Wealthy Hong Kong investors want better financial self-control

Seventy percent of Hong Kong high net worth individuals (HNWIs) wish they had greater financial self discipline, compared with a global average of 41%, according to a new report from Barclays Wealth.

Based on a global survey of more than 2,000 wealthy investors, the Insights report showed some contradiction in how Hong Kong respondents view themselves. Although the majority reported that they tend to choose investment tools that they perceive as being safe, including cash and real estate, more than half (57%) identified themselves as financial risk takers.

Globally, respondents in Asia Pacific have the greatest desire for financial discipline, particularly in Taiwan and Hong Kong. In contrast, respondents in developed markets, including Spain, Australia and the US, show the least desire for more self-control over financial behaviour.

The report also revealed the pitfalls of “emotional trading”, which can led investors into buying high and selling low, and which the report days can cost investors nearly 20% in lost returns over a ten-year period.
Globally, a third of those polled (32%) say that trading frequently is necessary to get a high return, however these respondents are over three times more likely to believe they trade too much.

In Hong Kong, nearly half of respondents (46%) believe they need to buy and sell often to achieve strong performance in the financial markets and 64% show a lack of composure when it comes to financial decision making.

Peter Brooks, behavioural finance analyst, Asia Pacific at Barclays Wealth says: “The report shows that there are significant links between the desire for discipline, the use of decision making strategies, financial satisfaction and the level of wealth. If wealth advisers can help their clients achieve a disciplined approach to investing, then the benefits could be advantageous.”