Women, own your worth

SOME people have remarked to me: "As a wealth manager managing your clients' wealth, planning and investing your own and your family's finance must be a stroll in the park for you."

At this, I would smile and say: "All it takes is confidence, and the first step".

Financial planning is not just about planning our finances; it is about planning for our future.

Among women, financial confidence has increased. But more needs to be done to inspire, encourage and support their journeys further. All things equal, women are likely to have a longer lifespan than men/spouses. We can't assume that someone will be there to handle our financial needs. We need to take charge of our finances and plan for our future.

In our UBS Own Your Worth report, in which we surveyed close to 4,000 women around the world, we learnt that women who participate in long-term financial decisions feel more confident about their future.

In Singapore, close to 70 per cent of women surveyed see the need for long-term financial planning - especially for retirement and long-term care. Yet, over 70 per cent of them defer long-term financial decisions to their spouses. This is because over 90 per cent of them believe their male spouses know more about investing and planning.

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This is the assumption we hope to challenge. We hereby encourage females to take the first step in owning their finances, and their future.

Many of our female clients express needs that are different from males. This is why we have actively engaged them on interests that are close to their hearts: from their family's succession planning, to philanthropy and sustainable investments.

Women who share equal responsibility for long-term investing with their spouse said there were clear benefits to this equitable arrangement. Of those women in Singapore who make joint decisions, 96 per cent feel more confident about their financial future. Almost all (99 per cent) of women in Singapore also mentioned that if something happened to their spouses, they will already know all about the finances. This increases their peace of mind.

This is why empowering women and encouraging them to take control of their finances is one of the key objectives behind our women's initiative at UBS. Taking control of your finances is not just about financial knowledge, but about having the confidence to act on what you know, asking questions and getting expert help when required.

At UBS, we are dedicated to understanding the specific needs of women and their preferences in their wealth planning. Females are not just a client segment to us, they are also a key part of our client base and they are in every business decision we make. Our teams here continuously tailor and curate holistic advice to women along their wealth lifecycle.

We recommend 3 strategies revolving around liquidity, longevity and legacy.

Liquidity

The liquidity strategy helps your family maintain cash-flow or meet short-term needs. This includes income from employment and/or a pension, and other investment assets designated to provide you with enough capital to enhance the flexibility for greater risk-return potential. The assets in this strategy must therefore be easily cashed out, and have high price stability. The greater the uncertainty of your income or the risk of unforeseen expenses, the more you should set aside in your liquidity strategy.

How do you determine how much to set aside? For the optimal mix, consider your short-term cash flow needs - the difference between expected income and expected expenses - and determine how much needs to be set aside for peace of mind.

The next step is to determine the level of your risk appetite relating to liquidity, market, and credit risks. This will determine the choice of the most suitable liquidity strategy solutions. While constructing your strategy, you need to consider currency and country-risk exposure.

Last but not least, do not forget the importance of diversifying across different solutions, tenors, and issuers.

Longevity

Longevity helps you meet your goals over your lifetime, by ensuring you are invested in a way that supports a high probability of meeting these objectives. Typical goals may include securing your early retirement, enabling relocation or amassing funds to start new business ventures.

Non-bankable assets can be incorporated into this strategy if they contribute to achieving your goals. Use a sensitivity analysis to check how much your investment returns and plans will change, depending on employment fluctuations or interruptions. One should always conduct a yearly review, to anticipate changes in your circumstances or goals to help you plan.

At UBS, we believe investors should err on the side of caution. Keep in mind, however, that spending can be adjusted along the way. We generally recommend targeting a probability of success above 85 per cent. Investors with more spending flexibility could target a lower amount. Those with less spending flexibility could choose to deploy more funds towards the longevity strategy to ensure greater success.

Legacy

The legacy strategy follows once the first 2 strategies are effectively funded. This strategy helps ensure your wealth lasts for generations and is allocated to serve causes that matter to you. The key to this strategy is to maximise the value of transfers to future generations, and at the same time create a positive impact to society along the way.

Because of the way it is structured, this strategy enables you to invest in a riskier portfolio with a high proportion of illiquid assets. Some examples include illiquid hedge funds, private equity and real estate.

Looking ahead, investors may also wish to include sustainable investments in their longevity or legacy portfolios. In Asia, where 70 per cent of our clients are entrepreneurs, we have seen strong interest and inflows in sustainable investments. Many investors have found that sustainable investments can generate equal or superior investment returns when compared with traditional investments.

Going forward, the net-zero carbon transition will prove to be one of the most consequential investment trends of the coming decade. We see opportunities across greentech, clean air and carbon reduction solutions, as well as in carbon trading strategies and environmental, social and governance leaders. Some potential short- to medium-term investment opportunities are likely to be in areas such as clean energy; energy efficiency and digitalisation; electrification and batteries; and bioenergy.

There is also likely to be exponential growth in the electric vehicle market. By 2025, we think that around 25 per cent of new cars may be electrified, reaching 60-70 per cent by 2030. Asia is home to the world's largest auto market (China), some of the biggest auto makers, and the most expansive supply chain of parts, chips and raw materials. We see a breadth of investment opportunities across the entire value chain.

We are wives, mothers, daughters, sisters

Women play many pivotal roles in the society. And being a daughter, daughter-in-law, wife and mother - my son is 20 and daughter, 18 - I understand and empathise with the multiple facets and challenges my fellow females face. I draw a lot of strength from the positivity of people around me. There is really no limit to what we can achieve if we put our hearts and minds to it.

I hope that every one of us can step up to take charge of our financial freedom today. Let's own it!

• The writer is managing director and head of wealth management in Singapore for UBS Global Wealth Management.