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Plugging the missing piece in the wealth management puzzle
Today, wealthy individuals and families alike are caught in a quandary brought about by global economic uncertainty. While they understand the need to protect their nest egg and legacy in a volatile environment, they also fear that they are unable to grow their wealth over the long term.
These concerns were voiced in a recent survey of affluent individuals in Singapore by insurer AIA Singapore. In particular, the AIA Affluence Barometer 2019 found that Singapore's affluent are most worried that their investments will not do well in today's economic climate. Among the 3 in 5 who are not confident about creating wealth for the future, almost 3 in 4 attributed their lack of confidence to growing investment uncertainties as a result of global market volatility and weak economic growth.
These affluent, especially those from the younger generation, also do not have adequate protection in place, with 1 in 5 not holding any life protection insurance policies. Furthermore, a large majority of respondents are losing sleep over their legacy, and do not have succession plans in place. While over 80% of those with children plan to pass on their wealth to the next generation, only 12% have put in place sufficient plans to do so.
In light of these findings, there is clearly a need for wealth management solutions that can both grow and protect wealth for the affluent segment. Yet, there are few products in the market that can singlehandedly achieve both successfully. Current solutions for affluent clients are unable to effectively address these multiple needs
Generating sustainable returns
To plug this gap in the market, AIA Singapore (AIA) has developed an innovative savings product that offers both wealth creation and protection. Known as AIA Platinum Wealth Elite, this first-of-its-kind solution is designed to address affluent customers' legacy and retirement planning needs through a wealth creation engine, put together to generate sustainable investment outcomes.
Working with their investment partners, AIA will focus on investing for the long term, while remaining agile enough to capitalise on market opportunities that may arise from time to time. To achieve this, AIA Platinum Wealth Elite offers clients access to world-class asset management talent usually reserved for institutional investors.
Through this product, affluent individuals will have access to one of 3 portfolios, tailored to their risk profile, and powered by a range of investment strategies residing in the AIA Investment Funds platform. AIA Investments will provide overall investment stewardship to ensure long term value creation, together with leading institutional investment partners such as Baillie Gifford, Wellington Management and BlackRock.
"Affluent consumers are constantly looking for new ways to grow and protect their wealthwith confidence. AIA has taken a radical approach by giving our customers access to specially created and exclusively managed investment funds by some of the world’s finest institutional asset managers combined with AIA’s protection solutions, high-quality advice and service," said Mr Ng Keng Hooi, Group Chief Executive and President, AIA.
"Our aim is to provide our customers with new and innovative ways to help them achieve financial security and peace of mind for the long-term." AIA Platinum Wealth Elite was launched in Singapore on July 19.
Seeking high coverage with flexibility
The AIA survey also found that, when it comes to protection, the wealthy tend to favour regular pay outs, as well as flexible access to their funds in their insurance plans. AIA Platinum Wealth Elite has built-in features that not only provides high coverage for whole of life, but offers policyholders a variety of liquidity options.
In terms of protection, the product offers clients access to high insurance coverage. This comes with a "No lapse" privilege that will keep the policy in force for the first 15 years or during the premium payment term, whichever is later, regardless of the policy value.
To offer liquidity for wealth distribution and retirement, the AIA Platinum Wealth Elite allows policyholders to withdraw up to 5% of the policy value at the start of each policy year, without affecting the coverage amount. This feature starts from the 11th policy year onwards, or after the premium payment term ends, whichever is later. Policyholders also have the option of a single premium or regular premium for 5 years, with the option of extending this period to up to 20 years when they buy the plan.
With its various innovative components, the AIA Platinum Wealth Elite is a solution that tackles head-on the unmet needs of affluent clients in Singapore. It expands on the strengths of traditional investment-linked policies that provide both investment and protection by offering a unique platform for generating strong returns. It also provides the advantages of universal life policies in terms of savings and flexibility.
Said Ms Ho Lee Yen, Chief Customer and Marketing Officer, AIA Singapore: "With AIA Platinum Wealth Elite, we solve a quandary for Singapore's affluent by combining the best of wealth management and protection not just for wealth creation, but to future-proof their lifestyles, tapping into our 100-year track record of insuring risks and managing investments across the region to make this a reality."