Digital banking and wealth management technology provider Avaloq published results this week of a survey – "The Five Dimensions Of Investor Behaviour" – which looks at investment trends and behaviour amongst investors in Europe and Asia, with a focus on Singapore.

A new study by digital banking and wealth management technology provider Avaloq reveals that Singapore investors are some of the biggest risk-takers compared with their global peers.

The survey was conducted over February and March 2023, showing responses from 3,000 mass-affluent, high net worth and ultra-high net worth investors from Germany, Hong Kong, Japan, Singapore, Switzerland, and the UK. The firm said that 500 of the respondents were investors in Singapore. 

Investors in Singapore, seeing opportunities in the volatile market, are willing to tolerate more risk in the hopes of higher returns in the long run, the survey shows. Over the past year, the proportion of Singapore investors with an aggressive risk approach has grown from 17 per cent in 2022 to 32 per cent in 2023, it states. Among the Singapore investors included in the survey, 12 per cent stated that they have a very aggressive risk approach, compared with the global average of 7 per cent. 

Despite wealth managers recent tilt towards bonds, the survey found that stocks and equities remain the most popular asset class (55 per cent) for Singapore investors in 2023. Nevertheless, Benjamin Melman, global chief investment officer at Edmond de Rothschild Asset Management, said last week that they continue to be overweight in bonds compared with equities. See more here about wealth managers tilt towards bonds. 

Meanwhile, 40 per cent of investors in Singapore opt for foreign exchange – the highest across the Asian markets surveyed by Avaloq. Even with tightening regulation and increased scrutiny on digital, crypto (29 per cent) is still a popular investment choice for Singaporeans, the firm said. In the case of digital assets, secure and regulated access to investment and custody solutions will remain key for wealth managers seeking to address investor demand. 

When asked how they invest, most Singapore investors continue to use professional advisory services, while retaining full control over their investments. Discretionary portfolio management (DPM) has experienced a marked increase in interest among the Singapore investors included in the survey – from 32 per cent in 2022 to 53 per cent in 2023. At the same time, preference for online brokers has fallen from 50 per cent in 2022 to 36 per cent in 2023.

When asked about their motivations for investing, Avaloq’s survey revealed that wanting additional income was cited as the top reason, followed by costs for younger generations, entrepreneurial activities and funding property purchases. Investors in Singapore also are inclined to give back to society, with 26 per cent of them investing to fund their charitable donations – more than the 19 per cent that do so globally. 

“Singapore is a mature wealth management market where investors understand the need to sometimes accept higher risk in exchange for long-term returns. Private banks and wealth managers need to leverage their position of trust to help guide investors through the current challenging market environment, with comprehensive advice and tailored solutions,” Pascal Wengi, managing director for Asia Pacific, Middle East and Africa, said. 

“We also see a strong opportunity for financial institutions in Singapore to support growing investor demand for discretionary portfolio management services, based on a flat-fee model rather than transaction-led revenue,” Wengi added.

In the survey, 57 per cent of respondents were mass-affluent (with investable assets of  $250,000 to $1 million) while 37 per cent fell within the high net worth segment (with investable assets of $1 million to $50 million) and 6 per cent within the UHNW bracket (with investable assets above $50 million).