Coronavirus pandemic spurs rise in first-time investors

Wealth managers have an opportunity to reach out to new investors, as the COVID-19 pandemic has spurred an increase in financial markets volatility, a new report showed.

According to data and analytics company GlobalData, investment platforms are reporting a strong rise in the number of customers opening new accounts, and many of these entrants are first-time investors.

“While risk is not an objective measure but dependent on a wide variety of factors, such as experience, education and current circumstances, there is a clear correlation between age and risk aversion, and our proprietary risk index shows that younger consumers are notably less cautious,” Heike van den Hoevel, senior wealth management analyst at GlobalData said.


GlobalData’s 2020 “Banking and Payments Survey” and “Life and Pension Survey” also revealed that recent investment account openings have been dominated by the millennial segment.

“Gen Zers and the vast majority of millennials would have been too young to be financially impacted by the effect of the 2008/09 financial crisis on investment portfolios. This means that having never experienced a prolonged downturn, younger consumers are more willing to take risks and capitalise on a market rebound,” van den Hoevel said.

According to GlobalData, introducing training and education sessions with a particular focus on risk and return will be critical to ensure the longevity of a new relationship between wealth managers and new investors.




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