Wealth manager St James's Place Asia has released a new study which looks at how affluent HongKongers and Singaporeans aged 25 to 64 approach wealth creation and intergenerational wealth transfer.

A new study launched this week by St James's Place Asia finds that more than half of Singaporeans and Hongkongers do not have or do not believe in having a wealth transfer plan.

The study, entitled Accelerating the Wealth Journey – From Stability to Abundance, looks at 2,000 affluent Singaporeans and Hongkongers categorised across five different levels of wealth – financial stability (ST), financial security (SE), financial flexibility (FL), financial freedom (FR) and financial abundance (AB) – and how they approach areas such as wealth creation and intergenerational wealth transfer.

For as many as 83 per cent of Singaporeans and Hongkongers, it is important to them that the next generation protects and grows their wealth, with 37 per cent saying that this is very important, the study finds. However, Singaporeans and Hongkongers remain split in terms of when they believe intergenerational wealth transfer should take place. The largest portion believe this should begin when a family member has retired, followed by when a family member is deceased, while they are still living and working and 13 per cent believe this should never happen.

More than half of Singaporeans and Hongkongers do not have or do not believe in having a wealth transfer plan, the study reveals. Only 26 per cent have already started transferring wealth to the next generation. Less than half of Singaporeans have a formal will in place, a slight dip from last year. This is more pronounced in Hong Kong, with 17 per cent of Hongkongers having a formal will in place.

Oliver Wickham, Asia partnership director, SJP, said: “Intergenerational wealth transfer can have a profound impact on the long-term financial wellbeing of families. We believe that maintaining and transferring wealth across generations is beyond the finances but more about preserving legacies and the dreams of future generations.” 

“Effective intergenerational wealth transfer requires thoughtful planning and it is crucial that professional financial advisors with deep understanding of the complexities involved as well as market conditions and regulations are brought to the table in order to navigate the journey successfully,” he continued.

Financial wealth 
The study comes at a time when rising costs of living continue to be a pressing issue for Singaporeans and Hongkongers. It shows that more than half of Singaporeans and Hongkongers do not consider themselves to be financially wealthy. Overall, only 41 per cent of Singaporeans and Hongkongers are happy with their level of wealth, with 46 per cent saying that they would like to be wealthier, and 14 per cent believing that they are too wealthy.

When asked which areas the respondents would be willing to make sacrifices to generate more wealth over the long term, more than half (52 per cent) have expressed spending on luxury items, followed by work-life balance (45 per cent). When it comes to the third area that most are willing to sacrifice, 42 per cent in Singapore are willing to sacrifice family time, while 38 per cent in Hong Kong choose to sacrifice their hobbies and interests, the study reveals.