Expats in Hong Kong seem to be more open to risky investment but take a more cautious route in the matter of saving and spending, a recent study by Standard Life Hong Kong reveals.

When it comes to making risky investments, expatriates living in Hong Kong seem to be more open to opportunity, despite taking a more cautious route in the matter of saving and spending, a recent study by Standard Life Hong Kong reveals.

In the first "Standard Life Western Expat Wealth Study," Hong Kong-based Western expats are more prudent compared to their counterparts in Singapore and the UAE when it comes to saving money and spending on lavish consumption. On the average, such expats save or invest almost 60 per cent of their disposable income, compared to 57 per cent in Singapore and just 32 per cent in the UAE.

The data may shed light on the kind of asset allocation and strategic guidance on wealth planning that advisors should give to such expats.

On living the high life, just 47 per cent of respondents in Hong Kong said they allocate money to spend on luxury items each month, against 51 per cent in Singapore and 97 per cent in the UAE. 

Despite the tighter fist on spending, however, the survey shows that Hong Kong-based western expats have a higher appetite for risk when investing, with 71 per cent preferring equity investments over the likes of property, 55 per cent, mutual funds, 56 per cent, and gold, 56 per cent. This compares with the 43 per cent who favour equities in Singapore and just 9 per cent in the UAE.

Nearly three in 10 in Hong Kong prefer short-term investments, compared to 10 per cent and 20 per cent in Singapore and Dubai. In making these moves, those in Hong Kong are most likely to seek professional financial advice (35 per cent), compared to 49 per cent in Singapore and 31 per cent in Dubai. 

Given this investment readiness, the study also aptly revealed that 84 per cent of the respondents from Hong Kong believe they will have sufficient income post-retirement, followed by 76 per cent in the UAE and 47 per cent in Singapore. 

"With a long history of open markets and free enterprise, Hong Kong is renowned for being a financially-literate city, so we aren't surprised to see that expat residents are more cautious and deliberate when it comes to financial planning," said Roy Halliday, chief executive for Hong Kong at Standard Life.

"Hong Kong is also one of the most expensive places in the world to live, so it is not unusual for people to think twice before splurging on luxury products and services," added Halliday.

The study was conducted during July to August 2013 on behalf of the company by Insight Discovery and was based on a sample of around 400 western expats with a monthly household disposable income of over $6,500. Seventy per cent of them were from the UK and the rest were from Australia, New Zealand, France and Ireland.