HSBC unveils new retirement fund solutions as longevity increases
As Hongkongers live longer, the bank is collaborating with global asset managers to address their evolving retirement needs
Hong Kong boasts one of the world’s highest life expectancies, with residents expected to live, on average, at least 20 years beyond the traditional retirement age. While the gift of a longer life should be celebrated, it is essential to consider the financial implications.
This new era of longevity, compounded by market volatility and inflation, has created a critical gap in the market that must be addressed with new solutions. Individuals are living longer, and they are navigating market volatility, inflation and rising healthcare costs. Yet for many, the tools available have not kept up with the realities they face, according to HSBC, and while investors know what they need, the market has not yet delivered it.
The scale of the challenge is significant. According to the “HSBC Premier 2024 Affluent Survey”, Hong Kong’s affluent families believe they need an average of HK$20.9 million (US$2.7 million) in assets to secure an ideal retirement. Meanwhile, another recent survey by HSBC revealed that less than 40 per cent of individuals approaching retirement feel confident about reaching their financial goals.
In view of these needs, HSBC has launched a specialised suite of investment funds designed for retirees that could generate recurring income, preserve capital with moderate growth and offer liquidity for unexpected expenses. As the first of its kind in the banking sector, according to HSBC, these solutions aim to support customers’ retirement planning while focusing on the long-term value of their retirement assets. This initiative adds a new layer to HSBC’s already comprehensive retirement planning services by offering exclusive solutions developed in collaboration with leading asset managers, BlackRock, HSBC Asset Management and Schroders.
Mandy Lui, managing director and head of Greater China wealth at BlackRock, highlighted the importance of starting early and engaging in active risk management. “It is important to start thinking about retirement planning as early as possible and growing your wealth gradually,” she says, noting that as individuals age, they should be aware that their risk tolerance needs to change according to their lifestyle needs.
Individuals also need to maintain growth in their portfolios to combat inflation and ensure their savings last. Jasmine Hung, CEO and head of pensions strategic partnership in Hong Kong at HSBC Asset Management, says: “We have kept an innovative mindset in helping our investors to think about balancing recurring income and moderate growth, as well as liquidity during their retirement.”
Indeed, with sound planning, investors can better focus on best practices specific to their age and stage in life. Gopi Mirchandani, head of client group for Asia at Schroders, says that the partnership with HSBC puts it in a unique position to guide investors through different investment retirement phases. “In particular, we want to focus and position investors for thinking about growth during the retirement stage. And this means essentially guiding them and positioning their portfolio to ensure that they get a diversified approach, they benefit from capital growth during retirement, and they also maintain liquidity and a stable income.”
Recognising these needs of its customers, HSBC offers comprehensive insights into its Premier and Premier Elite clientsʼ financial situation and life aspirations, enabling the delivery of tailored wealth management solutions designed to help Hong Kong residents plan for their retirement and proactively take advantage of future opportunities, according to the bank.
This new suite of funds, along with its financial planning service, reflect the bank’s commitment to supporting customers as they enter their future after work, according to HSBC. The bank says it will continue to expand this specialised range of solutions to address the financial objectives for its customers, including generating a stable income stream, achieving moderate capital growth, and maintaining liquidity for the unexpected.
Disclaimer by HSBC:
Investment involves risk. This information is intended for persons in Hong Kong.
Unit Trusts are investment products and some may involve derivatives. Unit Trusts are NOT equivalent to time deposits. Investment involves risk and in an extreme case, they could be worth nothing. Past performance is no guide to the future performance.
The Funds may distribute dividends but not all dividends are guaranteed. Please note dividend yield doesn’t indicate your potential returns from the fund. The fund manager may decide to pay dividends using the fund’s capital. This represents a partial return or withdrawal of your original investment or your realised and unrealised capital gains. It may result in an immediate decrease of the fund’s NAV. The fund’s capital may be eroded substantially or fully over time.
The Funds’ investments may involve investment risk, liquidity risk, country/region risk, currency risk, counterparty risk, derivatives risk, risks from dividend payments out of capital, risks from dividend payments out of implied interest rate differentials, risks relating to hedging and the currency hedged share classes, credit risk, interest rates risk, downgrade risk, fixed-term investment risk , emerging markets risk, securities lending risk, Renminbi risk, repurchase and reverse repurchase transactions risk, concentration risk, sovereign debt risk, small and mid-capitalisation companies’ risk and valuation risk.
The Funds may invest in other collective investment schemes, and need to bear the underlying funds’ fees and expenses on top of the Fund’s own fees and expenses.
The Funds may invest in financial derivative instruments for investment purpose which may lead to higher volatility and high risk of capital loss.
Investors should not invest solely based on this document and should read the offering documents for details.