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Investors Embrace Financial Advice As Appetite For Income, Risk Rises

Editorial Staff

18 February 2024

A survey of 3,000 affluent and high net worth individuals found perhaps unsurprisingly that they turn more to financial advice in increasingly challenging economic conditions.

According to a study by Swiss core banking software and technology firm , more than half (53 per cent) of investors consult industry professionals when making investment decisions, a figure that has risen by 9 percentage points since 2022.

“Investors’ motivations have changed and their desire for income as well as their increased appetite for risk are reflections of the new realities of risk and return profiles in this volatile economic environment,” Martin Greweldinger, co/chief executive of Avaloq, said. 

Avaloq surveyed individuals in February and March 2023, taking views from investors aged 18 and above across six European and Asian markets: Germany, Switzerland, the UK, Hong Kong, Japan, and Singapore (500 respondents per market). Some 57 per cent of respondents were mass-affluent (with investable assets of $250,000 to $1 million) while 37 per cent fell within the HNW segment (with investable assets of $1 million to $50 million) and 6 per cent within the ultra-HNW bracket (with investable assets above $50 million).

Avaloq said the research shows that in today’s high inflation and high interest rate environment, income is investors’ top priority. 

Moreover, investors are increasingly relying on industry professionals such as financial advisors when making investment decisions.

Professionals are the go-to source for investment advice, followed by news articles (cited by 46 per cent, up 3 percentage points since 2022). Meanwhile, investors are less likely to look to their friends and family when deciding how and what to invest in, with just a third (33 per cent) relying on them for advice (compared to 35 per cent in 2022).  

The switch likely reflects the need for professional expertise, following a year of financial uncertainty, geopolitical tensions, energy crises and supply chain disruptions. Against this backdrop, investors cited additional income (50 per cent) and retirement planning (43 per cent) as the top factors driving them to invest.

In a further sign that investor preferences are changing and demand for professional advice will increase, Avaloq’s survey revealed that a greater percentage of investors would describe their investment approach as aggressive (27 per cent), up from 20 per cent in 2022.