Global Luxury AND ASSET MANAGEMENT (GLAM) MONITOR
sentiments and behavioUrs of the world’s affluent and high net worth populations
FOCUS ON FINANCE
q3 2020 edition
Global Financial System Stability
Covid-19 continues to negatively impact consumer confidence in the global financial system, adding to existing uncertainties such as Brexit and the climate crisis. Altiant’s recent Covid-19 tracking study found that in the third wave of data (June 2020), between a third and half of wealthy individuals in France, UK, US and China reported a negative financial impact (see Covid report here).
From 37% in Q1 2020, the share of respondents who felt that the financial system was either very or somewhat stable plummeted to just 20% in Q2, a new low point across all quarters of study. The past quarter has seen this share recover a little, rising to 26%, possibly indicating that many wealthy individuals think the worst of the financial impact of Covid may be passing. Americans remain the most confident of the three regions (32%). However, that this is now only marginally higher than in Asia (30%) shows how Asia appears to be better in shape in dealing with Covid-19 at the time of writing. Only 14% of Europeans feel confident, with additional concerns such as Brexit looming.
Only 16% of respondents now adopt a neutral or uncertain position, while 58% think that the financial system is either very or somewhat unstable, down from 67% in Q2. At 24%, the share of people answering ‘very unstable’remains much higher than pre-Covid levels, but is significantly lower than the Q2 figure (31%). These results are reflected in the average score which posted a tentative recovery in Q3 after the significant fall the previous quarter. Nevertheless, the financial impacts of Covid-19 will felt by many consumers globally well beyond 2020 and will continue to dampen the average score.
Unfiltered Base: 4,120 global affluent/HNWIs | Source: LuxuryOpinions/AltiantStock Market Knowledge
Self-claimed stock market knowledge shows little quarterly variation and stood at 78% in Q3 2020, with 24% claiming to be very knowledgeable. Men, over-40s and Americans remain the most likely groups to state that they are very knowledgeable. Indeed, at 39%, Americans are more than three times more likely to do so than the 13% of Europeans (Asia stands at 21%). 16% feel that they only have a little stock market knowledge, with only 6% saying they have no knowledge at all. Women are more likely than men to profess to a lack of stock market understanding (27% vs 15%).
Unfiltered Base: 4,120 global affluent/HNWIs | Source: LuxuryOpinions/Altiant
Regional Stock Market Confidence
The ongoing effects of Coronavirus continue to have a significant impact upon the data for stock market confidence. While this measure has fluctuated in our study to date, the first two quarters of 2020 saw a clear shift towards a negative performance. However, there are signs that confidence is returning. From 33% in Q2, the share of respondents expecting an improvement in performance rose to 40% in Q3, the same level as it had been in Q4 2019.
Asians are the most bullish about their stock performance with half expecting an improvement, possibly reflecting the reduced rates of Covid infections and deaths in Asia at the time of writing. By comparison, 40% of Americans expect an improvement, while only 29% of Europeans do so. The share of respondents who believe that their stock market performance will remain broadly even has also recovered to 18%, up from 14% last quarter.
The share of respondents expecting a downturn in performance jumped to 53% in Q2 2020, by far the highpoint for the study so far. This figure was driven by a notable rise in responses for a ‘much worse’ performance, which increased to 23% in Q2. Q3 saw a large drop in this number – almost to pre-2020 levels at 42% – with only 10%expecting their stocks to perform much worse in the year ahead. Europeans remain the most sceptical, with this fall being driven by Asian respondents in particular. This cautious optimism could be subjected to further fluctuations in the coming quarters but currently points towards many wealthy individuals feeling that the worst has passed.
Unfiltered Base: 4,120 global affluent/HNWIs | Source: LuxuryOpinions/Altiant Investing in Cryptocurrencies
Cryptocurrency investment remains largely uninfluenced by Covid-19, with the share of active investors still tracking at around a third of the sample. In Q3, 19% invest with a long-term view, and 16% with a short-term view. Under-40s remain comfortably more likely than over-40s to be active cryptocurrency users (45% vs 27%), while at only 24%, Europeans also lag behind the uptake seen in North America and Asia. Indeed, the latter region now has almost half of the affluent sample (48%) being active investors.
Cryptocurrency could still attract new investors into the market, with 30% of the Q3 sample being current non-investors but being interested in doing so in the future, rising to 36% among Americans. In each of the past study quarters, around 25%-33% say that they do not currently invest in them and do not think they will do so in the future. This remains true in Q3, with 26% holding this view, peaking among over-40s (34%). Also, in line with previous quarters, only around one in ten (9%) are completely unfamiliar with cryptocurrencies.
Unfiltered Base: 4,120 global affluent/HNWIs | Source: LuxuryOpinions/AltiantPublications contained in the Altiant Knowledge Center are free to use, we simply require proper attribution. In no event shall Altiant be liable for any indirect, special or consequential damages in connection with any use of the provided data. Altiant does prohibit the selling of any information contained within or derived from these reports and monitors.