A new survey of affluent to ultra-high-net worth (UHNW) investors has shown that those in the UK are amongst the most conservative in the world – and the most likely to be relying on their financial adviser.
In the survey from fintech Avaloq, more than half (54 percent) of UK respondents rated themselves as conservative in terms of their approach to risk, with 20 percent describing themselves as very conservative.
Only 10 percent said they take an aggressive approach to risk – the lowest of any nation surveyed. In contrast, almost half (45 percent) of respondents in China said they were aggressive in terms of risk, with just 19 percent saying they were conservative.
Avaloq surveyed 1,430 affluent-to-UHNW investors in May, all of whom had at least $250,000 invested. The markets were Switzerland, Germany, France, the United Kingdom, China, Hong Kong, Singapore, Japan, Australia, and India. Avaloq also analysed aggregated and anonymised end-client data, stored by banks and wealth managers using Avaloq systems in EMEA.
Respondents in the UK also stood out for the relatively high use of financial advisers and planners, with around a third (29 percent) saying they use them, the highest of any of the nations surveyed.
While a high proportion of individuals (72 percent) said they also manage their own investments, this is still the second lowest globally after France (65 percent). In addition, one in seven (14 percent) of UK respondents reported they use a robo-adviser to manage their investments.
In terms of asset classes and underlying investments, affluent investors in the UK show little appetite for exposure to complex structured instruments, on a comparative basis.
According to Avaloq’s study, they have one of the highest allocations to investment funds (cited by 56 percent) though use of ETFs is the lowest of any nation at just 11 percent. In addition, more than half (53 percent) say they hold investments in cash.
Despite a high number of UK respondents stating they have a low-risk approach to investing, almost a quarter (23 percent) said they have exposure to cryptocurrencies in their portfolios – showing some understanding of emergent investment opportunities and, possibly, a need for advisory support.
The UK figure was in the middle in terms of respondents from other countries, with wealthy investors in India the most invested in cryptocurrencies (49 percent).
John Wilson, managing director of the UK and Ireland at Avaloq, said he believed the study shed a light on the opportunities for wealth managers.
“The clear interest in cryptocurrencies should also be seen, we firmly believe, as a strong opportunity for financial institutions to expand their service offerings,” he said.
To view the full report, please visit this link here.
