LIVING TO A HUNDRED

UBS Investor Watch Research discovers Singapore’s millionaires are making financial changes to prepare for ultra-long lives.

An increasingly strong belief that they will live to 100 is driving significant changes in spending, investing and legacy behavior. This is the key finding from UBS Investor Watch, the largest recurring global study of High Net Worth Individuals (HNWIs) in the world, which covers the views of close to 5,000 people globally.

The latest global survey findings highlight how HNWIs around the world are getting prepared for a 100-year life with a focus on health as the top priority. It is heartening to note that many Singaporeans already have a financial plan in place, and are adjusting their investment portfolios in preparation for a longer life span. UBS recommends that investors start wealth planning early and ensure a well-diversified investment portfolio across different markets and asset classes.

Healthcare Outlook

The belief amongst Singaporean millionaires that they will live to 100 is markedly above the current national life expectancy forecast in most developed countries. For many Singaporean millionaires, being healthy is the top priority. In fact, 92% say investing in their health is more important than growing their wealth. The average wealthy Singaporean citizen would sacrifice around a third of their wealth today if it could guarantee another 10 years of healthy life, with investors in Hong Kong and Taiwan echoing the same sentiments.

To prepare for a longer life span, 79% of Singaporean millionaires have a financial plan in place. In general, healthcare costs ranks as a key concern amongst millionaires around the globe. This is similar in Singapore, where two thirds of the country’s millionaires are worried about rising medical costs. As a result, Singapore millionaires plan to allocate 30% of their wealth in retirement to healthcare costs.

Working Culture

Most wealthy investors see work as inseparable from longevity with 85% of Singaporean millionaires believing that work engagement has positive health benefits. At present, 68% of these individuals are working beyond the traditional retirement age or plan to do so. But while work is seen as beneficial, many are also taking steps to balance work with their personal lives, with Asian markets more likely to fare better than other places globally. Asian millionaires, including Singaporeans, have decided to work more sensibly by reducing their working hours on weekdays and stopping work on weekends and holidays.

Investment Behaviour

The 100-year life is also changing investment behavior in Singapore, with 45% planning to adjust their long-term financial plans, and 46% adjusting their spending patterns. In addition, 41% have or will make more long-term investment decisions with equities, bonds and real estate seen as strong areas to invest for the long term. Living to an advanced age is even impacting the way wealthy investors plan their legacy. This process will start earlier, with 51% planning to give more of their wealth away while they are still alive.

As well as recognizing the importance of their own health in relation to their wealth, 87% of Singaporean millionaires say they feel a sense of duty to help the less fortunate members of society stay healthy. They are also acting on this, with 65% having invested in an area of healthcare in order to generate a positive social impact. Compared to other industries, healthcare is seen by investors as the strongest sector to invest in for the long-term.

About The Writer

Hartmut Issel is the Head of Asia Pacific Equities and Credit, Chief Investment Office, at UBS Wealth Management. He started his career at UBS as a buy side analyst for Germany and Scandinavian countries and later assumed coverage of the IT and telecom sectors. From 1999 to 2005, he was in charge of the global IT sector before heading to New York from 2005 to 2006 to build up and lead the North American UBS Wealth Management Research (WMR) unit at WM International. In July 2009, he joined Singapore as WMR head for the location and deputy head of APAC. Hartmut regularly holds investor presentations covering Asia-wide and global topics for events, conferences and one-to-one sessions.

This article was first published in the MilllionaireAsia Issue 48 - June 2018