Since investors in the Greater Bay Area (GBA), which has an estimated GDP of $1.7trn, are surrounded by entrepreneurial vibrancy in a fast-growing economy, “it should come as no surprise” that 43% of them invest with an eye to someday supporting their own entrepreneurial dreams, according to a report by Avaloq, a provider of digital banking and wealth management technology.
The region is home to risk-seekers, with 41% of respondents to an Avaloq survey of ultra-high-net worth investors classifying their risk appetites as aggressive or very aggressive
Avaloq found that 85% of its survey respondents “must have” or “would switch” financial service providers to get portfolios including cryptocurrencies, despite China’s recent crackdown on energy-hungry crypto miners.
What seems to matter is supporting next-generation wealth technology, which may well use the blockchain extensively. Indeed, the survey reported that two out of five GBA investors would be “excited” to have NFTs or tokenized non-bankable assets (such as fine art) in their portfolio.
Meanwhile, as much as 91% of respondents indicated that they want to adopt portfolios to serve ESG goals – which Avaloq characterises as the “family-oriented” part of their investment strategies.
“While solid ESG planning is [also] clearly a requirement for attracting and retaining these clients, it is equally important to offer cutting-edge instruments. They not only want to have a positive impact, but they also want to invest to develop the next generation of technologies and investment opportunity,” said Avaloq.
There seems to be a clear opportunity for wealth management advisers. Although 78% of respondents said they feel that they control the management of their investments, 34% of them plan to work with an adviser in the future.
However, 93% of respondents demand highly personalised service and would resort to switching advisers to get it, while 28% said they would change if their adviser was “reluctant to modernise” and did not “adopt new technologies”, such as apps and artificial intelligence.
Nevertheless, there in an undercurrent of prudence and conservatism among wealthy investors in the GBA.
There is a “common purpose” that investments should provide for future healthcare expenditure, retirement income and care for their families, according to the report.