Youth on smartphones. "Generation Stress"? Today's Youth Wants Everything at Once
The 2016 Credit Suisse Youth Barometer illustrates how the growing variety of goals in life and the more and more widespread use of smartphones and apps are increasingly turning young people into a “stress” generation. The survey also shows that politics on the web works: The fact that political issues can be commented on and discussed online is viewed positively.
The young people surveyed in Switzerland, the US, Brazil, and Singapore want to have it all in life: a career, but with a good work-life balance; to be independent and to work at an international company; to save less, but also own their own home. And with all activities, they are constantly online, communicating with each other, consuming news, playing games, and discovering new apps. This leads to the conclusion that young people today are turning into a “stress generation.”
Politics on the Web Works
Apart from in Singapore, young people’s interest in politics is growing in all the countries surveyed. At the same time, politicians around the world are trying to reach young people more intensively than ever through the internet and social media. A majority of respondents sees it as positive that political issues can be commented on and discussed online: They view this as a benefit for politics. However, young people are also aware of the negative side of the virtual world – above all with regard to so-called “shitstorms” and potentially manipulated political content on Facebook and Twitter. Having said this, there is broad agreement, especially in the US and Brazil, with the statement “Facebook, Twitter, and online comments make politics more interesting and motivate users to become more politically engaged.”
Worries about Unemployment, Terrorism, and Healthcare Issues
In the US, unemployment, terrorism, and healthcare are the most widespread issues. Somewhat contrary to their reputation, young Americans are adapting less quickly to new technologies than their counterparts in Switzerland, for example: Lively use is still made of text messaging, while WhatsApp has barely established itself. Snapchat is also described as less “in” there than in Switzerland.
In Brazil, corruption and unemployment are mentioned by over two-thirds of young people; neither topic appears in the top five in Switzerland. Various results suggest that young people from the South American country have a great interest in digital technologies.
In Singapore, respondents cited inflation and health issues as the second and third most important problems facing their country. The top issue is terrorism. Fear of attacks has increased markedly in recent years: In 2013, this was identified as a problem by just 11% of respondents; nowadays it’s 38%.
Overview: The Ten Most Important Insights from the 2016 Credit Suisse Youth Barometer
Unemployment remains one of the main concerns: The tense economic climate in recent years is also reflected in the Youth Barometer. Job concerns are one of the most frequently cited problems in all countries except for Switzerland.
Fear of terrorism is growing: The many attacks around the world have increased fears of terrorism. In Singapore it comes first, in the US second, and in Switzerland sixth in the worry ranking list. While 13% of Swiss citizens described terrorism as a major problem back in 2010, this has now risen to 23%.
Optimistic view of the future: Despite their concerns, the young people surveyed, who were born between 1991 and 2000, view the future with optimism, although somewhat less than in earlier years. Swiss youngsters display the most optimism (59%). The majority of the youth in Brazil (54%) also expects things to turn out well – but this is down from 67% in 2010. Fifty-two percent are of this opinion in the US and 43% in Singapore.
Credibility of the web decreasing: A large majority is aware that postings on Facebook, Twitter, and the like can be manipulated. And only a minority believes these comments to be honest and genuine (exception: Singapore). There is awareness everywhere that there are so-called trolls on the web, whose intentions are not honest.
Widespread experience of cyber-mobbing: Many of those surveyed reported negative experiences on the internet. 40% in the US, 39% in Switzerland, 33% in Singapore, and 26% in Brazil claimed to have been harassed or even mobbed on Facebook.
Snapchat on the rise: While text messaging is continuing to gain importance in the US and Singapore, it only remains in use by a minority in Brazil and Switzerland. New favorite: Snapchat. Fifty-two percent of those surveyed already make use of the communication service in Switzerland.
Saving for home ownership: Home ownership is the greatest financial desire in all countries. And the low interest environment of the last few years has left its mark. If given 10,000 units of their national currency, the young people would pay less into their savings account than in 2015. Instead, putting money aside to buy a home, buying equities and funds (US, BR, SG), going on vacation (BR, SG, CH), and investing in the family (US, BR, SG) are popular desires.
Many goals in life: Those surveyed have many goals in life, some of which are also contradictory. The following are supported by over 50% in all countries: “a good work/life balance,” “pursuing one’s own dreams,” “home ownership,” “developing one’s own talents,” “trying out different things,” “pursuing a career,” “family with children,” “getting to know many countries and cultures.”
Self-employment is a frequent career aspiration: Questioned about their preferred employer, many young people say they would like to be self-employed. One exception is Switzerland where self-employment is not sought after so broadly. The most popular employers are: 1. Google, 2. SBB, 3. Novartis, 4. Roche, 5. Credit Suisse. The home office is increasingly gaining in popularity: Apart from in Singapore, where working from home has for a long time been most popular, considerably more of those surveyed consider this option to be important than in 2015 in all the countries surveyed.
