Asia’s next-generation investors are not only cognisant of the social impact and sustainability revolution that is slowly reshaping private investment considerations but are emerging as primary change agents, so suggests survey data gathered by Asian Private Banker from attendees of BNP Paribas Wealth Management’s recent Nextgen Experience in Hong Kong.
Held last month, the symposium is the private bank’s flagship offering for next-generation clients and prospects in the region, attracting a capacity crowd of attendees representing eight Asian markets and aged 23-40 years.
Just over 70% of attendees told the bank they expect ESG and social responsibility considerations to increase in prominence in their families’ investment strategies going forward, with the balance not ruling out the possibility.
Less than a third said their families are already investing along sustainable or socially responsible lines — albeit in an ad hoc manner — while a further 10% said such considerations are implemented on a systematic basis.
The data is consistent with a growing body of research that shows that sustainable investing is gaining momentum among private investors and particularly those of a younger generation.
A white paper published by UBS last year stated that the global percentage of investors with sustainable investments could rise from 39% in 2018 to 48% in 2023, at which point the average allocation to sustainable assets would be 38%. Moreover, the bank’s study found that younger investors and those at the upper end of the wealth spectrum expect sustainable investments to outperform their traditional counterparts.
More recently, an Asia-focused study from Standard Chartered Private Bank found that ‘millennial’ HNW investors are more likely than older generations to engage in sustainable investing and tend to do so to achieve better returns or, from an altruistic perspective, to “help create a better future”.
But the majority of attendees at BNP Paribas WM’s Nextgen Experience who already take into consideration sustainability and social responsibility in their investments singled out another reason for doing so: to open pathways to new or previously unseen investment opportunities.
Accordingly, BNP Paribas WM said it was aiming to go beyond addressing the topic in broad brush strokes.
“The challenge for us is to make the content even more relevant every year,” explained Anton Wong, BNP Paribas Wealth Management’s head of key client group for Asia Pacific, who oversees the design and running of the programme.
The bank devoted one full day to socially responsible investing, which included a talk with Craig Leeson, BNP Paribas’s global sustainability ambassador and director of the award-winning documentary ‘A Plastic Ocean’. Attendees also took part in a deep dive session on the ins and outs of medtech investing.
“So while the themes generally remain constant — social responsibility, family business and governance, entrepreneurship, and technology investing — we are now looking to go deeper into these topics to a point where attendees are able to take away something that is applicable and actionable for their families,” Wong continued.
He added that the private bank, through its next-gen offering, was not just looking to develop individual relationships but also to increase its engagement with its broader client base by uncovering inter-generational commonalities.
“Many of these young attendees will come for the networking, will find they love the content and, as a result, will take what they have learnt back to their families and champion the ideas,” said Wong, pointing to the role next-gen clients will play in driving up adoption rates of — and essentially ‘normalising’ — sustainability investing and socially impactful business practices.
“This means that it is imperative for us to remain relevant and maintain a keen eye on what is important.”
Meanwhile, the survey data pointed to the importance of the human dimension in terms of sustaining and developing relationships with next-gen clients. Almost two-thirds of attendees said their family’s existing or past relationship with the bank was a key factor for selecting a financial service provider. The second-most popular criterion was the strength of a relationship with an RM.
The findings underpin a widely held view that private banks must strike a fine balance between digital and human engagement, to the extent that both modes must complement and reinforce one another.
For its part, BNP Paribas WM’s global digital transformation programme, which prioritises the front-end experience, has been developed in collaboration with its clients.