Global poll of affluent investors reveals attitudes toward risk, perceived threats to wealth, and ideas on responsible investing
The COVID-19 pandemic has led to a k-shaped recovery in Canada and elsewhere in the world, with many differences in experience emerging along lines of wealth and income. But as it turns out, even the impact of the crisis within the high-net-worth space has been decidedly uneven.
That’s according to a global online poll of affluent investors (with an average net worth of $1.6 million) from Canada, Singapore, Switzerland, the U.S., and the U.K. conducted last November by FactSet in partnership with Aon.
Based on the survey, the pandemic has disproportionately impacted affluent women’s perception of their wealth. Because of the volatility in the markets last year, 28% said they have gotten more risk-averse, compared to just one in five men.
Unlike their male counterparts, HNW women said they regard volatility as a primary concern. Around three quarters of female clients also shared a bearish set of emerging portfolio priorities, including managing the risk of unsustainable corporate debt levels (77%), adjusting to a lower dividend environment (74%), and avoiding inflated valuations (74%).
Aside from that, 35% of women said they felt pressured to reduce their daily spend, and HNW women indicated a wider range of worries with respect to their financial plans compared to men.
While HNW investors across all five markets agreed that domestic and international stimulus were positive developments, they had differing views on the threats that lie ahead. For clients in the U.S., the U.K., and Switzerland, low and negative interest rates are the most daunting challenges; those in Singapore are fretting over the changing dividend landscape, while market volatility was the key concern among Canadians.
The survey also found a near three-fourths majority of respondents (72%) wanted to learn more about responsible investing, though the specific areas of interest differed across generations. While millennials paid more attention to operational and reputation risk, supply chain practices, labour treatment, and carbon emissions, Gen-X and Beby Boomers were leerier with respect to governance insights such as management profiles, executive pay, CSR efforts, and political contributions.
The findings also indicated the emergence of a digital divide in the wealth management industry. While 42% of respondents said they experienced no pain points in their efforts to connect online with their advisors, the rest said improvements are needed. Notably, investors who identified as digital laggards were more likely to say that their experience from doing more of their wealth management online has been pain-free (61%) compared to digital followers (48%) or early adopters (22%).
Despite all the differences in experiences, all segments of investors based on tech attitudes reported experiencing the same three issues as they did more online wealth management:
- Harder to maintain a personal relationship;
- Concerns over security of the portal; and
- Concerns over identity theft.