This is despite the report showing that those who want self-control are less likely to be satisfied with their financial situation. The report, ‘Risk and Rules: The Role of Control in financial decision making ., is based on a global survey of more than 2,000 HNWIs, and provides an in-depth examination of wealthy investors from a behavioural finance perspective.
It considers the different financial personality traits that exist amongst wealthy investors and the different self-imposed rules and strategies that they put in place to deal with these traits.
It shows that “emotional” trading can cost investors up to 20 per cent in returns over a ten-year period and the report shows that those who employ high strategy usage have on average 12 per cent more wealth than those who do not use rules.
Globally, respondents in Asia-Pacific have the greatest desire for more financial discipline, particularly in Taiwan and Hong Kong. In contrast, developed markets show less of a desire for self-control over financial behaviour, as illustrated by respondents in Spain, Australia and the US.
In the Middle East, HNWIs show complex behaviour toward investing and financial decision-making. In the kingdom of Saudi Arabia , HNWIs revealed a tendency to purchase illiquid assets to avoid the urge to sell investments when markets fall — 90 percent of respondents report this.
Saudi HNWIs also prefer to use rules and guidelines to help them make better financial decisions, with 96 per cent of respondents saying that they use rules in financial decision making.
On a regional level, Saudi HNWIs are inclined to set financial deadlines (96 per cent) and have a high tendency to delegate financial decisions to others (90 per cent). In the UAE, there is also a willingness to delegate financial decisions (82 per cent).
Respondents in the UAE also favour setting financial deadlines for themselves (96 per cent) and over three quarters (76 per cent) think that buying and selling often will enable them to do well in the financial markets.