Charles Schwab: Hong Kong's Rising Affluent Investors Keen on Diversification

May 31, 2018 — 11:15 AM EDT

Affluent investors in Hong Kong are keen on diversification when it comes to their investment portfolios, with an eye toward international markets. That's according to a new survey by Charles Schwab Hong Kong, which polled 2,000 Hong Kong and U.S. rising affluent investors and found that close to 80% of Hong Kong respondents said they are willing to diversify their portfolio, including in the markets outside of their local one. What's more, Hong Kong rising affluent investors want to learn more about diversification than their U.S. counterparts.

The survey from The Charles Schwab Corporation (SCHW) found that Hong Kong's rising affluent investors are two times more likely to make international investing a priority in the next five years compared with their U.S. counterparts. They pointed to real estate investments as one of their long-term investment goals. Of the survey respondents, 76% from Hong Kong want to diversify internationally, with 60% thinking their portfolio has enough diversification. Rising affluent investors in the U.S. are more confident, with 80% signaling that they have enough diversification.

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"Unlike the rising affluent class in the United States, Hong Kong investors are more eager to invest internationally and diversify their portfolio," said Michael Fong, managing director at Charles Schwab Hong Kong, in a press release highlighting the research report. "However, there is a gap in finding appropriate and reliable investment advice from financial experts. Their high expectation of return is also not aligned with their investment attitudes."

According to the survey, while Hong Kong rising affluent investors are interested in investing overseas, they are hesitant to make the leap. What's more, while 45% of survey respondents classified themselves as "steady" investors, they tend to be more aggressive in their investment targets, Schwab found. Of Hong Kong survey respondents, 47% have short-term financial goals that are focused on doubling investment yields, with 58% signaling that they are facing increased pressure to support elderly parents or family members.

When it comes to tapping the help of financial advisors, Hong Kong rising affluent investors are reluctant on that front too, with only 34% of survey respondents working with an advisor. In the U.S., the percentage of survey respondents that work with an advisor is 60%. What's more, 78% of Hong Kong rising affluent investors think they are more knowledgeable than a financial advisor.

"We believe the distrust is a clarion call to Hong Kong's financial advisors," Fong said in the press release. "However, the strong appetite of rising affluent for obtaining trustworthy information when they make investment decisions reflects a growing opportunity for investment experts and financial advisors to close the gap and take concrete steps to provide reliable information and advice to this group of people."