According to the Global Investment Survey 2015 by Legg Mason Global Asset Management, it was found that:
- The majority (63%) of investors in Singapore, compared with only 22% globally, are not progressing with their goal of “avoiding depending on others in retirement.”
- Almost half (45%) of the respondents expressed they are very or somewhat lacking confidence that their CPF savings can help meet their retirement goals.
- The rate of return Singapore investors achieved is also the lowest in the region at 5.4%, compared to Hong Kong (6.3%), China (8%) and Taiwan (7.3%).
- Almost half (45%) of the respondents work with a financial advisor as compared to 35% in 2014.
- Singapore investors prefer to invest in their home market with only 78% of Singapore investors holding international investments. This is compared to 90% of Hong investors and 89% of Taiwan investors holding investments internationally.
Source: Legg Mason Global Investment Survey 2015
My comments:
Once again, this survey tells us that many Singaporeans are not taking action in having a financial plan because without a financial plan, it is not possible to have a goal – such as avoiding depending on others in retirement.
Despite the lack of retirement plan, a large number of people lack confidence in their CPF. It is strange as to why people feel they lack confidence and yet do not act to do something about it.
In terms of investment experience, Singaporeans are behind their Asian counterparts on two fronts.
First, Singaporean’s rate of return was the lowest despite an increase in number of investors seeking consultation with financial adviser. Perhaps they sought consultation on insurance but not investments!
Second, Singapore investors have a strong home bias compared with its more savvy counterparts. With home bias and single country concentration risk, many Singaporeans are taking significant amount of risk in their investments.
If the survey results describe you, it is time to act and have a financial goal by having a diversified portfolio instead of one with strong home bias.
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As I said many many times before, Sinkies retirement plan is based on “how much pocket money can my kids give me??”. This is true whether you are 30 yrs old or 70 yrs old. Whether you dare to say out loud, or too paiseh.
Even PAP recognised this fact, and came out with the Parents Maintenance Act many years already liao.
Only the top 25% income earners can safely achieve financial independence before employers tell them to get lost. (Provided they don’t gamble it away, or make other bad financial choices)
Trusting a financial adviser & insurance for your retirement is like trusting a helmet will save your life when riding a motorcycle at 150kmh.
Biggest reason is expensive, i.e. cost to you. Easily 50%-60% of the underlying par fund returns are kept by the insurance company instead of giving to you. Why?? Coz this pays for their profits and to reward their salesmen. E.g. Par fund earns 6.4% returns in 2014 — but gives you only 2.5% bonus.
Trusting an insurance salesman is like keeping a snake in your chicken coop to take care of your chicken, bo see masee see. What do they know about retirement planning? They are retirement product peddlers. All their products have negative real return.
My advice to consumers , keep your CPF close to your chest and follow what is recommended by CPF to transfer your OA to SA periodically to earn risk free 5% and 6% after 55. Remember, very few or NONE of the insurance endowments earns marginally more than the OA account…Don’t let the insurance conmen and women con you into buying these scam endowment products. Come June, the Singapore Saving Bonds will earn better than any endowment without the crappy lock in and liquidity risk..
If they tell you that they can invest for you ask them whether they have a CFA….distinctly and emphasize that CFA is NOT the tikam tikam CmFAs which my pets , cats and dogs can pass one… (Incidentally, one of my dogs is applying to be licensed as a “Financial Consultant”)
Consumers. it serves you well to pay heed to the postings here.
Often people lament “now not even enough to spend, where comes the funds for retirement”.
These people are likely to think things will work out eventually when the time comes …