Singapore is renowned for its thriving economy and high standard of living, but how financially resilient are its people? The Sun Life Asia Financial Resilience Index, a survey conducted across eight major Asian markets, including Singapore, in late 2023, sheds light on this question and reveals interesting insights into the state of financial planning in Singapore.
Wealth and financial resilience
of Survey results found While 65% of Singaporeans are more positive about their financial future compared to last year, only 23% have financial plans looking out over a five-year period or more. This disconnect between optimism and long-term preparedness highlights a significant gap in Singaporeans’ financial planning.
Interestingly, even among the wealthiest respondents, many Singaporeans are unprepared and underestimate their spending levels and the benefits of long-term financial planning.
The survey revealed that 52% of high-income earners spend more than their monthly budget and that few make long-term plans, with 24% planning more than a year ahead and 19% planning more than five years ahead.
A survey by Sun Life Asia found a gap between Singaporeans’ financial optimism and long-term preparedness.Source: Sun Life Asia Financial Resilience Index
The need to lead and educate Millennials
Singapore’s Millennials are financially secure, with sufficient investable assets, fewer family obligations than older groups, and a balance of adventure and knowledge to build for their financial future. appears to be the most resilient generation in the world.
The survey found that 75% of millennials are more confident in their ability to achieve their long-term financial goals than older age groups, 27% are more likely to have a financial plan in place for five or more years, and 71% are more financially resilient than older age groups, and they manage their finances from month to month.
The survey also found that trust and emotional awareness play a major role in financial behavior, with 42% of respondents saying it influenced their financial decisions. Additionally, 39% of respondents cited financial education as a key desire, highlighting the need for better access and expert assistance in financial management.
The Role of Wealth Management Tools in Financial Planning in Singapore
This is where wealth management tools such as Endowus, Kristal.ai and StashAway play a key role in helping Singaporeans better plan their financial future. These digital platforms offer a range of investment options, financial planning tools and educational resources to help users make informed decisions about their money.
One of the main benefits of wealth management tools is that they can provide individualized investment strategies tailored to your personal financial goals, risk tolerance, and time horizon.
Millennials are the most financially planning generation in Singapore. Source: Sun Life Asia Financial Resilience Index
Platforms such as Endowus and StashAway use sophisticated algorithms to analyze users’ financial profiles and create customized investment portfolios designed to maximise returns while minimising risk.
for example, Endus Offering a globally diversified portfolio that is regularly rebalanced to ensure optimal performance, stash away To adapt to changing market conditions, we use a proprietary investment framework called Economic Regime-Based Asset Allocation (ERAA).
By leveraging these sophisticated investment strategies, users can receive professional-level investment without paying the high fees typically associated with traditional financial advisors, a drawback for young investors, especially millennials. You can benefit from asset management.
In addition to investment management, wealth management tools also offer a range of financial planning features that help users take a more holistic approach to their finances.
How financially resilient are Singaporeans compared to other Asian countries? Source: Sun Life Asia Financial Resilience Index
Education and Insight Reveal Financial Planning Literacy
Another key role of wealth management tools is to provide users with the education and insight they need to make informed financial decisions. Sun Life’s survey found that 39% of respondents cited financial education as their main desire, highlighting the need for accessible and engaging learning resources.
platform like crystal StashAway focuses on investor education, offering a wealth of articles, videos, and webinars covering a wide range of financial topics, from the basics of investing to more advanced concepts like portfolio diversification and risk management.
Trust and emotional awareness play a major role in financial behavior, with 39% of respondents citing financial education as a key desire. Source: Sun Life Asia Financial Resilience Index
These tools demystify the financial world by empowering users with the knowledge and understanding to enable Singaporeans who are just starting out on their financial planning journey to better manage their financial future.
Accessible and convenient financial planning in Singapore
Traditionally, one of the biggest barriers to financial planning and investing has been accessibility. Many people are intimidated by the complex terminology and high minimum investment requirements associated with traditional financial services.
But wealth management tools have democratized access to professional investment management and financial planning, making it easier and more affordable for individuals to manage their finances.
Platforms like Endowus, Kristal.ai, and StashAway feature mobile apps and user-friendly interfaces that allow users to manage their investments and track their financial progress on the go from anywhere in the world. This level of convenience and accessibility has been a game-changer for many people, especially younger generations who are more comfortable with digital technology.
In Singapore, even high-income earners have flaws in their financial planning.Source: Sun Life Asia Financial Resilience Index
Joint Financial Planning in Singapore
Finally, wealth management tools play an increasingly important role in facilitating collaborative financial planning between individuals and their loved ones. This collaborative approach to financial planning can be especially valuable for couples and families working toward common financial goals, such as saving for a home or planning for retirement.
By providing a shared platform for communication and decision-making, asset management tools help align everyone’s expectations and enable all parties to work together toward a common goal.
By leveraging these wealth management tools, Singaporeans can take a more proactive approach to financial planning and build greater resilience in the face of economic uncertainty. Whether it’s setting long-term financial goals, creating a budget or investing in a diversified portfolio, these platforms provide the resources and support needed to make sound financial decisions.
The Sun Life Asia Financial Resilience Index highlights the importance of financial planning in Singapore and the need for stronger financial education and access to expert advice. Singaporeans are generally optimistic about their financial future, but there are clear gaps in long-term preparedness even among high-income earners.
Wealth management platforms like the ones mentioned above can help bridge this gap by providing users with the resources and support they need to build financial resilience and achieve their long-term financial goals.
Featured image credit: Edited from freepic
