WEALTHTECH & TRADING: RETIREMENT PLANNING
An age-old problem and how to solve it Could the world’s first public/private attempt to give everyone access to all their financial information help Singapore avoid pensioner poverty? Evy Wee, Head of Financial Planning & Personal Investing at DBS believes it’s a big step in the right direction
At night, downtown Singapore hums with the chatter of the affluent. Crisp shirts and clicking heels swagger between Michelin-star eateries and five-star hotels, schmoozing or boozing along the light-strung mouth of Marina Bay. And, watching silently over this nightly carousel of canapés and cocktails are the buildings of the world’s biggest banks, the odd office still glowing with the labour of the late-to-leave. It’s a scene that epitomises the country. Since achieving independence in 1965, Singapore’s open-door policy towards global financial institutions has generated a colossal amount of wealth. In terms of GDP per capita, the island nation is consistently rubbing shoulders with Luxembourg and Norway, inside the global top 10. Singaporeans earn on average six times more than Malaysians living on the other side of the Johore Strait, and 16 times more than their neighbours in Indonesia. Despite this, individual Singaporeans know financial hardship. With space on the island at a premium, housing prices are astronomical; the cost of living is high and rising. And, like other mature economies, Singapore is fast approaching its senior moment, with the country’s median age set to rise from 35.6 in 2020 ffnews.com
to 53.4 in 2050. It’s a looming problem that Europe knows all too well: a greater burden on the state and young workers, and a rise in old-age poverty. Between 2012 and 2015, poverty in Singapore increased by 43.45 per cent. For the older population, that figure was 74.32 per cent. The country’s retirement policies aren’t helping: the statutory retirement age is 62, and employers routinely coerce older workers into leaving early. Adequate financial planning, well ahead of Singaporeans’ silver years, could help the country escape a looming crisis. That’s the opinion of Evy Wee, head of financial planning and personal investing at DBS (Development Bank of Singapore). Born in Malaysia, Wee is no stranger to financial hardship herself, having watched her parents’ home taken away from them when she was a teenager. “I literally just ate carbs for almost every meal during my first three years at DBS,” she says. “That was when I became more disciplined with my money, because we really had a single-minded focus to get the house back. I really learnt the value of money and the importance of saving and gaining financial freedom.” For many young Singaporeans, financial planning starts and ends with buying an apartment in one of the many high-rises. That’s a feat most only achieve after marriage, when they become eligible for state hand-outs designed to boost the country’s fertility rate and smooth that senescent upward curve. Investing and saving for the long-term, as DBS research found, isn’t on their radar. “In Singapore, people aren’t underbanked, they’re undeserved, lacking awareness of the need to plan,” says Wee. “And we’ve learned about some blind
spots in customers’ behaviour. For example, people would be spending a lot of money trading on a platform, but with a horizon of zero years. “On the back of Robinhood and Freetrade, many younger consumers, as well as customers who may not have a tonne of money, started investing with us through the digiPortfolio, which we integrated into the bank in 2019. It’s where they can buy equities from different stock exchanges,” says Wee. Following the launch of those features alone, DBS saw a doubling of customers starting to invest. Today, digiPortfolio is rated in the top three investment apps, after Stashaway and Syfe. It encourages low-risk, long-term investments, which feel neatly opposed to the bullish bravado of in-vogue trading apps.
Issue 23 | TheFintechMagazine
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