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HSBC Bank Survey Finds America’s Mass Affluent See Opportunity in Global Markets, Acknowledge Need for More Information & Guidance
16 February 2011
75% say ability to make the right investments globally comes from local market expertise
New York, NY – As international news continues to hit the headlines, HSBC Bank U.S.A., N.A. (“HSBC Bank”) today released findings on the behavior and attitudes of America’s mass affluent towards global investing.
Issued on behalf of its Premier banking and wealth management service offered through HSBC Securities (USA) Inc. (“HSI”), the survey of those with total investable assets of $250,000 or more, found significant interest in international markets, yet acknowledged a wide gap between interest and actual portfolio allocation. The same gap existed for emerging markets, with 82 percent saying they present a “great investment opportunity,” yet also showed they need more information and confidence about where to allocate funds.
While 66 percent say “investing in global markets is the future of investing,” and 79 percent are optimistic about the growth potential of these countries, this optimistic outlook outweighs their knowledge. As a result, 67 percent say they don’t know enough about these markets to allocate their investments there.
More than four in 10 report a hesitancy to invest in emerging markets (41 percent) compared to two in 10 with developed markets. Additionally, while eight in 10 believe having an experienced advisor is necessary to successfully invest globally, 38 percent are currently relying on themselves to make investment decisions.
There is a very positive trend reflected in the data. Today’s mass affluent investors say they are more aware of events outside the U.S. and are educating themselves on what is happening. Compared to two years ago, 54 percent are paying more attention to international current events and their impact on global markets. A majority (85 percent) agree that current world events influence their investment approach and 34 percent say that learning about investing outside the U.S. is more important to them than it was two years ago.
“The strong interest in emerging markets is very encouraging and makes sense given ongoing news from those regions, the opportunities for diversification and potential long-term growth that these investments can deliver,” said Andrew Ireland, Head of Wealth Management and Premier, HSBC Securities (USA) Inc.
He continued: “But, we’re still seeing a gap between interest and actual global investing, with almost a third of this investor class still having a domestic-only portfolio. This leaves out many of the world’s high growth, emerging economies: the markets that are expected to grow faster than most developed ones over the next few years. Education and understanding are essential and the financial industry must do more to help investors make the most of international growth opportunities.”
Three-quarters of the investors surveyed say the ability to make the right investments globally comes from having local expertise in each market. Added Ireland: “As a leading international emerging markets bank, HSBC Group has a dedicated Premier network in more than 40 countries and territories, providing Premier customers on-the-ground presence and local market insights needed to take advantage of global opportunities.”
Other key survey highlights and behaviors cited include:
- 68 percent say investing in emerging markets is a viable consideration as a long-term equity investment.
- 88 percent want to ensure that a global market is politically stable when considering an investment in that market.
- 75 percent want the potential investment market to have a strong infrastructure in place, along with having a strong currency (77 percent) and experiencing high economic growth (75 percent).
About the survey
StrategyOne, a Daniel J. Edelman company, conducted a 15-minute telephone survey between January 11-21, 2011 among a total of 501 mass affluent respondents. To qualify for the survey respondents had to be between the ages of 25 - 64, have investable assets of $250,000 or more and must take part in the investment decision making process. The total sample of 501 respondents results in a confidence interval of +/-4.4%.
HSBC Bank USA, N.A
HSBC Bank USA, National Association operates more than 470 bank branches throughout the United States. There are over 375 in New York state as well as branches in Connecticut, Washington, D.C., Florida, New Jersey, Pennsylvania, Maryland, Virginia, California, Delaware, Illinois, Oregon and Washington State. HSBC Bank USA, N.A. is the principal subsidiary of HSBC USA Inc., an indirect, wholly-owned subsidiary of HSBC North America Holdings Inc., one of the nation's largest bank holding companies by assets. HSBC Bank USA, N.A. is a member of the FDIC.
Securities are provided by Registered Representatives of HSBC Securities (USA) Inc., member NYSE/FINRA/SIPC, a registered Futures Commission Merchant, a wholly-owned subsidiary of HSBC Markets (USA) Inc. and an indirectly wholly-owned subsidiary of HSBC Holdings plc. Securities products are: Not a deposit or other obligation of the bank or any of its affiliates; Not FDIC insured or insured by any federal government agency of the United States; Not guaranteed by the bank or any of its affiliates; and are subject to investment risk, including possible loss of principal invested.
United States persons (including U.S. citizens and residents) are subject to U.S. taxation on their worldwide income and may be subject to tax and other filing obligations with respect to their U.S. and non-U.S. accounts - including, for example, Form TD F 90-22.1 (Report of Foreign Bank and Financial Accounts ("FBAR")). U.S. persons should consult a tax adviser for more information.
- Neil Brazil
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