Nearly 1 in 2 high net worth women in Singapore do not feel financially secure

Prudential survey said COVID-19 has impacted confidence further, prompting 76 per cent of high net worth women to review their wealth plans

high net worth women

They may have a personal wealth of at least S$2 million in assets but nearly one in two (44 per cent) high net worth women in Singapore (“HNW”) do not feel confident about their financial future. Women aged between 45 and 49 (54 per cent) have the least confidence.

The findings reflect the attitudes of 250 high net worth women in Singapore aged 35 and above who were surveyed for a study commissioned by Prudential Singapore and researched by Aon Solutions Singapore.

This is according to a survey commissioned by Prudential Singapore (“Prudential”) that explores how the growing number of HNW women in Singapore approach wealth planning. Singapore has more than 34,000 HNW women with investable assets of at least S$2 million2.

Close to half (48 per cent) of the 250 respondents said an inadequate knowledge of wealth management is a key factor fueling their financial insecurity. The other concerns highlighted by the respondents were the fear of their investments failing (44 per cent) as well as rising medical expenses and potential income loss due to health-related issues (43 per cent)3.

The COVID-19 outbreak has further impacted confidence. Since the pandemic, nearly 8 in 10 respondents (79 per cent) said that they have become more cautious when it comes to making investments, and more than 6 in 10 (64 per cent) find that their tolerance for risk has lowered.

The findings validate trends that Prudential has observed among its HNW female clients, who make up nearly half of its Opus customer base, said Ms Angeline Alexander, Head of High Net Worth and Affluent Customer Segments, Prudential Singapore. Opus is Prudential’s dedicated offering for HNW individuals.

“We have found that our female high net worth clients have a strong interest in acquiring knowledge about wealth accumulation and transfer. As such, we will focus on delivering targeted programmes for our female clients this year to help them meet their financial goals, in addition to the wealth and legacy planning events that we have been offering to all of our Opus customers.

“With rising lifespans, and women living longer than men in general, we want to support our female clients in planning better for their retirement so they can enjoy the possibilities that a longer life presents,” said Ms Alexander.

High net worth women are countering insecurity with constructive action

High Net Worth women are taking proactive steps to secure their financial future. The women surveyed have set an ambitious target of accumulating five times their current wealth ahead of retirement.

“While wealth creation is important, it is equally critical to preserve what you amass. The survey has found that only 24 per cent of the respondents are fully focused on wealth preservation. By placing more emphasis on protecting wealth, and doing so early in one’s life, we can safeguard our hard-earned savings from unforeseen risks.

“The unprecedented COVID-19 outbreak has raised awareness of wealth protection. In particular, we are seeing an increase in demand for health insurance solutions as many are starting to recognise the impact that healthcare costs can have on their wealth and retirement goals,” added Ms Alexander.

Since the pandemic hit, nearly 8 in 10 (76 per cent) High Net Worth women have begun reviewing their financial plans with wealth managers, asset managers and insurance specialists. Additionally, 6 in 10 (61 per cent) are looking to insurance as a means to plan for their retirement.

Prudential has been serving Singapore’s HNW population through Opus by Prudential, since 2018. The offering, which was launched to address the unfulfilled wealth protection and transfer needs of HNW individuals, has today grown to comprise a team of over 100 Private Wealth Consultants, wealth planners, a reputed panel of external subject-matter experts and a dedicated servicing team.

Mr Paul Ho, chief officer at iCompareLoan, said: “a survey done last year said 78% of respondents in Singapore believe that insurance plays a significant role in creating and preserving wealth.”

Report on insurance for high net worth individuals by AIA and EY done last in June last year shows 90% of Singapore respondents leverage insurance solutions as part of preserving wealth and legacy planning.

The report identifies specific challenges faced by HNWI’s and explores how insurance solutions can help this segment with their overall wealth management.

Ms. Ho Lee Yen, Chief Customer and Marketing Officer of AIA Singapore said, “High-Net-Worth Individuals in Singapore are starting to look far beyond basic life insurance coverage towards more holistic protection offerings including healthcare support, estate planning, tax optimisation, business succession, and debt risk mitigation. Early planning and holistic wealth management are critical in helping safeguard legacies, especially during times of economic uncertainty, and smart insurance solutions can provide a source of passive income streams as well as the asset diversification required to buffer against market volatility.”

“More critically, for many entrepreneurs struggling to maintain business continuity during this trying period, insurance solutions such as keyman insurance are now being considered as a form of long-term wealth protection for their business regardless of size and scale,” she said.

Mr. Dustin Ball, Partner and APAC Insurance Strategy Leader at EY, said, “The findings show that HNW individuals are a diverse segment and face specific challenges based on the source of their wealth.  These challenges are well-suited to insurance solutions and there is an opportunity to increase the understanding and awareness of how insurance products can augment wealth planning.”

Notable findings from the report include:

  • 70% of HNW respondents in Singapore said that insurance comprises more than 10% of their wealth and legacy planning, compared with the 52% indicated by their peers across Asia. This reflects the understanding that HNWI’s in Singapore have on how insurance solutions play an important role in wealth management.
  • 75% of HNWIs across the region use insurance for succession and legacy planning, reflecting the relatively high financial security of insurance companies.
  • 86% of Singapore-based HNWIs own medical or critical illness insurance policies, driven by a demand for coverage of medical costs as well as access to first-class healthcare support.
  • 48% of HNW entrepreneurs in Singapore have business protection through insurance solutions, encompassing a range of areas including business loan protection, health and illness income protection, business transfer and legacy planning and inheritance equalization, falling short of the regional average of 54%.
  • 84% of HNW entrepreneurs in Singapore have previously heard about business wealth protection, but 52% of them do not have any kind of such protection in place.
  • 96% of HNW professionals in Singapore consider retirement planning as an important part of overall wealth management and essential to ensure a successful transition from working to retirement, compared to 92% in Asia.

Written by Ravi Chandran

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