If nothing else, the last two years has taught affluent investors and financial professionals that change is often unexpected, swift and brutal. But despite taking severe double-digit losses on their portfolios, affluent investors surveyed recently by HSBC still largely have the same portfolio allocations they did at the onset of the financial crisis in 2008.

In February and March, HSBC surveyed 2,044 affluent respondents in 11 major cities around the world. Americans suffered the worst losses, with 56% of those respondents saying the value of their portfolios had decreased. They did worse than the well off in Paris, 55% of whom said they lost money; Toronto (46%), London (45%) and Sydney (37%).

Yet in January 2010, affluent investors around the globe said mutual funds accounted for 25% of their portfolios, individual stocks took 17%, cash products stood at 16%, retirement products edged up to 14% and real estate investments were unchanged, at 10%. Compared with 2008, those standings were largely the same. Mutual funds accounted for 27% of their allocations, individual stocks 20%; cash or money market funds 14%; retirement products 13%; and real estate investments 10%.

“No one had touched their portfolios since the end of 2008,” said Neil Brazil, vice president of public affairs for HSBC. “This is a chance for advisors to speak to their clients, and get them to take an active role in managing their portfolios.”

And while investors are shaking things up, perhaps they could add some creativity to their new holdings, too, especially those in North America. American and Canadian respondents had the heaviest weightings in mutual funds with 32% and 37%, respectively. But affluent investors in other cities had more diversification in their holdings. In Hong Kong, 28% of investors said they had put their money in individual stocks, and 6% said they had money in collectibles like art, fine wine and coins. In Sydney, 26% of affluent respondents said they had their money in real estate; while 19% of Parisian respondents said they bought whole life insurance.

“If Americans look at what others around the world are doing,” Brazil said, “maybe they could take a broader view and look at other asset classes.” 

Interestingly, HSBC’s survey found that only 35% of respondents cited the economy in general as the biggest issue facing the world, following 38% who cited climate change and environmental issues. But since the survey was done, a fiscal crisis has engulfed Greece, menaced the Eurozone, and there are growing fears that it could pose problems for other European economies.

“The world is always changing and I would expect that opinions would also shift accordingly,” Brazil said.



Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access