The perception around the significance of ESG investing to millennials is being challenged by a recent survey of 3,000 people aged 22-34, which showed that when it comes to capital allocation, millennials are not necessarily motivated by social responsibility.
Financial technology firm Calastone’s survey of the generation in Hong Kong, the UK, France, Germany, the US and Australia also showed that ethical considerations were the least important factor. Just 26% of respondents in Hong Kong thought of “investment in ethical funds, causes and products” as an important category.
By contrast, Hong Kong’s millennials consider long-term returns and low fees to be of greater importance (58% and 52% respectively).
There is also a stark contrast between Hong Kong’s millennials and their global peers when it comes to their financial planning outlook. The disposable assets of young Hongkongers stands at US$32,000 versus a global average of $18,000.
Around 91% of Hong Kong’s millennials say they save or invest compared to 72% globally, while 39% live rent-free with relatives – double the global average of 72%.
When these factors are combined, Hong Kong is an attractive proposition for asset managers. “Hong Kong millennials are emerging as a powerful investment force,” said Leo Chen managing director and head of Asia at Calastone.
“We see promising opportunities for asset managers in the local market; despite margin pressure, regulatory scrutiny and other challenges in recent years. To attract this group of investors and to increase market share in a competitive environment, it is important for asset managers to embrace digitalisation and leverage technology, which is a key part of the millennials’ lives,” he added.
Chen urged asset managers to act immediately to innovate and improve customer experience with digital capabilities and omnichannel support.
©2019 funds global asia