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Wealthy Investors Want More Guidance, Say Virus Creates Permanent Change

Tom Burroughes

14 July 2020

Three quarters of wealthy investors polled by recently said they think that life will be changed permanently because of the coronavirus pandemic, with Latin Americans being most convinced of that view, compared with Swiss individuals who are more ambivalent.

Significantly for the wealth management industry, the UBS study found that 83 per cent of investors wanted more guidance than usual from their financial advisor during the pandemic.

The Swiss bank surveyed more than 3,750 investors who were made up of 25-30 year olds with at least $250,000 in investible assets, 31-39 year olds with at least $500,000 in investible assets and those persons aged 40 or above with at least $1 million in investible assets. The global sample was split across 15 markets: Argentina, Brazil, mainland China, France, Germany, Hong Kong, Italy, Japan, Mexico, Singapore, Switzerland, Taiwan, the UAE, the UK, and the US. The research was conducted in May.

The survey found that seven in 10 people will cut travel and trips to the office; half of them intend to move closer to their families; 46 per cent may forsake living in cities for less populated areas and 88 per cent said staying healthy is their top priority. Some 67 per cent of investors said the pandemic has affected how they think about their money.

The findings showed that 56 per cent worry about not having enough saved if there is another pandemic; 58 per cent feared they may have to work longer to make up for retirement losses; 60 per cent fretted about being a financial burden to their family if they get sick and 54 per cent think they might not leave enough money for the next generation. 

In an answer that could suggest a change in risk appetite, the survey showed that 81 per cent of respondents said a “sense of fear” will remain for a long time.
 


Regional breakdowns
Asia-Pacific investors in the region are less likely than average to predict permanent changes because of the virus and to see fears persisting over the longer term. However, 89 per cent of them say they did want more guidance than usual from their financial advisor during times of market uncertainty, versus a global average of 83 per cent.

In Singapore, 200 HNW investors participated in the survey. Seven in 10 plan to travel less. 64 per cent plan to move closer to family. Forty-one per cent plan to move to less populated areas. Some 90 per cent say staying healthy is their top priority. Some 88 per cent of Singaporean investors say that they see volatility as an opportunity, compared with 82 per cent of Asian investors.

 

From a generational perspective, Millennial investors surveyed were more inclined to say that the pandemic affected them financially and were more concerned about their finances than older generations. Seventy-three per cent of Millennials felt that they were financially affected by the pandemic. Seventy-four per cent said the pandemic affected how they think about their money.

United States
With the US still working to contain the pandemic, 82 per cent of US investors see their old way of life changing forever, which is above the global average of 75 per cent. However, only 22 per cent say the pandemic significantly affected them – below the global average of 25 per cent.

Europe
The pandemic's impact on European investors was mostly in line with the global average. The exception was related to how Europeans direct their money to make an impact. Some 42 per cent of European Millennials increased their financial support to family and friends, compared with 34 per cent of Millennials globally.

Switzerland sang froid
COVID-19 made the least impact on Swiss investors. Only 56 per cent say their way of life would change permanently, compared with a global average of 75 per cent; some 68 per cent say fears related to the effects of the pandemic would persist, compared with a global average of 81 per cent. Only 11 per cent say their finances were significantly affected.

Different market outlooks
The study also showed that people in different regions have contrasting views about the outlook for markets. In total, 81 per cent of investors said they feared a further decline, with Latin Americans taking the most worried position (89 per cent) with the Swiss at the least concerned, but still in a majority of those asked (64 per cent).