The survey of 150 financial advisors in Hong Kong and 150 financial advisors in Singapore (2,400 advisors globally) shows volatility in the market is the leading challenge to the growth of their businesses.
The five mistakes Hong Kong advisers identify as the most likely to be made by investors are making emotional investment decisions (75%), focusing on short-term market noise and changes (75%), failing to have a financial plan (63%), not setting clear financial goals (48%) and not staying on course (44%), according to the survey.
Advisors in Hong Kong expect only 0.5% growth in their annual revenues over the next 12 months, compared to 12.3% globally and 18% a year ago, according to the survey.
More than half of the advisors in Hong Kong (55% vs 60% globally) said they will suggest their clients shorten the duration of their bond portfolios and 45% said they would recommend reducing bond holdings as rates are anticipated to rise (46% globally). Two out of five advisors (43%) will increase allocation to stocks (46% globally). More than one-third (32%) will increase allocations to alternative assets (37% globally).
While stocks and bonds are still valuable for a portfolio, 83% of Hong Kong advisors (versus 77% globally) agree traditional portfolio allocations - consisting of 60% stocks and 40% bonds - isn’t the best way to pursue returns and manage investment risk. More than two-thirds (68%) of Hong Kong advisors believe that there is a need to replace traditional diversification and portfolio construction techniques (63% globally).