Date: February 18, 2016
Only one in eight Singaporeans feels strongly confident that he will achieve his financial life goals and one in ten agrees that he is very knowledgeable in financial matters
Singaporeans consistently rank in the bottom three among 19 markets on confidence in their financial strategy and know-how, despite Singapore being Asia’s top financial hub and the fourth most competitive financial centre in the world.[1] This, together with Singapore’s expected slowing growth for the rest of the decade[2] and the global uncertainty, starkly highlights the importance for Singaporeans to start planning for their long-term financial security.
| At the same time, Singaporeans show strong interest in financial planning to get on track financially, found a recent survey released by Financial Planning Association of Singapore (FPAS) and conducted by, Financial Planning Standards Board (FPSB), the owner of the international CERTIFIED FINANCIAL PLANNER certification program outside the U.S.
The critical missing link between action and intention: Not knowing whom to trust. Steven Ong, Chief Executive Officer, FPAS, said, “Today’s weak economy and uncertain global outlook make it crucial for us to carefully evaluate our financial strategies to ensure that we safeguard our assets for the future. As most people start to review their finances in the new year, there’s no better time than now to reinforce our financial strategies and place ourselves in a good position to achieve our financial goals.”
Some key findings from the survey:
Strong interest in financial planning Overall, Singaporeans are conscious of the need to manage their finances so they can plan for the future and pursue their dreams.
Financial professionals are most valued by Singapore respondents for creating personalised long-term plans (54 per cent) and being a trusted source of advice (54 per cent), followed by helping to simplify and explain financial matters (53 per cent) and providing peace of mind (53 per cent). 58 per cent are interested in retirement planning services, 48 per cent in investment planning services and 42 per cent in budgeting, cash flow and debt management help, higher than global averages (50 per cent, 38 per cent and 36 per cent respectively). While retirement planning is seen to be the most helpful financial planning service globally, this is of slightly greater interest to middle-aged and older consumers. Younger consumers are more interested in budgeting, cash flow and debt management. This late interest in retirement planning among Singaporeans is consistent with the findings from a 2014 retirement survey by DBS, which found that those who have started planning for their retirement did so at age 28 while those that have not started planning yet expect they will do so when they are 38.[3] Key to turning the tide on low financial confidence: Trust Greater trust in the financial planning industry is needed to turn the tide on the low financial confidence among Singaporeans. More than seven in 10 (72 per cent) Singaporeans agree that they do not know whom to trust, highlighting the top barrier to financial planning. Singaporeans rely most on their trusted friends and family for financial matters and planning (53 per cent), followed by financial planners (45 per cent). One third of Singapore respondents (34 per cent) are unsure whether financial planning is regulated and 15 per cent believe it is not, which may contribute to the lack of trust. The CERTIFIED FINANCIAL PLANNERTM certification The CERTIFIED FINANCIAL PLANNERTM certification, known among 42 per cent of Singaporeans, is one such example. The survey found that CFP® professionals earn higher percentages of “excellent” ratings compared with other financial professionals on multiple dimensions including honesty and integrity (44 per cent vs 31 per cent), personalised service (38 per cent vs 24 per cent) and prioritising clients’ interests (32 per cent vs 21 per cent). On average, clients working with CFP®professionals spend more than 1.5 times as much time with their financial planner in any given year.
“We are pleased that the rigorous qualification criteria and courses for the CFP®certification, which entail background checks and strong financial knowledge, have led to greatly increased client satisfaction and financial confidence. We will continue working to uplift the financial industry through continual investment in trust-building initiatives to improve Singaporeans’ financial confidence and build a secure future for all,” Steven added. Singaporeans working with CFP® professionals also express greater financial confidence. 24 per cent agree that they are very successful in sticking with their financial strategies, 23 per cent are strongly confident that they will achieve their financial life goals and 19 per cent consider themselves knowledgeable in finance and financial matters, compared with 12 per cent, 13 per cent and 12 per cent respectively among those working with other financial professionals. The survey was conducted from June to July 2015 across 19 markets, where 19,092 adults, including 1,001 from Singapore, with primary or shared responsibility for household financial decisions were interviewed. Find out more here: http://fpas.org.sg/fpsb-gfk-global-survey-result-singapore/ [1] Global Financial Centres Index 18, Z/Yen Group Limited (2015). Available at: http://www.longfinance.net/publications.html?id=953 [2] Singapore settles for slower growth for rest of decade, The Business Times (2015). Available at: http://www.businesstimes.com.sg/government-economy/singapore-settles-for-slower-growth-for-rest-of-decade [3] Retirement Planning in Singapore, DBS Bank (2014). Available here: https://www.posb.com.sg/iwov-resources/pdf/retirement/retirement_report.pdf
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