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Securing multi-generational wealth: How to diversify and protect your portfolio amid market volatility

The Covid-19 pandemic has left a lasting impact on the global economy and the lives of many. As countries in Asia recover from the crisis, various trends and shifts in wealth planning strategies across Asia have emerged as individuals and families navigate the post-pandemic era.

Increased focus on risk management 

In an era marked by advancements in medical, technology and scientific breakthroughs, humanity found itself grappling with a newfound sense of vulnerability and the sudden contemplation of mortality. This prompted a wave of introspection among individuals and families, prompting them to re-evaluate their financial circumstances and their wealth planning needs.

The pandemic was a wake-up call for many regarding the need for succession planning. More people than ever understood the importance of having adequate protection – for themselves and their families. As Covid-19 became endemic, individuals and families increasingly recognised the need to take proactive steps to structure their assets and develop strategies for the seamless transfer of wealth to future generations.

In a report by Capgemini, the transfer from Asia’s High Net Worth Individuals (HNWI) / Ultra High Net Worth Individuals (UHNWI) to the next generation by 2030 is estimated to be US$4.4 trillion (S$5.9 trillion) of wealth. The great wealth transfer presents not just opportunities in economic growth, entrepreneurship, philanthropy, but also shines a spotlight on challenges like wealth disparity and the need for responsible wealth management. Without careful handling, this vast wealth can sometimes pave the way for lavish lifestyles, financial recklessness, a sense of entitlement, and a loss of direction. Hence, it is crucial to establish family governance frameworks. These structures help ensure that wealth transfers between generations occur seamlessly, promote open communication and safeguard cherished family values for years to come.

Growing demand for diversification and insurance 

The Covid-19 pandemic has had a profound impact on investment portfolios across sectors and asset classes, presenting challenges to investors everywhere. Measures implemented by governments and central banks to soften the pandemic’s economic blow led to new uncertainties. In the past 15 months, we saw global interest rates rise at an unprecedented rate since 1950 in an attempt to tame rising inflation, and in just ‌five days in March this year, we witnessed banking failures of not one, but three small to mid-size US banks.

In these unpredictable times, there’s a rising demand for diversified portfolios. Asian investors, in particular, are broadening their horizons, seeking options beyond traditional asset classes to spread their risk. Many clients are progressively viewing life insurance solutions as an alternative asset class in portfolio diversification. Whole of life and savings plans are favoured as they provide a combination of high underlying guarantees and insurance coverage, offering a level of stability that is appealing amidst market volatility.

In recent years, there has been a notable rise in the interest among clients in Asia towards Indexed Universal Life plans. These plans offer investment returns that are linked to the performance of an index such as the S&P 500, a widely recognised benchmark for the US stock market. This unique feature has captured the attention of investors seeking to combine both insurance protection with potential returns tied to the performance of the stock market.

One of the key appeals of Indexed Universal Life plans is the ability to participate in the potential upside of the index while also having a built-in “downside protection” feature.  This downside protection element provides a level of security unlike any insurance or investment solution, making Indexed Universal Life plans an attractive proposition and adding an alternative dimension to overall portfolio diversification and wealth planning.

Prioritising sustainability and ESG

Environmental, Social, and Governance (ESG) considerations have gained prominence in the wake of the pandemic. Clients are becoming more conscious of the impact their purchasing decisions can have on the environment and society. There is an increased inclination to support companies that align with their own values and are able to demonstrate a commitment to sustainability, social responsibility, and ethical practices.

Post-pandemic, we have also observed a heightened social awareness and desire to give back to society. As a result, there is a growing interest in philanthropy and impact investing among Asia’s affluent individuals and families. Clients are keen to align their values with their wealth by incorporating philanthropic goals into their overall wealth planning strategies.

Insurers can play a crucial role in the wealth planning journey by staying abreast with changing trends, actively listening to clients and business partners and understanding their concerns. Only by putting the client at the centre of what we do, are we able to co-create innovative insurance solutions together.

Supporting the evolving wealth planning needs of High Net Worth Individuals

Sun Life is a global leader in asset management, wealth, insurance and health solutions with a strong AA financial rating from S&P* – the highest rating among life insurance companies in Singapore.

As a market leader and pioneer of High Net Worth insurance in Asia, Sun Life is able to provide the insurance solutions you need to ensure your financial security for generations to come.

SunBrilliance Indexed Universal Life

A new flexible plan by Sun Life Singapore that’s indexed to the S&P 500,and designed to give you a good balance of lifetime coverage and high potential growth to leave a legacy for your loved ones.

