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0 CommentsA new survey from Capgemini revealed that 71% of high-net-worth individuals (HNWI) around the world have invested in cryptocurrencies and other digital assets. The survey also has advised wealth management firms to prioritize providing education and advice.
On June 14, technology consulting company Capgemini released its 2022 World Wealth Report. It polled 2,973 global HNWIs, with 54% reporting a wealth band ranging from $1 million to $30 million and 46% reporting wealth of $30 million and over.
Capgemini’s survey asked about investment preferences for emerging asset classes such as digital assets, classifying them as cryptocurrencies, related exchange-traded funds (ETFs), non-fungible tokens (NFTs), and metaverse-related products.
Among about 14% of wealthy individuals investing in digital assets, the highest concentration were under 40. More than 90% in this age group have invested in digital assets. The younger cohort said cryptocurrencies are their favorite investment, with crypto ETFs and metaverse products also highly desired.
However, crypto does not make up the majority of portfolios, and HNWIs have only allocated around 14% into “alternative investments,” including crypto alongside commodities, currencies, private equity, and hedge funds.
The survey also observed that the wealth management industry is seeing an influx of investments into digital assets, which has “increased the demand for educational capabilities.”
“The influx of new investment avenues such as sustainable investing and digital assets is having a crucial impact on the wealth management industry. Wealth management firms must prioritize providing timely education around this trend to retain their customers,” noted Nilesh Vaidya, Capgemini’s head of retail wealth management.
Meanwhile, some firms are already clued into this trend and are wanting the first-mover advantage in this niche sector by launching investment products targeted at the demographic.
Thus, investment bank Morgan Stanley introduced exposure to Bitcoin (BTC) for its millionaire clientele in March 2021, with only those holding $2 million or more in capital able to invest. Also, private banking clients for BBVA Switzerland were given access to crypto trading and custody services, along with a similar offering from Wells Fargo in 2021.
Recently, the research by Accenture also revealed that 52% of wealthy investors in Asia held some form of a digital asset during the first quarter of 2022 making up, on average, 7% of the surveyed investors’ portfolios. Although, Accenture found that wealth management firms have been slow to adopt investment products with cryptocurrency or digital asset exposure, with a majority saying they have no plans to offer related services.
