Rich Hongkongers invest for extra income and future personal healthcare: report

Affluent Hong Kong residents also invest through discretionary portfolio management.

Wealthy Hongkongers are more likely to invest for more income and save money for their future personal healthcare costs, an Avaloq study showed.

The report also found that the majority of affluent Hong Kong residents (61%) are tapping discretionary portfolio management, which means they hand over their full decision-making power to a financial adviser. This was followed by advisory services (57%).

“It is worth noting that DPM is more popular with investors in markets with a more mature wealth management industry, such as Switzerland, Hong Kong and Singapore,” read the statement.

More than a third (35%) of rich Hongkongers surveyed also said they are fairly aggressive with investment activities. 

Wealthy Hong Kong residents (64%) also invest in stocks the most followed by investment funds (56%), and cryptocurrency (50%).

Private banks are under increasing pressure to provide income-focused investment options due to the current volatile economic environment, said Avaloq.

"This pressure stems from geopolitical tensions, energy crises, and supply chain disruptions, which have created uncertainty in the investment landscape. While bonds have traditionally been a reliable source of consistent income, rising interest rates have introduced volatility and concerns about higher default rates," according to Martin Greweldinger, Co-CEO of Avaloq.

Consequently, Greweldinger added that financial institutions are increasingly offering alternatives like dividend-paying stocks and income-oriented alternative investments to meet client income needs and stay competitive in a challenging market.

The survey conducted an online poll of 3,000 investors aged 18 and above, with 500 each from Germany, Switzerland, the UK, Hong Kong, Japan and Singapore (500 respondents per market).

More than half (57%) of the respondents are wealthy, with assets ranging from US$250,000 to above US$1m. Whilst 37% fell in the high net worth (HNW) segment (with investable assets of USD 1 million to USD 50 million) and 6% within the ultra-high net worth (UHNW) bracket (with investable assets above USD 50 million).