SINGAPORE – More wealthy Singapore-based investors are thinking of relocating their family members – either to the Republic or elsewhere – than their peers in the region, according to a report out on Tuesday (Oct 26) by Swiss private bank Lombard Odier.
These high net worth investors (HNWIs) are also the most concerned about overheating stocks of all the regional investors polled, with more than half expecting a market correction.
Lombard Odier spoke to 620 HNW individuals – defined as those with at least US$1 million of investible assets in the region – across Singapore, Hong Kong, Japan, Thailand, the Philippines, Indonesia, Taiwan and Australia.
It conducted the study to better understand HNWIs’ perception of the current Covid-19 environment, the impact of the crisis on their lives, families and businesses, as well as their thoughts on the post-pandemic future.
Some 60 per cent of these Singapore-based investors have rethought their family’s geographical set-up since Covid-19, the survey found.
Meanwhile, 41 per cent are also thinking of relocating, the highest percentage across the markets studied.
Mr Vincent Magnenat, Lombard Odier chief executive for Asia, said relocation is generally prompted by the desire for the family to be together, especially if some members have been studying or living overseas during the pandemic.
Relocation could also mean children abroad returning to Singapore to live with their families based here, he added.
“The trend that we are seeing clearly is that we have quite a number of (investors) in the region relocating to Singapore, with the schemes it has in place and the set-up of family offices. This is a major trend that we’re seeing over the last few years that have been accelerated during this period.”
He noted that the environment, safety and financial ecosystem in hubs such as Singapore and Hong Kong are very important to investors at this time.
Separately, Singapore investors are also among the most concerned about overheating equity markets, with 52 per cent expecting a correction.
More than half of respondents believe that there will be a higher inflation environment and more than half are also thinking of changing their portfolio return, with 23 per cent adjusting it higher and 28 per cent lower.
This probably represents those who want to continue developing their equity exposure and those who are concerned about a market correction, the report said.
“In this context, it has never been more important for a Singapore investor to diversify into a global portfolio than now,” it added.
“Banks’ responsibility is to enable Singapore investors’ access to a global offering, in order to be able to ensure this diversification.”
Mr Jean-Francois Aboulker, Lombard Odier Asia’s head of UHNWI (ultra high net worth individuals) offering, said: “Findings from the study show that amid the unpredictability of today’s environment, there is an increase in the divergence of views and needs of HNWIs, and they are increasingly looking to banks for guidance especially within individual markets.
“The race to net zero is also adding more diversity to investment opportunities, while wealth and succession planning remain even more relevant than usual.”
In this vein, 80 per cent of Singapore investors are looking to increasingly leverage on their banks’ expertise and mandates in order to navigate the markets’ uncertainty and volatility, the report said.
But one area in which wealthy Singapore investors lag behind is in sustainability, the report showed.
Only 49 per cent of Singapore respondents said they believe that green investments can bring higher returns, compared with the regional average of 59 per cent.
About a third of respondents said they had already increased sustainability factors in their portfolio, which is the second lowest percentage across the countries in the region.
Only half of those who have not made such portfolio changes intend to do so in the future, according to the report.
It said: “There is a large push for sustainable investments in Singapore, which as a financial hub is very developed in terms of the identification and implementation of sustainability issues.
“Consequently, investors price a bank’s ability to deliver sustainability more as a commodity, even though it is a must-have.”
In contrast, investors in countries which do not have such easy access to sustainable solutions, such as Indonesia, will price them higher. These countries might also have more visible damage from climate change and pollution, making sustainable solutions highly valued.
“There is a long way for Singapore investors to go in increasing their conviction on sustainability,” the report said.
“At the same time, this presents a unique opportunity for banks to proactively engage with investors, to educate and highlight the unique investment opportunity sustainability represents.”