Customising wealth planning strategies for High Net Worth Individuals 

Sun Life Singapore’s partners share how the life insurance company has helped them meet the wealth planning needs of HNWIs 

“Since the start of the pandemic, our world has faced a string of public health, geopolitical and economic challenges. These turbulent years have raised an awareness of the importance of proper wealth planning for HNWIs and their families. As the pioneer in this field with over five decades of experience, our team of wealth planning expert advisors at Charles Monat understands how important it is to deliver bespoke wealth planning solutions to meet the unique intricacies for every HNWI. We are delighted to partner Sun Life Singapore in serving this segment and are excited that they continue to innovate and deliver new bespoke solutions relevant for the HNWI.”

Nikki KohChief Executive Officer SingaporeCharles Monat Associates

“As Asia’s economy continues to expand rapidly, wealth planning matters for private clients are getting more sophisticated. Our longstanding partnership with Sun Life Singapore enables us to deliver top-tier life insurance-based solutions. Whether it involves safeguarding wealth, managing estates and inheritances, or facilitating intergenerational wealth transfer, Sun Life Singapore has always been able to come up with solutions to meet the diverse needs of our clients in the region.”

Benjamin ChengChief Executive Officer AsiaIPG Financial Services

“Future proofing your legacy starts now. Market volatilities have prompted HNWIs to re-balance their investment portfolios to achieve diversification beyond traditional asset classes. SunBrilliance Indexed Universal Life permits clients to incorporate life insurance solutions as an alternative asset class to benefit from potentially higher returns from long-term equities exposure. Underpinned by high underlying guarantees and coverage offering stability, this appeals to HNWIs planning for succession amidst market volatility. PCS by Mercer, being the world’s largest and pioneering HNW broker firm, is delighted to build on the strong partnership with Sun Life Singapore that has spanned  close to two decades.”

Davin WongChief Executive Officer SingaporePrivate Client Services by Mercer

Visit this website for more information.

This article is contributed by Michael Wei, chief partnership & marketing officer at Sun Life Singapore.

Important information:

1 These may not be exhaustive and are not tailored to any particular person. Financial Advisors should advise clients according to their needs. Please refer to Policy documents. 

2 Lifetime coverage applies if Net Cash Surrender Value minus loan amount is not less than zero. 

*As of March 31, 2023

This article contains information and the views and thoughts of persons that are true and correct as at the time it is published. Sun Life Singapore has no obligation to update you of any information, view or thought that may subsequently change, and Sun Life Singapore is not responsible for any loss or detriment that results from sole reliance on the contents of this article. This article is not tailored for any particular person and it is not, and does not amount to, any solicitation or promotion of any products or services. Before entering into any investment or buying any insurance or other product, you should take independent legal, tax, financial or other advice as you may deem fit for your own circumstances.

Buying a life insurance policy is a long-term commitment. An early termination of the policy usually involves high costs and the surrender value payable (if any) may be less than the total premiums paid. This information advertisement is for general information only and does not take into account the specific investment objectives, financial situation or particular needs of any specific person. You should seek advice from a financial adviser regarding the suitability of the policy before making a commitment to purchase. In the event that you choose not to do so, you should consider whether the product in question is suitable for you. This information advertisement is not a contract of insurance. Please refer to the policy contract for the exact terms and conditions, specific details and exclusions. Protected up to specified limits by SDIC. This advertisement has not been reviewed by the Monetary Authority of Singapore. Information is correct as at September 2023. 

Sun Life Assurance Company of Canada is an insurance company federally incorporated in Canada, with OSFI Institution Code F380 and its registered office at 1 York Street, Toronto, Ontario, Canada M5J 0B6. It is regulated by the Office of the Superintendent of Financial Institutions, Canada. Sun Life Assurance Company of Canada Singapore Branch (UENT19FC0132B) is registered with the Accounting and Corporate Regulatory Authority of Singapore as a foreign company, with its registered office at One Raffles Quay, #10-03 North Tower, Singapore 048583. It is licensed and regulated by the Monetary Authority of Singapore. Where Sun Life Assurance Company of Canada Singapore Branch is referred to as “Sun Life Singapore”, this is strictly for marketing and branding purposes only, and no legal significance is expressed or implied. Sun Life Assurance Company of Canada is a member of the Sun Life group of companies. The Sun Life group of companies operates under the “Sun Life” name. Sun Life Financial Inc., the publicly traded holding company for the Sun Life group of companies, is not a product offering company and is not the guarantor of the obligations of its subsidiaries.

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