Affluent Asians are prioritizing their financial security

The study of over 11,000 affluent individuals in 11 markets worldwide reveals global worry that the increasing cost of living (expressed by 68% of respondents) and the impact of inflation on savings (61%) could impact life plans. But respondents in Asia are also focused on health-related risks, including rising healthcare costs (54%) and the impact of physical (60%) and mental (44%) health issues.

These concerns are reflected in the financial priorities of Asia’s affluent. Consistent with their non-Asia peers, Asia respondents ranked ‘gaining wealth for financial security’ (46%) and ‘planning for retirement’ (43%) as their top two financial goals, closely followed by ‘having sufficient insurance coverage’ (41%).

However, the survey also reveals gaps in planning:

Healthcare protection

38 per cent of affluent people globally say having sufficient insurance coverage is a top financial goal – up from 31 per cent in 2023 – but 23 per cent still do not have adequate healthcare protection. In Hong Kong, the figure climbs to 29 per cent versus 9 per cent in Indonesia.

In Asia, one in four Gen Xers lacks adequate health coverage, compared to one in five Gen Z and Millennials.

Retirement planning

42 per cent of affluent individuals in Asia do not feel prepared for retirement, with those in Hong Kong (47%), mainland China (55%) and Taiwan (51%) feeling less prepared than those in other markets.

Gen Xers are less likely than other generations to have a comprehensive retirement plan, while for Baby Boomers, three in ten are still behind on their savings goals and more than a quarter lack a plan.

Wealth accumulation

Affluent investors globally allocate nearly 32 per cent of their portfolios to cash, but those planning to rebalance their portfolios within the next year say they will invest 54 per cent of this cash, on average.

Gen Z and Millennials, on average, start investing up to a decade earlier than Baby Boomers, invest a higher proportion of their income (27%), and monitor their portfolios more frequently.

34 per cent of affluent investors in major international wealth centres plan to invest more outside their home markets, with the United States and mainland China the top two destinations.

Legacy planning

Most affluent individuals (79%) believe that early planning is crucial for passing on their legacy, but fewer than four in ten created a will or succession plan.

Affluents in Asia (33%) are even less likely to have created a will or succession plan than those outside of the region (43%), although Malaysia (47%) leads all markets.

Around one third of Baby Boomers (35%) acknowledge the need to start planning but have yet to do so, underscoring an intention-action gap as more respondents overall prefer to start transferring during their lifetimes than upon their passing (45% versus 37%).

Commenting on the findings, Kai Zhang, General Manager and Head of Wealth and Personal Banking, South and Southeast Asia, HSBC said: “These findings highlight the interconnectedness of financial and health challenges, revealing how deficiencies in one area can impact the other. This underscores the necessity of an integrated approach to managing wealth and health, as the way we plan our financial futures significantly influences our overall well-being.”

The study also reveals a connection between how people plan their financial futures and their life satisfaction. The data show that those who address a broad range of their financial needs and objectives in their planning are, on average, 50% more satisfied with their lives. Moreover, nine in ten of those who take a comprehensive approach to financial planning – encompassing protection, wealth accumulation, retirement, and legacy objectives – feel satisfied with their lives. In contrast, only six in ten of those with a narrower focus feel the same way.