While many wealth managers will tell you Asians are notoriously hands-on when it comes to managing their wealth, a recent global study by HSBC found that more than 60 per cent of Asian respondents who have taken professional financial advice saved more as a result.

The Future Of Retirement 2013 study surveyed more than 15,000 people in 15 markets worldwide, including: Australia; China; Hong Kong; India; Malaysia; Singapore; and Taiwan, aiming to identify people’s retirement needs and the preparations they are making.

While the research did not focus on high net worth individuals, a HSBC spokesperson told this publication: “Quotas were set to ensure that at least a certain number of mass and emerging affluent respondents per country were surveyed."

Findings from the study showed that the majority of Asians (74 per cent) take a self-directed approach in planning, using their own knowledge and calculations. However, the study shows that there is a positive relationship between financial planning and saving levels, particularly evident in Asian markets – 74 and 70 per cent of respondents in China and Taiwan, respectively said the saved more as a result of professional advice.

Meanwhile, 61 per cent in India, 60 per cent in Malaysia, 58 per cent in Hong Kong, and 55 per cent in Singapore said there was a positive link between advice and savings. Interestingly, Australia known for its advanced pensions systems (superannuation) produced the lowest number – with 54 per cent of respondents agreeing they saved more thanks to financial advice.

Cash

Across Asia, people started to save at 27 years old on average, and started to plan for retirement at 29. Cash remains a big part of Asians’ wealth portfolio, the survey found.

“Building up savings for retirement can provide the benefit of diversification and the flexibility to capture growth opportunities in the market as well as to adjust their investment strategy to evolving personal circumstances,” said  Louisa Cheang, group general manager, regional head of retail banking and wealth management, Asia-Pacific, HSBC.

However, she warned that an over-reliance on cash savings may increase the risk of a retirement income shortfall amidst today’s “extremely low interest environment”. Moreover, inflation in emerging markets also remains a real threat to bridge retirement income gap.

Planning early

By 2050, it is estimated that there will be at least one Asian over 65 years old for every four aged 15-64, nearly thrice the number in 2010, according to data from the UN.

“The strong savings culture among Asians is a key advantage but financial planning will help people better prepare for the financial risks associated with growing older,” said Cheang.

Wealth gap

Despite being associated with growing wealth and a rapidly rising number of millionaires, the majority of the Asian population is concerned about retirement prospects - the survey found that Asian estimate their savings to cover only 10 out of the 18 years they expect to live in retirement.

“There is a clear gap between how much people are saving and how much they require to maintain their living standards in retirement,” said Cheang.

According to research, Asian respondents estimate they need nearly $40,000 per year for a comfortable retirement, slightly higher than the global average of around $35,000.

More specifically, the study found that Australians require AUD58,000 (approximately $60,471); China: RMB166,100 ($26,662); Malaysia: MYR76,900 ($24,801); Hong Kong: HKD436,000 ($56,217); India: INR1,116,200 ($20,982); Singapore: SGD60,400 ($48,773); and Taiwan: TWD1,068,600 ($36,120), household income per annum, for a comfortable life beyond working-age.