Established religions continuing to lose ground: Between 22% and 34% of those surveyed describe themselves today as agnostic/atheist/undenominational. Just two years ago it was between 5% and 13%. The established religions are therefore losing ground among those surveyed despite still attracting majorities.
The detailed analyses of the study, including information graphics, can be found at the following link.
CC-BY-SA-2.0, FlickrMichel Tulle - LinkedIn. Michel Tulle, New Senior Director of Southern Europe and Benelux at Franklin Templeton
Franklin Templeton has appointed Michel Tulle as senior director of Southern Europe and Benelux.
Tulle, currently based in Buenos Aires, will report from Paris as of January 2017 to Vivek Kudva, managing director of EMEA, and responsible for the coordination and development of the business in this area.
With over 27 years of experience in the financial sector, of which 21 have been within Franklin Templeton, Tulle “will ensure strong leadership in his new role”, the asset manager said.
Co-heads of Italian branch
Antonio Gatta, former institutional sales director, and Michele Quinto, former retail sales director, where also appointed co-heads of the Italian branch as of September 30 2016. In their new role Gatta and Quinto will report to Tulle.
“The appointment of Michele Quinto e Antonio Gatta represents a significant recognition towards our important path of development implemented in recent years on the Italian market,” Tulle said.
CC-BY-SA-2.0, FlickrPhoto: ING Group
. Asset and Wealth Management Sector Seems Oblivious of FinTech Opportunities
PwC’s 2016 Global FinTech Survey ranked the asset and wealth management sector as the third most likely to experience the game-changing impact of FinTech startups. In order to succeed in this new landscape, asset and wealth managers need to adapt and engage with FinTechs.
60%of asset and wealth managers think that at least part of their business is at risk to FinTech. When asked about any type of threat, asset and wealth managers were the least concerned of all financial services industry players. They believe FinTech will have only a limited impact on their businesses, with 61% of respondents expecting an increased pressure on margins, followed by concerns around data privacy (51%) and loss of market share (50%).
Julien Courbe, PwC’s Global FS Technology Leader, says: “Banking and payments industries offer palpable examples of FinTechs changing the financial sector by offering new solutions that are visibly disturbing traditional players. This should be an eye-opener for asset and wealth managers as they are next in line, while their FinTech mind-set is still in its infancy. For instance, over a third (34%) do not yet engage with FinTech companies at all, while collaboration with FinTechs is crucial and will be the only way for the traditional firms to deliver technological solutions at the speed expected by the market. We strongly believe incorporating FinTech solutions will visibly strengthen their market position.”
Data analytics was identified by 90% of the asset and wealth managers as the most important trend for the next five years. Followed by automation of asset allocation as “robo advisors” are putting pressure on traditional advisory services and fees. Unsurprisingly, when it comes to investments asset and wealth managers choose new technologies related to data analytics and automated asset allocation rather than expanding their digital and mobile offerings. Only 31% of asset wealth managers provide their clients with mobile applications, lagging behind all other financial players.
Julien Courbe says: “With ‘robo advisors’ becoming more sophisticated, they create an opportunity for asset managers to target the mass affluent who are looking for cheaper alternatives to receive advice on how to manage their assets. The key is to find the balance between human and technological interaction to create an omni channel experience at the speed expected by the market.”
CC-BY-SA-2.0, FlickrPhoto: Tony Webster. Deutsche Might Prepare a Public Listing of its Asset Management Division
Deutsche Bank is reported to consider floating its asset management unit, in a bid to boost its cash ratio, amid a multi-billion-dollar charge by the US government over alleged misselling of mortgage-backed securities.
As the Financial Times reports, Deutsche is planning to prepare a public listing of its asset management division, however, an IPO would only take place following the completion of the settlement with US authorities. Deutsche Bank declined to comment on the report.
As of June 2016, Deutsche Asset Management covered €710bn of assets under management and according to its latest annual report, it is one of the strongest performing units, with pre-tax profits increasing by 23%, compared to a struggling investment banking division.
The group has faced a plummet in its share prices following an announcement by US regulators that it faces a $14bn (€12.57bn) fine due to alledgedly misspelling mortgage backed securities. As a result of falling share prices, Deutsche’s market value has halved sicne the beginning of this year.
Other options being speculated for the German lender are an outright sale of its asset management division, an option which has been explicitly denied by Deutsche Bank CEO John Cyran, or to increase the number of shares in circulation, however, the latter is unlikely to be sufficient in covering the scale of litigation charges.
CC-BY-SA-2.0, FlickrPhoto: martathegoodone
. Santander Might be Considering Selling its Stake in Allfunds Business
Santander Asset Management could be weighing options for its holding in its Allfunds Bank investment platform, including a sale of its stake, Bloomberg reports citing people familiar with the matter, which let them know that the discussions are at an early stage and the company may decide to hold on to its stake.
Santander currently owns 50% of the business while Italian Intesa Sanpaolo holds the other 50% stake.
