Wealth managers must mirror concerns of Asia’s ‘bubble tea’ generation

Retirement planning, health insurance and digital access to investments are all major concerns of Asia’s affluent investors, according to HSBC.

Asia’s affluent class is still not ready for legacy and retirement planning despite more willingness from younger generations to invest, according to a new survey.

Affluent individuals, those with $100,000 to $2m in investable assets, in Asia are facing a mountain of pressure, as four in 10 people across all generations say they are off track with retirement plans, according to HSBC’s Quality of Life survey.

While eight in 10 affluent individuals globally find it essential, only three in 10 in Asia have created a will or succession plan.

This is cause for concern. As an $82tn wealth transfer is set to take place over the next couple of decades, legacy planning looms large.

According to the survey, the Asian cohort faces several key issues with their retirement preparedness. Rising living costs are an issue globally, with 68 per cent saying they are concerned about them.

Inflation is also on the minds of the affluent, with 61 per cent saying it is reducing the value of their savings.

“This situation reflects a broader trend of under-preparedness across the region, where even wealthier individuals can struggle to balance immediate financial demands with long-term goals,” says Lavanya Chari, global head of investments and wealth solutions at HSBC Global Private Banking and Wealth. “Cultural priorities, such as supporting family members and maintaining substantial cash reserves for emergencies often take precedence over personal financial planning.”

These “cultural priorities” typically help shape legacy planning. “In many Asian societies, families may be less comfortable about discussing wills and legacy planning, leading to hesitancy in making formal arrangements,” says Ms Chari. She adds that many individuals prefer to pass on wealth during their lifetimes, creating gaps in structured planning.

Individuals also have “misconceptions” about the cost and effort of creating a will or succession plan, deterring people from planning. “Many people believe these processes are prohibitively expensive, highlighting the need for greater awareness of options and support available to them,” she says.

There is a “lack of understanding” regarding importance and benefits of early legacy planning, as many are unaware of “legal complexities” that can arise without a formal plan. This often leads to “procrastination”.

Longer lifespans

HSBC’s survey reveals 38 per cent of affluent globally say having sufficient insurance coverage is a top financial goal – up from 31 per cent in 2023 – but 23 per cent still do not have adequate healthcare protection. In Hong Kong, the figure climbs to 29 per cent.

In Asia, one in four Gen Xers, born between the mid-1960s and late1970s, believe they lack adequate health coverage, compared to one in five Gen Z – born between the late 1990s and early 2000s – and Millennials.

“Given the reality of longer lifespans and the desire to age healthily, affluent individuals in Asia are adapting their financial planning by focusing on more integrated approaches that balance wealth accumulation with protection needs,” says Ms Chari. She believes this is a “positive development”.

In their investments, they are “gradually moving away” from holding large cash reserves and exploring more diversified, longer-term solutions complemented by tactical, shorter-term investments to “make their cash work harder” and “improve portfolio resilience”.

Additionally, as awareness of the relationship between health and wealth increases, Ms Chari sees increasing interest in protection solutions as an integral part of a well-rounded wealth portfolio.

Accessible investments

And the next generation of affluent individuals wants to join this trend of wealth accumulation. According to the survey, Gen Z and Millennials start investing up to a decade earlier than Baby Boomers, invest 27 per cent of their income on average, and monitor portfolios more frequently.

Ms Chari believes this is an “exciting” development in financial services, in which HSBC has introduced a range of entry-level products designed to “ease” younger investors into the stockmarket and make investing “more accessible”.

For instance, HSBC’s Trade25 initiative in Hong Kong allows individuals aged 18 to 25 to trade equities at minimal cost, “equivalent to that of a bubble tea”.

Ms Chari says the bank recognises how “tech savvy” the younger generations are, leading it to roll out a suite of mobile tools “to facilitate digital investment account opening, unit trust investments, and portfolio tracking – all at the touch of a finger on a mobile device”.