsible investing much more than younger peers.
In line with the above findings, a large proportion — 61 per cent of those 55+ and 70 per cent of 16 to 21 year olds — say they look beyond financial gain and evaluate ESG credentials when investing in a company.
As responsible investing picks up in Singapore, unsurprisingly, 54 per cent of the 55+ investors expressed interest in investing in green/environmental technology among a wide range of tomorrow’s trends, with sustainable consumption coming closely the second (42 per cent) and artificial intelligence the third (38 per cent).
Ms Hazel Pitchers, AXA IM’s Global Head of Marketing, says: “It is very encouraging that responsible investing is gaining more traction in Singapore. We think investment managers should be taking ESG considerations into account as it not only potentially drives long-term investment return but also brings positive impact to the society.”
For more information, visit www.axa-im.com.