Malaysians need an annual return of 15% to achieve their wealth goal, and want more education on investment and wealth management
The FuturePriority Report – a study conducted by Standard Chartered Bank and Scorpio Partnership which captures the sentiment of over 2,700 Asian affluent individuals across nine markets – has revealed that despite a slight dip in short-term wealth confidence due to an uncertain economic landscape, affluent Malaysians remain confident of in growing their wealth. They have an aggressive target of growing their wealth to close to US$4 million in 10 years. This means they need an annual return of 15%.
This report also reveals that while most respondents see Asia as the region offering excellent wealth creation opportunities, in the longer term they adopt a more international perspective.
Tiew Siew Chuen, Country Head of Consumer Banking, Standard Chartered Bank Malaysia Bhd, said:
“The affluent market in Malaysia is large, growing, and more sophisticated than before. The FuturePriority Report enables us to have a deep understanding of our customers and to fulfil their financial aspirations and needs. This is at the heart of the Bank’s strategy, which is anchored on being customer-focused.”
Confident and Ambitious in Malaysia
Wealth confidence is a defining characteristic of the affluent and a strong majority of Malaysia’s affluent (75%) remain confident of growing their wealth in the next 12 months. Of the nine countries surveyed, India and Indonesia stand out as being the most confident (88% and 98% respectively).
When asked about their specific money goals, affluent Malaysians are seen to be aggressive, aiming to grow their wealth by 15% per annum over the next 10 years as compared to an average of 12% for Asia. While they remain bullish on Asia and Malaysia, respondents also view Europe and North America as offering good wealth creation prospects in the next 12 months.
Wealth Creation – Two Sides of the Coin
In wealth creation, it is important to consider not just investments but also the use of credit. Affluent Malaysians are smart wealth builders (42%) who recognise that they can make use of credit to enhance their investment returns. Borrowing is no longer seen as a liability to one’s wealth; instead, when used carefully, it is a wealth management tool.
Though bullish, Malaysians are conservative investors with a penchant for tangible options, have diversified portfolios and a long-term view. The top choices are gold (50%), high-interest savings (46%), unit trusts/ mutual funds (46%), and real estate (43%), which is higher than their Asian counterparts. They are more likely to consider investing in unit trusts and real estate with 3.6 investment types, compared to the Asia average at 3.3.
Comparatively, direct equities stand out as the top preference for Hong Kong which suggests they are less likely to play it safe compared to the Asia average. Their interest in commodities and derivatives is also higher than high-interest savings.
Strong Desire for Financial Independence
Malaysia’s affluent is mostly driven by the need for financial independence when saving for retirement (after Thailand). Investment property loans featurehighly in their intent in the next 12 months, affirming that 61% of the respondents would consider a home to be a good asset-above and beyond a comfortable place to live.
South Korea’s and Indonesia’s affluent also agree with Malaysia’s that a house would be, a good long-term asset compared to Thailand’s and India’s who consider a house to be reflective of who they are.
Brand, Service and Advice – Hallmarks of a Great Customer Experience
- 1. Education on investment and wealth strategies: 91% expect education on investment, while another 84% expect education on wealth management.
- 2. Technology as the rise of digital platform remains the key channel to obtaining or taking any financial decision or action. 46% respondents foresee increased use of the Internet as a support tool to make investment choices.
- 3. Trusted adviser as 41% of respondents expect more financial advice prior to making any investment choices.
Standard Chartered ’s refreshed proposition for Priority Banking, offering distinctive service, benefits and solutions for customers, as well as growing customer base in Malaysia (20% over the last two years) is testament to the Bank’s strong customer focus.
Grace Chia, General Manager of Priority and International Banking, Standard Chartered Bank Malaysia said “Our Priority Banking strategy is centred on providing distinctive and personalised service where we proactively connect our customers to financial solutions based on their financial needs. This meets the clear expectations of Malaysia’s affluent as seen in the survey. Given our unique proposition, Priority Banking has seen double-digit growth over the yeasr and this trend is expected to continue.”
The Standard Chartered Priority Banking proposition is anchored on three pillars: providing holistic needs-based approach, total relationship recognition and international banking. Its large Relationship Management team of 130 highly trained individuals is supported with the widest range of Specialists covering treasury, mortgage to investment and insurance.
Siew Chuen added, “Malaysia’s affluent have a distinctive and more complex need that cannot be approached with a one-size-fits-all solution. Therefore, to serve this unique segment, banks need to be more focused on their service and quality of their advisory processes instead of their products. As a trusted adviser, it simply means that we are listening to what our customers want and providing them with a holistic approach which includes their families, business and their global ambitions.”