80 percent of spouses are not aware of the detailed assets and liabilities of their partners, revealed the latest survey by Mudra Portfolio Managers, a global NRI and HNI financial service management company.
The survey was conducted for around 900 High Networth Individuals (HNIs), Non-Resident Indians (NRIs) and Retail clients from India, Africa (Kenya, Nigeria), Singapore, Malaysia and Middle East (Dubai, Abu Dhabi, Kuwait).
The report further stated that 89 percent of respondents had never done a consolidation of their finances, while 73 percent of the respondents had not done a detailed income expense evaluation ever.
The survey covered four important aspects covering a detailed analysis of income and expenses, financial risk assessment, assets and liabilities to analyze asset allocation and liquidity and lastly, ease of access and consolidation of finances. The activity was carried out for a period of 10 weeks.
Interestingly, 65 percent of the respondents were saving less than 20 percent of their salary and out of these, 80 percent of them had their miscellaneous expenses as much as 15-20 percent of their salary, which could have been curbed and saved. This trend was higher in people earning less than Rs 50 lakh per annum, the report said.
The monthly investment to savings ratio in the earning group of Rs 30 lakh and below was found out to be 0.65 which for the earning group of 30 lakhs and above stood at only 0.38 as they prefer to keep more money in the accounts. This shows that the higher income groups usually do not optimally invest on a regular basis in comparison to lower income groups, the survey said.
Under 'Financial Risk Assessment', the survey also shows that 71 percent of the respondents have no health insurance except one provided by their company. Shockingly, the parents of as many as 88 percent of respondents did not have health insurance while the families of 80 percent of respondents were not aware of the details of their insurance cover, Mudra Portfolio Managers said.
In terms of life and term insurance, Mudra portfolio Managers found another alarming trend. 79 percent of the respondents were underinsured while 35 percent did not have a term plan, and 32 percent wrongly believed that they had their lives insured but their insurance cover was less than Rs 30 lakh. Families of as many as 75 percent of respondents were not aware of the details of the insurance cover.
An assessment of 'Assets and Liabilities' under the program revealed that 90 percent of the respondents had a contingency fund equal to 6 months of their salary. 70 percent of the respondents, who had purchased the property in the last 2-3 years, had overstretched themselves resulting in having less than 9 months of annual income as liquidity.
Although loan ROIs have come down to the lowest, still 70 percent were more inclined towards repaying loans instead of maintaining liquidity or making an investment. 78 percent of the respondents had no proper asset allocation. They were overweight in one type of asset, the report said.
When it came to the 'Consolidation of Finances', 89 percent of the respondents had never done their financial consolidation. 80 percent of the spouses were not aware of the detailed assets and liabilities including the account details, while a proper nomination was missing in 54 percent of cases. Through this activity, 35 percent of the clients had forgotten about small chunks of investments done long back, Mudra Portfolio Managers said.