By Gabriel Chen

A NEW survey has laid bare the sobering effects that the global financial crisis has had on retail investors here.

Singapore investors are now a lot more risk-averse and less trusting of financial institutions. In fact, they regard life in general as a riskier proposition.

However, their trust in the Government and media remains strong.

The annual Consumer Attitudes to Saving survey conducted by British insurer Aviva found that 48 per cent of the 1,000 or so Singaporeans polled said they have less trust in financial institutions than previously. Last year, 29 per cent felt that way.

This comes in the wake of the calamitous events of the past year, with the collapse of structured products here linked to Lehman Brothers amid allegations of mis-selling by financial institutions.

Many investors lost most, and in some cases, all of their savings. Many say their confidence in these financial firms was shattered after these supposedly safe instruments they bought turned out to be very risky.

The survey, done earlier this year, found the media here (42 per cent) is more trusted than in the region (30 per cent). The Singapore Government gets a higher rating - trusted by 77 per cent of respondents, compared with a 54 per cent figure in Asia and 26 per cent globally.

In order to protect consumers' interest and rebuild their confidence in the sector, the Monetary Authority of Singapore (MAS) issued comprehensive guidelines on fair dealing, which outline the responsibilities of financial institutions' boards and senior management in delivering five fair dealing outcomes to customers.

It also banned 10 financial institutions from selling similar products for varying periods of time.

Hong Leong Finance, for instance, was given the harshest penalty by the MAS. It cannot sell or advise customers on new structured notes for at least two years.

The survey found that Singaporeans find life in general riskier than before, and are most worried about their health and job security.

About 66 per cent of respondents say that life is 'riskier', an increase from 59 per cent last year.

People here worry most about poor health (23 per cent), followed closely by job security (22 per cent) and the global financial crisis (19 per cent).

The survey also found that one in two Singaporeans regularly sets aside money for retirement, a decline from 58 per cent last year.

'Singaporeans are reeling from the impact of the global financial crisis and have sent out a distress signal for help in planning for their financial future,' said Mr Shaun Meadows, chief executive of Aviva in Singapore and Hong Kong.

'This provides a clear opportunity for financial institutions to take the lead to regain Singaporeans' trust by partnering them in building their financial confidence and helping them to take action on their finances.'

Mr Raymond Ng, chief executive of Ray Alliance, a financial advisory firm, estimates that 60 per cent of Singaporeans are not doing enough planning for their retirement.

'They don't rely on a steady and disciplined investment programme, but instead rely more on their CPF (Central Provident Fund) for their retirement,' he said.

Survey findings

• 66 per cent of Singapore respondents find life riskier, up from 59 per cent last year.
• 31 per cent do not typically save/invest, while one-third have enough savings/investments to cope with the unexpected.
• 48 per cent have less trust in saving providers than they used to, up from 29 per cent last year.
• The media in Singapore (42 per cent) is more trusted than in the region (30 per cent).
• 58 per cent of people here say the most important thing financial institutions can do to increase trust is to offer products which are easier to understand and provide better value for money.

This article was first published in The Straits Times.