(Finance) – In Europe the assets are concentrated in the Affluent and Private segments, which are very attractive, with more than 40% and 30% of total assets. In this scenario, Italy is among the most important markets, with over 3,700 billion euros of private savings.
This is the photograph taken from the analysis of Bain on private savings from which it emerges how, in this contextthe financial advisory proposal must evolve very quickly towards alternative asset classes (marginal today) and also on non-financial objectives.
“The inflationary scenario and high interest rates will impact savings in the short term, but an effect on the growth of the segment in the long term is not expected,” he explains Daniel Funaro, Partners of Bain & Company. “Today the market is served by various financial operators characterized by industrial models with significant differences in terms of organizational set-up, operating model, go-to market and with different logics for providing investment advisory services to customers. The latter represent a key element in supporting the savings allocation decisions of Affluent and Private customers. There are various advisory models on the Italian market, with a common trend: the evolution from product logic to portfolio and advanced advisory logic. The consultancy proposal is evolving from an investment advisory to integrated life planning, supported by a more centralized model focused on financial and other objectives (e.g. coverage of insurance needs). This approach makes it possible to overcome the weaknesses of traditional advisory and generate value for the customer and the bank”.
According to the analysis, the ongoing evolutionary path in counseling will also have to consider new asset classes for Retail customers: not just limiting ourselves to liquid assets, but also alternative assets and digital ones in the future, to further diversify investments and provide profitability differentials.
“To date”, continues Funaro, “alternative assets in the world have barely penetrated investors’ portfolios due to a series of industrial, knowledge and accessibility factors, also due to regulatory constraints. Today, private wealth is about 50% of the total but only 16% of the alternative AUM”.
THEn Italy, these investments represent a marginal share of wealth, around 52 billion euros. However, they will represent an increasingly important asset class in the investment portfolio of both Private and Affluent customers in all major geographies. In fact, 44% of investors globally surveyed by Bain & Company plan to increase their allocation to this type of investment, but alternative assets are perceived as a diversification tool that requires proper education, especially regarding investment selection .
“Considering the growth prospects of this market and its importance for the country’s economy, a major regulatory and fiscal stimulus is needed to incentivize investors,” continues Funaro.
“Among the new emerging asset classes, Digital Assets”, he concludes Flavio Rector, Associate Partner of Bain & Company, “will weigh more and more on investors’ portfolios. In this context, cryptocurrencies represent an immediate investment opportunity, with a global volume of over 1,000 billion euros. However, the real engine of change will be represented by asset-backed tokens, which will allow investing in markets that are currently inaccessible: Private Debt, Private Equity and Real Estate. The numerous regulations arriving at EU level – which will guarantee harmonized frameworks on issuance and trading, greater protection for investors and clear regulation for Banks in terms of capital requirements and tests / controls on the value of these assets – will make these investments increasingly more attractive to investors and intermediaries, generating significant growth in the coming years”.
(Photo: Photo by Mathieu Stern on Unsplash)