74% of Gen Ys have specific saving goals while only 27% have concrete saving plans.
A survey commissioned by HSBC revealed that Generation Y (Gen Y) are concerned about their future financial prospects and are looking for expert guidance on financial matters. In response to these findings, HSBC launched a unique financial portal specifically designed for Gen Y, the first bank in the territory to do so.
Francesca McDonagh, Head of Personal Financial Services in Hong Kong, said: "Contrary to popular perception, the research findings show Gen Ys to be solid individuals with clear financial goals and a strong sense of responsibility. However, Gen Ys are concerned about their financial prospects and want financial control over their lives but worry they can't or don't know how to achieve their goals."
The survey explored the perceptions of 1,100 Gen Y, Gen X and Baby Boomers towards banking and wealth management. Gen Y, born between 1980 and 1995, will replace Gen X as Hong Kong's largest working population by 2020; accounting for 24 percent of the territory's total population. HSBC's research shows that Gen Ys have clear life-goals but are in need of financial advice and guidance to achieve them. They are concerned about their future prospects, their career and their ability to make money.
Gen Y's financial goals
The research revealed Gen Ys' strong sense of responsibility surrounding saving, investments and plans for the future. A total of 74 percent of Gen Ys had specific three-to-five year saving goals but only 27 percent of Gen Ys had a concrete saving plan.
Gen Ys' top five saving goals include:
Interestingly, further education was a major saving goal for Gen Y students. Once Gen
Ys started working, however, their main goal switched from further education to purchasing a property.
Attitudes towards financial planning and wealth management
Research findings revealed that Gen Ys are concerned about financial planning and wealth management. Ninety-three percent doubted their ability to accumulate enough wealth to achieve their financial goals and only nine percent admitted they have sufficient wealth management knowledge. Seventy-one percent declared their current savings to be low and not enough to start investing.
Saving and investments
Gen Ys start investing at the age of 21, earlier than Gen X (aged 26) and Baby Boomers (aged 30). On average, 33 percent of Gen Ys' income is allocated to savings and investments. Post-university, 76 percent will start saving and 73 percent will start investing. The most popular first-time investment products include Hong Kong securities (30 percent), IPOs (28 percent) and unit trusts (21 percent). Interestingly, 40 percent of Gen Ys believe that investing in securities is the best way to save.
The results showed that Gen Ys are looking for guidance and advice to help them realise their financial goals. Sixty-three percent of Gen Ys wanted guidance and support on spending and wealth management. The top three areas for guidance included: how to control spending; how to save effectively; and how to start investing.
Gen Ys rely on parents, friends, partners and bank consultants when making decisions related to investment and wealth management. Twenty-two percent of Gen Ys give money to their parents to invest for them. Worryingly, the survey also found that 44 percent of Gen Ys' parents (Gen Xs and Baby Boomers) never or rarely discuss savings and investment plans with their children. In fact, 25 percent of Gen Y parents admitted experiencing problems when discussing financial matters with their children.
Gen Y worry more about their career prospects than the previous generation. Sixty-two percent are worried about finding a job and are concerned about the competition within the job market (vs Gen X 46 percent). Seventy-three percent of Gen Ys are unsatisfied with their salary (vs Gen X 48 percent) and over half (53 percent) believe that they have insufficient educational qualifications (vs Gen X 32 percent). Gen Y job starters (58 percent) were much more worried about their level of qualifications compared to Gen Y students (38 percent).
Ms McDonagh said: "The results show that Generation Y is a generation that is concerned about their financial prospects. They are saving from a relatively young age but are worried that they won’t be able to achieve their financial goals. Gen Ys are looking for financial help and guidance. To address these issues, we have launched Hong Kong’s first financial portal specifically designed for Gen Y to give advice on financial matters in a lively, interactive way."
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