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Covid-19 has changed wealthier clients – report

Wealth managers need to adapt to fundamental changes to client behaviour caused by the Coronavirus pandemic, according to a new report.

The way clients behave and the way they want to receive information may have changed forever, says the research from investment data provider Refinitiv.

The study found that self-directed and advisory clients’ needs were “rapidly changing.”

Younger investors are trading more frequently, ESG is rising in popularity and the pandemic has changed investment sector choices.

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The report found that 44% of active millennial investors “accelerated their trading” frequency during volatility in financial markets, compared to just 22% of older generations.

Despite this overall 39% of investors do not feel they have enough data and information to make investment decisions during the current challenges.

When it comes to sectors to invest in 66% are focused on pharmaceuticals and healthcare due to the development of new Covid-19 therapies and vaccines with technology close behind on 64%. Travel and hospitality sectors are struggling to bounce back.

The wealth management report, ‘The Gold Standard: Redefining Investor Data Needs’, predicted that investors’ trading activities, data needs and digital expectations were likely to evolve in the future post Covid-19.   

The report is based on a survey of 1,030 self-directed and advised mass affluent investors in September. Investors were based in nine centres: Australia, Canada, China, Hong Kong, Japan, Singapore, Switzerland, the UK and US.

Key findings included:

• 39 % of investors do not feel equipped with the data and content to make investment decisions

• 34 % were more interested in ESG investing than 6-12 months ago. Enthusiasm for ESG rises to 61% of millennial investors but investors say they need better data to screen ESG firms

• 41 % of investors say well governed companies perform better

• 54 % of investors agreed ‘news analytics’ (utilising a wider range of sources for investment news) could be a game changer when choosing future investments

• 33 % do not find webinars useful

Refinitiv said: “Wealth management firms should reassess the channels and formats of the content delivered to optimize insights for the current market environment.” 

Joe Mrak, global head of wealth management, Refinitiv said in the face of “unprecedented change and uncertainty” investors’ need for trusted and accurate data has never been greater.

He said: “Our research shows that investors across the board, whether self-directed or advisory clients, have a growing need for a more comprehensive data offering that spans traditional analysis and non-traditional alternative data. The industry will need to continue advancing in critical areas such as ESG to empower investors to make decisions with confidence.”

Refinitiv is a provider of financial markets data and infrastructure to 40,000 institutions in 190 countries.

• The report can be downloaded here: https://www.refinitiv.com/redefining-data-needs .

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