Surveys
Mind The Gap: When Wealth Expectations Don't Fit Reality

One of the most important tasks for wealth managers is helping set realistic goals for clients, sometimes telling uncomfortable truths about what's attainable for the level of risk and work a person is comfortable with. This report sheds light on how expectation "gaps" can be wide indeed.
A study of 10,000 affluent individuals in countries ranging from
China to the United Arab Emirates shows, perhaps unsurprisingly,
that people’s lifestyle hopes don’t match up with the amount of
wealth they are likely to have when they reach 60.
The Wealth Expectancy Report 2019, from Standard
Chartered, examined savings and investment habits in China,
Hong Kong, India, Kenya, Malaysia, Pakistan, Singapore, South
Korea, Taiwan and the UAE.
Nearly six out of 10 people face a “wealth expectancy gap” of 50
per cent or more. This highlights the difference between the
wealth that individuals with disposable income to save and invest
can expect in retirement, and what they say they need to live
comfortably.
Such surveys shine a harsh light on how a vital task for wealth
advisors is helping to frame clients’ expectations realistically.
In an age of ultra-low or even negative interest rates, market
volatility and expanding human lifespans, old assumptions of what
people need to retire on are being torn up.
Even with a global average wealth expectancy of more than $1
million, most are at risk of not being able to afford the
retirement lifestyle they aspire to. The problem is most acute
among the emerging affluent: with an average wealth expectancy of
$420,000, 62 per cent will fall short of their aspiration by at
least half.
For the affluent with an average wealth expectancy of $821,000,
more than half (53 per cent) face a wealth expectancy gap of 50
per cent or more. Some 46 per cent of the high net worth
individuals will not meet their aspiration by at least half, at a
global wealth expectancy of $2,022,000.
Some 59 per cent of respondents in this study rely primarily on
savings accounts to achieve their top three financial goals,
potentially missing out on higher-return investment solutions to
drive up their wealth expectancy. Only 37 per cent use stocks or
equities and only 36 per cent invest in mutual funds or unit
trusts, showing that available wealth management options are
significantly underutilised.
While retirement is among the top goals people are working
towards, funding their children’s education is the highest
priority for savers, with 28 per cent putting this as one of
their top three financial goals.
This is followed by investing in property (23 per cent),
retirement (20 per cent) and establishing or funding their own
business (20 per cent), the survey said.
Digital access is making wealth management simpler and more
accessible. At 61 per cent, most savers believe that being able
to manage their investment products online has given them the
confidence to invest in products that they would not have
considered previously. Forty per cent use their bank’s website or
mobile app, while one-third use online investment portfolio apps,
online-only banks and online stockbrokers to help them meet their
financial goals.