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Hong Kong millionaires beat Americans in investing for parents and children, according to survey

75 per cent of Hong Kong respondents said they wanted to set aside funds for parents, compared with 25 per cent in the US, according to Charles Schwab poll

PUBLISHED : Tuesday, 29 May, 2018, 12:31pm
UPDATED : Tuesday, 29 May, 2018, 11:20pm

Hong Kong millionaires are more aggressive than those in the United States when it comes to investing for parents and children, according to a survey released on Tuesday by US brokerage Charles Schwab.

The online survey, conducted in February, polled 2,000 Hong Kong and US investors who earned up to US$225,000 a year and had up to US$1 million to invest.

“There is a lot of financial pressure, to take care of parents while at the same time to buy a property for children,” said Michael Fong, the managing director of Charles Schwab Hong Kong.

Half of the respondents in Hong Kong were investing for their families, and 75 per cent said they wanted to set aside funds for their parents, compared with only 25 per cent in the US.

Hong Kong investors were also more likely to buy apartments for their children – 41 per cent said they planned to buy property for their children, as opposed to 20 per cent in the US and 33 per cent in mainland China. And when it came to leaving money for their children, 55 per cent of Hong Kong investors wanted to grow their funds to pass onto their children in the next 10 years, as opposed to 43 per cent in the US.

There is a lot of financial pressure, to take care of ageing parents while at the same time to buy a property for children
Michael Fong, managing director, Charles Schwab Hong Kong

About 47 per cent of Hong Kong investors aimed to double their investment yield in the short term, as compared with 32 per cent in the US. Investors in the city were also more likely to invest in real estate, with 43 per cent saying it was their long-term investment goal, compared with 27 per cent in the US.

The survey also found that, at 80 per cent, more Hong Kong investors were willing to invest internationally, as compared with 16 per cent in the US.

“Hong Kong investors are more eager to invest internationally and diversify their portfolio. However, there is a gap in finding appropriate and reliable investment advice from financial experts. Their high expectation of returns is also not aligned with their investment attitudes,” said Fong.

A majority of Hong Kong investors, 78 per cent, said they felt more knowledgeable than a financial adviser. Only 34 per cent consulted such advisers, compared with 60 per cent in the US and 45 per cent in mainland China.

“Many Hong Kong investors tend to make their investment decisions independently. They need to understand their risk-tolerance level and adopt a diversified approach to their investments,” said Fong.

According to the survey, women investors were especially aware of the importance of diversification, and felt they needed more resources to diversify their portfolio, as compared with men.

A separate Charles Schwab survey found that affluent investors in mainland China expected lower returns; they wanted returns of up to 10 million yuan (US$1.56 million), with a steady annual yield between 5 and 10 per cent.

These investors also consider it important to invest for their families, but they are more keen on providing for education expenses, with 69 per cent investing to finance their children’s education.

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