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NEWSLETTER | 10 Jun 2021  

Young investors, risky crypto and post-pandemic investing

This week was all about looking forward to the factors that will shape post pandemic wealth management, firstly with a focus on a new generation of investors: the under 25s. 

Advisers are becoming increasingly concerned about how to deal with younger clients. A survey by investment wealth manager PortfolioMetrix has revealed that adapting to manage the needs of those aged younger than 25 is becoming a concern for 26 per cent of advisers, while 24 per cent are concerned about compliance requirements and pressures, and 23 per cent worry about unprofitable clients. 

Young people themselves should be worrying about their future finances, research from Purely Pensions shows with their future pensions potentially becoming collateral damage of the Covid-19 pandemic. The negative financial impact of the crisis led younger individuals to seek ways of maximising their take-home pay – which for many meant they chose to stop making pension contributions, explains Matthew Amesbury, Head of Pension Advice. However, choosing not to begin saving early on means many could miss out on tens of thousands in savings by the time they reach retirement age. Purely Pensions shows that a 22-year-old starting to save now while working would reach retirement age with a pension pot valued at GBP170,733 – but if the same individual waited until they were 27 to save, that same pot would only be valued at GBP149,679.  

One may think that investing in cryptocurrency is a young person’s game – yet research from financial platform Stake showed that 70 per cent of the under 35’s remain wary of investing in crypto. Stake’s survey also revealed a general investor wariness towards digital currencies, with 84 per cent of investors seeing it as a riskier form of investing than other methods, and nine in 10 traders favouring stocks to cryptocurrency. Stake CEO Matthew Leibowitz says that investors are increasingly looking for proxy exposure to cryptocurrency, rather than investing directly in the currency itself. 

Just as digital currencies are likely to remain an ‘extra’ investment rather than a portfolio mainstay, digital solutions are expected to enhance, not replace, human advisers in the post-pandemic financial services landscape. A paper titled ‘Reimagining financial advice’ published by Ignition and Altus Consulting indicated that hybrid advice seems to be the way forward. Sam Turner from Altus Consulting says: “Pure digital advice remains a challenging proposition to deliver profitably – the initial hype around so-called ‘robo-advice’ seems to have cooled.” 

Finally, post-pandemic investing will be shaped by ESG considerations. A quarter of UK investors plan to make ESG investments by 2025. A survey by Butterfield Mortgages Limited reveals that 24 per cent of UK investors surveyed made ESG investments in the past year, and 21 per cent plan to make an ESG investment in the coming 12 months. Thirty er cent of investors are willing to accept lower returns on an investment if it has a positive social or environmental impact, and 60 per cent want to see investment providers become more transparent about the environmental impact of assets. 

Wealth Adviser

Managing younger clients giving cause for concern, says survey
Wed | 9 Jun 2021, 09:55
Adapting to manage the needs of younger clients is a concern for over a quarter (26 per cent) of financial advisers, according to a new survey by investment manager, PortfolioMetrix.
Young people that fail to save into a pension because of the Covid crisis could miss out on thousands in savings by retirement age
Mon | 7 Jun 2021, 15:04
Purely Pensions, a specialist in pension advice, complex retirement planning and defined benefit transfer advice, has uncovered that many young people starting work in the wake of the crisis who may have chosen not to begin saving towards their pension, could miss out on tens of thousands in savings by the time they reach retirement age.
Cryptocurrency still deemed risky by young investors, research shows
Tue | 8 Jun 2021, 13:54
New research has revealed that 84 per cent of investors believe that cryptocurrency is still a riskier form of investing than other methods, with nine in ten traders favouring stocks to cryptocurrency. The platform has also revealed the key stocks that react to the movements of cryptocurrency including Coinbase and MicroStrategy. 
Digital solutions to enhance, not replace, human advisers in post-pandemic financial services
Tue | 8 Jun 2021, 09:48
Ignition, a global provider of advice technology, and Altus Consulting, specialist provider of consultancy services to the financial services sector, have launched a blueprint for improving the use of digital capabilities in the financial advice market. 
A quarter of UK investors plan to make ESG investments by 2025
Fri | 4 Jun 2021, 09:18
Environment, social and governance (ESG) factors are playing an increasingly important role in the decisions of UK investors, new research by Butterfield Mortgages Limited (BML) has found.
Global ETF launches 03-10.06.21
Thu | 10 Jun 2021, 13:30
Crypto launches took centre stage this week, with CoinShares listing bitcoin, ether and litecoin ETPs on Borse Xetra. 21Shares also launched a UK bitcoin ETP on Aquis Exchange, designed to provide institutional investors with secure and cost-effective exposure to the cryptocurrency. ESG launches were also popular, with iClima Earth listing the world’s first ESG UCITS ETF providing exposure to companies promoting the decentralisation of energy generation. State Street Global Advisors also launched three new SDPR ETS focusing on companies with steady dividend growth and a good ESG profile. Funds also focused on Europe, with a new Lyxor ETF on Xetra giving investors access to fixed-income and euro-denominated eurozone government bonds, and the Polish WIGtechTR ETF listed on GPW providing investors with exposure to the top 49 stocks listed on the Warsaw Stock Exchange. KraneShares has it's sights set on the Far East meanwhile with the Bloomberg Barclays China Bond Inclusion ETF which tracks Chinese RMB-denominated securities. Finally, it was all bout biotech for WisdomTree, with the of listing the WisdomTree BioRevolution Fund (WDNA) offering diversified exposure to a basked of companies positioned at the intersection of biology and technology.

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