Half of UK millennials set to include crypto in investment portfolios
Almost half (49 per cent) of UK millennials are planning to invest in digital assets such as cryptocurrencies in their investment portfolios, City PM can reveal.
The significant number of millennials backing bitcoin compared to 27 per cent of Gen X investors and eight per cent of baby boomers, EY’s recent UK Wealth Report found.
“Investor needs are more diverse than ever, and younger investors especially are looking at alternative investments as a way of spreading portfolio risk,” noted Dan Hall, UK wealth and asset manager leader at EY.
Only 15 per cent of baby boomers stated they were looking to diversify their portfolio in alternative assets, compared to 33 per cent of millennials and 36 per cent of Gen X investors.
According to the Financial Conduct Authority, 12 per cent of Brits are currently invested in crypto, with the average UK investor value held in digital currencies sitting at £1,842.
Investment generational split
A clear generational split has also emerged over fears around ongoing market turmoil, with 51 per cent of millennials stating they were worried about their investment returns in the current climate, compared to only 28 per cent of baby boomers.
The top concerns for all investors surveyed currently centre around regulation and tax policy changes (56 per cent), economic stability (54 per cent) and inflation (49 per cent).
Female investors are especially concerned about regulatory and policy changes (65 per cent compared to 53 per cent of male investors), as are those from the baby boomer generation, with 59 per cent compared to 58 per cent of Gen X investors and 52 per cent of millennials.
The role of AI in wealth management has also continued to accelerate, with 56 per cent of investors now saying they expect financial advisors to use AI to help manage their finances.
However, while expected reliance on AI is growing, only 32 per cent of UK investors said they trust AI as much as human advisers, compared to 38 per cent that trust them less, with major concerns flagged around data privacy.
Distrust is higher among the baby boomer generation, with 34 per cent distrusting AI tools, compared to 14 per cent of Gen X investors and three per cent of millennials.
“While AI is an increasingly integral part of wealth management, it’s clear that customers still value – and crucially expect – human input to advice,” added Hall.
“AI has the power to transform financial advice and benefit investors, so firms must very carefully navigate how they bring the new technology in whilst maintaining human input, and customer trust.”