Affluent individuals are looking to gain wealth for financial security amid concerns about the rising cost of living and their future health, HSBC’s Quality of Life report has shown.

The report sought views from wealthy individuals from around the world on their priorities, plans for retirement, wealth accumulation strategies, and legacy planning.

It found that 46 per cent of affluent people were seeking financial security as a top priority, while 44 per cent cited planning for retirement and 39 per cent cited supporting their family financially.

However, they also pointed to the rising cost of living and health concerns as the main threats to their life goals.

HSBC assessed respondents across four financial planning pillars: Healthcare protection, wealth accumulation, retirement, and legacy planning.

Only 19 per cent of affluent people planned for all or most of their financial needs holistically, known as ‘power planners’.

Those who were proactive in their financial planning reported 50 per cent more satisfaction with their quality of life.

Legacy planning

While people tended to excel in planning for their healthcare needs, they “fell short” when it came to addressing their legacy.

This was evident by the fact that despite eight in 10 affluent individuals believing planning for their legacy was relevant to them, only four in 10 had written a will.

The report found consensus that legacy planning goes beyond financial and material considerations, with respondents saying that passing on values was an important objective.

Nearly half (45 per cent) planned to start the process of transferring their assets during their lifetimes, while around 37 per cent stated they will transfer their assets primarily on their passing.

Younger generations were found to be more likely to include charitable giving in their legacy plans.

Investment trends

Millennials were embracing investing, starting earlier, and investing more, the report stated.

Two in three Millennials were wealth accumulation ‘power planners’, “far higher” than older generations, while they also believed they needed less money to start investing and were more engaged as investors once up and running.

They also tended to build more diversified portfolios and show a relatively high interest in alternative assets, including private markets.

Portfolio diversification was on the rise globally, according to HSBC, with a third of affluent investors in major international wealth centres saying they needed to invest more outside of their home market.

Affluent investors were found to have at least two trend-based themes in their portfolios as part of their wealth accumulation plan, with sustainability and tech themes dominating.

Retirement and health planning

Despite a growing awareness of the need for adequate insurance, HSBC highlighted that there was still a protection gap, with nearly a quarter of affluent individuals feeling insufficiently protected against healthcare costs.

Ensuring adequate protection through insurance was a top priority amongst Millennials, Generation X, and Baby Boomers, the report noted.

When asked about their retirement planning, HSBC found that three in 10 Baby Boomers were off track to meet their retirement goals.

Furthermore, four in 10 affluent individuals across all generations felt they were off track with their retirement plans, despite nearly eight in 10 knowing what they needed to meet their retirement goals.

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