80% of Singapore HNW investors want more hand-holding from banks amid market fears: survey

MORE investors in Singapore are tweaking their portfolios in the current high-volatility environment, with 52 per cent expecting a market correction, a fresh survey by Lombard Odier found.

These high net worth individuals (HNWIs) are among the most concerned about overheating equity markets, of all the regional investors polled.

But this does not mean they do not want to invest. Accrued advice from banks has never been more sought after, with 80 per cent of Singapore investors looking to increasingly tap their banks' expertise and mandates to navigate the uncertain climate.

Some 50 per cent said they are looking for full delegation with discretionary mandates - either on a standalone basis or combined with active advisory - while 30 per cent prefer pure active advisory where the bank is actively advising but the client has the last say, said Lombard Odier in a report on Tuesday (Oct 26).

Over half of the Singapore investors surveyed are thinking of changing their portfolio return - 23 per cent higher and 28 per cent lower - which likely represents those who want to continue developing their equity exposure and those who are concerned about a market correction.

Similar changes are observed for portfolio risks with 45 per cent of investors adjusting it higher or lower. 26 per cent said they are increasing their portfolio liquidity to be more prepared for market turmoil.

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Interestingly, while 58 per cent of all Asia-Pacific investors surveyed believe in an impending higher-inflation environment, Singapore investors seem to be less concerned about hedging inflation risk with only 17 per cent thinking about it.

"It has never been more important for a Singapore investor to diversify into a global portfolio than now. Banks' responsibility is to enable investors' access to a global offering in order to be able to ensure this diversification," said the report.

While sustainable investing has become an essential portfolio strategy in many countries, Singapore still has some way to go.

Among countries polled, investors here are among the least convinced about the ability of sustainability to generate superior investment returns, with only 49 per cent saying they believed it did compared with a regional average of 59 per cent.

Only a third have already increased sustainability factors in their portfolio, the second lowest number across countries. About half of those who have not started intend to do so in the near future.

Investors price a bank's ability to deliver sustainability more as a commodity, even though a must have. Still, this only partially explains the low score and there seems to be a lack of conviction from Singapore investors on the matter, said the report.

"It is the role of banks to take Singapore investors further to fully embrace the unique investment opportunity sustainability represents, using education and the availability of a meaningful offering," it noted.

There is also still some way to go for Singapore investors to fully structure their family matters, an area where private banks can support them on.

Although 60 per cent of investors here did rethink their family set-up since Covid-19, only half have implemented a solution. About 41 per cent are thinking of relocating and changing the geographical set-up of the family which would have a significant impact on banks' businesses.

"A bank that is able to continue advising a client from its domestic country regardless of the client location will have a considerable competitive advantage compared to the bank whose reality is purely onshore," said the report.

Good reputation and quality of employees remain key factors for Singapore investors choosing a bank.

"The bank of today and tomorrow will therefore need to be adaptable, flexible and able to offer solutions in more than one reality," said Lombard Odier.

Its recent survey polled 620 HNWIs across Taiwan, Singapore, Hong Kong, Japan, Thailand, the Philippines, Indonesia and Australia.