More women say 'I do' ... to financial planning

Marketing executive Nancy Li has a plan. It is a plan that will ensure her 'a happy-ever-after' regardless of whether her prince comes along or not. It is a plan which, in the short term, will allow her to soon return to education to study law, then, in a few years, buy an investment property, and, in the long term, allow her to retire comfortably.

Li is one of a growing number of single women who have woken up to the fact that 'a man is not a financial plan', as a financial planning company puts it. This is especially true in Hong Kong, where the fact that single women outnumber men means that many are destined to a life of singlehood.

Mr Right or not, Li, like a true-blue new-age woman, has devised a plan with the aim of ensuring whatever the future brings, she will be financially secure. Every month, she puts 30 per cent of her salary into savings, investments and charitable donations.

Ten per cent goes into MPF contributions while the remaining 60 per cent is split evenly: 30 per cent to help look after her elderly parents and 30 per cent on daily expenses, entertainment, essentials and luxuries.

It is a plan that has amassed her HK$300,000 in a mixture of stocks, global funds and currencies over the past five years. She also factored in the unexpected, taking out a life insurance policy, and critical illness and medical insurance policy, each worth HK$1 million. It is a wise move for a 30-year-old woman in a city were the chances of Mr Right taking care of her for the rest of her life is becoming less of a certainty.

Census and Statistics Department figures show that last year, there were only 896 men for every 1,000 women in Hong Kong - a major change from 1981 when men outnumbered women by 1,087 to 1,000.

For women in their early 30s - when most girls marry - the situation is worse, with only 738 men for every 1,000 women aged 30 to 34. Experts believe the future of Hong Kong women looks increasingly single, with some projections claiming that by 2036, there will be only 709 men for every 1,000 women.

Crunch these numbers and you can see why it is important that women financially plan their future - and the sooner the better, says Pamela Bradley, vice-president of financial advice and investment company ipac, which has produced its own financial planning guide for women.

'The single most important thing a single woman can do for herself is to take responsibility for planning her own financial future and not rely on someone to do it for them,' said Bradley. 'They need to plan well and make sure it encompasses everything - savings, insurance, retirement. It should address all the things they want to achieve. They need to feel comfortable and confident that whatever the future brings, they can manage on their own two feet.'

Hong Kong women also live an average of six years longer than men, which means they have more years to factor into the equation when planning their retirement, says Bradley.

Likewise, more women are carving out careers and taking highpaying jobs than in previous generations, giving them more money to spend and invest. Official statistics show that the number of women working as administrators, managers and professionals in Hong Kong rose from 78,000 in 1993 to 187,100 in 2008.

Studies suggest women are destined to become ever more financially powerful in society. One carried out in 2006 by Allianz claimed that by 2010, women would be in a position to control 60 per cent of America's wealth. But the study also found that, despite being eager to enhance their financial planning skills, some 90 per cent were insecure about their finances and how to handle them.

In response to the growing financial clout of women, many banks and financial institutions have launched services tailor-made for women.

RBS Coutts, the international private banking arm of the Royal Bank of Scotland Group, launched one such initiative in April after a study revealed there was an untapped wealth management market involving Hong Kong women worth US$112 billion.

The study claimed Hong Kong had around 37,000 high-net-worth women - with investible assets of more than US$1 million - with an average net worth of US$4.4 million. Only 26 per cent of these super-rich women used the services of professional wealth managers, amounting to billions of dollars of assets being undermanaged, said the study.

According to Bradley, taking control of money and making it work for the future is something all women should be doing - regardless of how little or how much they have. 'It is not how much you earn, it's what you do with it. You could earn a fortune and spend a fortune, and end up having a more miserly retirement than someone who earned less but started planning early or more efficiently,' she said.

Bradley says the advantage for women is Hong Kong's savvy financial environment. The fact that Hong Kong families have become smaller also helps in giving Hong Kong women a head start, says Bradley, allowing them to stay at home longer, and save more for the future.

'But Hong Kong is also a great shopping and luxury goods destination, and there is a lot of temptation out there for the single woman,' says Bradley. 'Once your friends acquire a certain brand handbag, the pressure is on to at least to match or better still, go one better.'

Li began controlling her finances five years ago, first taking stock of how much she was actually spending, what she was spending it on and then working out a budget.

'I found a lot of my money was going on impulse buys like clothes - especially when there was a promotion. I just couldn't resist. I worked out around half of my salary was going on things which were not day-to-day expenses. It seemed far too much, so I started spending less and saving more. At first it was hard, but I got through that first month. Once I realised I could do it, the incentive was there for me to carry on.'

However, not all of Li's girlfriends share her money sense. Most, she says, are reluctant to talk about money. Some play the stock market, others spend huge amounts on impulse buys, leaving little for savings.

'I suppose it's because retirement seems such a long time away and, though Hong Kong girls are becoming more independent, they are still eager to have a family and find someone to take care of them,' said Li.

'The truth is, it's difficult to find the right man. Local girls have high expectations while Hong Kong men think local girls are too materialistic and career-driven. I still haven't found my Mr Right. But as long as I have my plan, I know I'll be fine. In fact, I enjoy my single life and being in control of my own life.'

There are about 37,000 high net worth women in Hong Kong, with an average net worth of: US$ 4.4m

Only 26% of the 37,000 use the services of professional wealth managers

US$ 40b of assets are being undermanaged as a result, according to a study