When it comes to saving money, Indians are a diligent bunch, but many of them rarely feel inclined to get professional advice for financial and retirement planning.
A study by Standard Life released on Sunday showed that while the average UAE-based non-resident Indian (NRI) sets aside 70 per cent of their disposable income for investment and saving, majority of them would rather seek the opinion of their relatives instead of professionals when managing their money.
The study among 300 NRIs showed that 44 per cent of respondents depend on family members for financial advice. Among those who turn to the experts for guidance, 21 per cent choose NRI financial advisers, 18 per cent rely on their bank and 10 per cent turn to non-NRI advisers.
Financial experts have time and again highlighted the value of financial advice. With the cost of living as well as education rising every year, it is more important than ever for consumers to let experts guide them on how to manage, save and invest their money wisely.
Standard Life said in its report that the results of the study only indicate that trust is a major consideration for Indians when dealing with financial advisers.
“It is really interesting to see that many NRIs trust family members instead of professionals when seeking expert advice for financial planning,” said Chris Divito, CEO of Standard Life Limited, Dubai International Financial Centre branch.
Strong savings ethic
Divito noted that Indians have a “strong savings ethic”, with two-thirds of them allocating between 50 per cent and 90 per cent of their disposable income towards savings and investments.
“If this pro-savings approach were to be supplemented with expert advice, then they could reap the benefits of professional financial planning for a more secure future,” he added.
Standard Life had noted in its earlier study that there are major gaps in NRIs’ financial and retirement planning. Most Indians in the UAE, according to the study, expect their children to look after them when they get older, and they don’t invest in formally constituted retirement savings plans.
About two out of eight NRIs (82 per cent) have two to five people relying on them for money, while more than half have three or four financial dependents. The overwhelming majority (90 per cent) see a huge chunk of their earnings spent on children’s education.
While the scope of their financial obligation is so big, most NRIs (75 per cent) tend to overlook the value of securing a worry-free future, saying that they expect their children to look after them in retirement.