Capgemini’s 2022 World Wealth Report revealed that about 71% of high net-worth individuals globally have invested in digital assets. The report says 91% of HNIs younger than 40 have made investments into digital assets, further noting that “cryptocurrencies are their favorite digital asset investment”.
Portfolio Management On the Basis Of Customer Risk Tolerance
In light of the rapid growth of digital assets as an investment class, wealth management firms are also gravitating towards products linked to them. This, in turn, will also be followed by collaborations across different financial ecosystems to build a diversified portfolio of digital offerings.
Investment management firm SigFid’s Head of Strategic Partnerships, Dan Mercurio said, “Creating a connected experience between wealth management and other financial services will be firms’ next growth frontier”.
However, consumer protection continues to be the top priority for these investment managers. Vanguard executive, Joseph Gribb, pointed out that investment advisors need to pitch personalized portfolio development to their high-net-worth clients, given that some assets are considerably riskier as opposed to others.
He said, “As demand for emerging asset classes rises, firms must offer investment advice based on customer risk tolerance and provide distinctive experiences across various channels based on customer preferences”.
It is not unlikely for investment firms to view crypto as a long-term investment in spite of the historic crash. According to Vauld Insights report, the financial services giant Fidelity Investments’ director of global macro, Jurrien Timmer argued that Bitcoin is currently undervalued and oversold. He pointed out that Bitcoin may be trading at a much lower price, however, looking at its valuation metrics, the crypto is expected to rally in the long term.