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Why High Net Worth Individuals are not Happy With Wealth Managers on Digital Coin Investments?

Why High Net Worth Individuals Are Not Happy With Wealth Managers On Digital Coin Investments?

High net worth individuals investing in cryptocurrencies are not happy with wealth managers though they are getting richer. That is because they are not getting sufficient information from them on the emerging digital coin. They normally invest a minimum of $1 million other than the main property investments. The wealth managers appear to be cautious through the virtual currencies market gained global attention after the prices hit the rooftop in December last year.

High Degree of Interest

According to a Capgemini World Wealth Report 2018, though rich are getting richer, they expect better advice from their wealth investment consultants on matters of digital coins. Their report indicated that 29 percent of millionaires had shown a higher degree of interest in virtual assets, i.e., either buying or holding them, reported. Similarly, 37 percent of the millionaires are sitting on the fence. This meant that a total of 56 percent could be swayed easily into investing in cryptocurrencies. This is despite softness in prices in the current year.

On the other hand, 44 percent of millionaires have indicated low interest in virtual currencies. In any case, only a third of the surveying firm’s millionaires indicated that they got information from their wealth managers. One of the reasons for it is that they are cautious in offering suggestions about virtual assets investments. Alternatively, there could have been lack of knowledge on the emerging sector. Significantly, about 56 percent of high net worth individuals (HNWI) disclosed that they were in touch with their investment counselors.

Capgemini felt optimistic and concluded that both ambiguities in regulatory issues and cautious attitude had curbed virtual assets to become a bigger feature. Wealth managers appeared to be having confusion in the ongoing regulatory measures thus preventing themselves from going overboard. The prices have also plunged sharply from the previous year high increasing the cautious approach.

The Capgemini report said, “The strong demand for information on cryptocurrencies from younger HNWIs is likely to force wealth management firms to at least develop and offer a point of view during the months ahead.” The wealth management companies have to do their research on digital currencies since they were well-versed with conventional and institutional investing historically.

Institutional Investors

The report sees wealth managers role to show an increased amount of interest from their clients once the expected institutional investors enter into the cryptocurrencies sector. Millionaires have generated more than 20 percent returns last year, which is the second consecutive time. As a result, the collective wealth of HNWI reached more than $70 trillion making it the first time. By the turn of 2025, the total collective wealth could hit $100 trillion.

A few months ago, Credit Suisse predicted that the one percent of the worlds richest own more than 50 percent of all wealth globally. This would increase to two-thirds of wealth by the year 2030. Therefore, there is potential that digital currencies market could see a massive increase in investments as $291 billion was already invested in it.

About the author


Fred is a successful entrepreneur and investor. His passion to share his knowledge and to analyse the highly unregulated cryptocurrency market brought him here. His experience gives him a strategic edge amongst others.

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