- Almost all (97%) UAE based western expats spend some of their disposable income on luxurious lifestyle choices, compared to 51% in Singapore and 47% in Hong Kong
- Fewer (31%) UAE based western expats seek financial advice, when compared to Singapore (49%) and Hong Kong (53%)
- Majority (71%) of Hong Kong based western expats prefer equity investments, followed by 43% in Singapore, but only 9% in the UAE
UAE based western expatriates are seen to be less prudent than those in Singapore and Hong Kong when it comes to financial planning – this aspect is hugely interesting as most respondents became expatriates due to financial factors, according to the first Standard Life Western Expat Wealth Study. Standard Life is a leading long term savings and investments company, offering retail investors a wide range of funds and other products through financial intermediaries.
The report studied the saving, spending and investment behaviour of approximately 400 western expats across the UAE, Singapore and Hong Kong. With 97% spending some of their disposable income on luxurious lifestyle choices, 31% seeking professional financial advice and only 9% allocating towards equity investments, the report revealed that UAE based western expats have a less prudent approach towards financial planning. In comparison, spending on luxury lifestyle choices among respondents was much lower in Singapore (51%) and Hong Kong (47%), while there was a greater number seeking professional financial advice in Singapore (49%) and Hong Kong (53%).
Chris Divito, CEO, Standard Life International Limited (DIFC Branch) commented: “Saving and spending behaviour can be varied with locations and demographics, but it is clear that most become expatriates due to financial factors. Most western expats move to high earning, tax friendly cities with the intention to save and secure their financial future. To avoid any pitfalls, it is always advisable to take professional financial advice for long term savings, investments and retirement planning.”
The study also revealed that preference towards equity investments were significantly higher in Singapore (43%) and Hong Kong (71%), in comparison to the UAE where it was only 9%. However, a large number of UAE (70%) respondents invested in mutual funds, as compared to 67% in Singapore and 56% in Hong Kong. Consequently, many in Singapore (66%) and Hong Kong (56%) preferred to invest in gold, as opposed to only 15% in the UAE. While, property investments were most popular amongst Singapore (78%) respondents, followed by Hong Kong (55%) and the UAE (48%).
Chris Divito added: “It is seen that investors in more developed capital markets like Hong Kong and Singapore had a higher allocation for equities than upcoming markets like the UAE. Nevertheless, expatriates have international mobility when it comes to savings/investments and it really boils down to the quality of financial advice and choice of products they are getting. We are investing in this research to understand our western expat customers better, so that we can offer them the right financial solutions across different locations and jurisdictions.”
The study further revealed some interesting numbers about retirement provisioning – a high number of respondents in Hong Kong (84%) believe they will have sufficient income post retirement, followed by the UAE (76%) and Singapore (47%). It was also found that a fewer number of UAE (35%) respondents will return home after retirement, in comparison to 90% in Singapore who intend to go back home.
Chris Divito concluded: “Many of the responses reflect demographics and market attributes. The belief about sufficient retirement planning amongst UAE respondents is quite interesting as this group was found to have the least inclination for savings. There could be a mismatch between aspirations and realities or income and expenditure. This is increasingly evident as we can see that fewer UAE respondents rely on professional financial advice. Retirement planning is critical and we would strongly suggest a prudent approach for financial security in your golden years.”
