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High net worth individuals in Singapore are becoming more adventurous in ways to grow their wealth along with their Asian counterparts.

Instead of relying on fixed income, more money is now being channelled into high risk and high return investments.

This was revealed in the latest World Wealth Report by Merrill Lynch and Capgemini on Tuesday in New York.

Singapore had about 55,000 individuals last year with net investable assets of at least US$1 million.

They formed 1.3 percent of the population but this was still 13.4 percent more than in 2004.

The World Wealth Report says healthy economic growth and strong market performance helped drive wealth creation for these individuals.

Kong Eng Huat, Managing Director, Merrill Lynch Global Private Client Group, said: "The Singapore investor is very much like an Asian investor who would be keen on the property, the real estate market. But we have also noticed that they are also sophisticated and tend to go into private equity and alternate investment as well."

These alternate investments, such as structured products, private equity and managed futures, tend to give greater returns and hedge against market volatility.

The study found that high net worth individuals are also more global in their outlook.

Almost a quarter of them have residences overseas and adult children living abroad.

Investment advisors say the challenge is in finding a balanced investment portfolio in both the matured and emerging markets.

But with some 65 percent of these wealthy individuals over 56 years old, the advisor role is becoming more complex.

Petrina Dolby, Wealth Management Specialist, Capgemini Financial Services, said: "What we're finding now is that the role of the investment advisor, as we look towards this generational transfer, is changing because we have different demands. So the advisor is now having to become more a mediator within the family to help manage across multiple generations. It's one of the areas that is keeping a lot of advisors awake at night."

Looking ahead, the report suggests that high net worth individuals will continue to focus their investments in emerging markets in Asia Pacific and Latin America.

The downside though is that with interest rate expected to rise over the next few years, economic growth will slow down, and this will directly affect the ability of these individuals to grow their wealth.

Globally, based on a 6 percent growth, the total wealth of high net worth individuals is forecast to increase from US$33.3 trillion in 2005 to US$44.6 trillion by 2010.

The combined wealth of high net worth individuals from Asia rose 8 percent to US$7.6 trillion last year.

The population of such individuals swelled to 2.4 million in 2005, up 7.3 percent on year. - CNA/ch