Their sources, who asked not to be identified because the deliberations are private, believe the entire business could be valued at about 2 billion euros ($2.2 billion) and attract interest from private equity firms.
Santander Asset Management is controlled by Spanish Banco Santander and U.S. buyout firms Warburg Pincus and General Atlantic. Santander created Allfunds in 2000 to help financial institutions get access to so-called open architecture funds. Italian lender Intesa acquired a stake in 2004 as part of Allfunds’s international expansion. The company has offices in Spain, Italy, the U.K., Chile, Colombia, Dubai, Luxembourg and Switzerland.
Allfunds reported profit of 69 million euros in 2015, up from 46.4 million euros a year earlier, according to the company’s financial report.
CC-BY-SA-2.0, FlickrPhoto: Citigroup. Citi Sells its Consumer Business in Brazil and Argentina
Citi has reached a definitive agreement to sell its consumer banking business in Brazil to Itaú Unibanco, and its consumer banking business in Argentina to Banco Santander Rio subject to regulatory approvals.
The sale in Brazil, where Citi has operated for over a century, constitutes approximately US$2.8 billion in assets for Citi and includes credit cards, personal loans and deposit accounts, as well as Citi Brazil’s retail brokerage business. Citi’s consumer banking operations in Brazil will continue to operate in the ordinary course through the transition to Itaú Unibanco. Upon the conclusion of the transaction, Citi will continue serving clients of its corporate and investment bank, commercial and private bank businesses in the country.
“Brazil is a strategic market for Citi and is an essential part of our footprint and global network,” said Jane Fraser, Citi Latin America CEO. “We have been in Brazil for more than 100 years and we will continue to grow our market leading franchise serving our institutional and private bank clients, leveraging our global presence and generating better returns on our assets and capital for our shareholders.”
The sale in Argentina involves approximately US$1.4 billion in assets for Citi and includes credit cards, personal loans and Citi Argentina’s retail brokerage business, as well as deposit accounts. Citi’s consumer banking operations in Argentina will continue to operate in the ordinary course through the transition to Banco Santander Rio. Citi will continue serving its commercial banking and corporate and investment banking clients in the country.
“Argentina is one of Citi’s most important markets in Latin America and its future is extraordinarily promising,” said Fraser. “We have been in Argentina for more than 100 years and are committed to supporting growth and progress in the country. We will continue to invest in and grow our market leading institutional franchise there as recently announced by our CEO Mike Corbat.”
Meanwhile, last week, Citi announced that it will invest more than US$1 billion in its Mexican business, historically known as Banco Nacional de México or Banamex and now called Citibanamex. Fraser then said, “Citibanamex will honor our rich history in the country while acknowledging that together we offer more talent, experience and ideas that will help enable economic growth and progress for Mexico.”
CC-BY-SA-2.0, FlickrPhoto: Colin Tsoi
. Hong Kong will Overtake Switzerland to Have World’s Richest Citizens by 2020
Switzerland tops the current ranking of the world’s wealthiest territories measured by savings per capita, with the average Swiss citizen holding more than $186,000 in liquid assets, according to financial services research and insight firm Verdict Financial. The US and Hong Kong follow in second and third place respectively.
The company’s latest report, which analyses 69 wealth markets across the globe, indicates that by 2020 the rankings will change, with Hong Kong taking the lead, and Switzerland falling to third place.
Bartosz Golba, Verdict Financial’s Senior Analyst for Wealth Management, explains: “With a forecast compound annual growth rate of 7%, Hong Kong will be the third quickest growing developed wealth market over 2016–20. Hong Kong’s growing importance is not a big surprise. The market is exemplary in regard to explaining why the majority of global wealth managers put Asia-Pacific at the center of their growth strategies. In real terms – taking inflation into account – no other region will see its value of liquid assets grow at a greater pace.”
“What makes Hong Kong unusual is the local investors’ preference for near-cash products. Almost 85% of liquid onshore assets of retail investors in Hong Kong are allocated to bank deposits, while the developed markets’ average stands below 62%. This protects portfolios from capital markets volatility, and at the same time provides a significant cross-selling opportunity for wealth managers operating in Hong Kong.”
On the other hand, Verdict Financial’s savings per capita ranking highlights the unequal distribution of global wealth. Golba continues: “Look at India, for instance, which is already the world’s tenth biggest market in terms of total assets held by high net worth individuals. It will be ranked sixth by 2020, by which point Indian millionaires will hold more wealth than their Australian counterparts. At the same time, however, the average individual’s savings stand below $2,000, making India one of the worst performers in our assets per capita classification.”
According to Golba, the low penetration of affluent individuals as part of overall population is typical for developing nations. He explains: “The higher the country’s development level, the larger the penetration of the world’s wealthiest people. In the US, almost two thirds of the population can be considered affluent. As a country in which almost 2% of citizens are millionaires, it remains an attractive market for private banks and wealth managers.
“While we are in a period characterized by volatile financial markets and wealth managers looking for optimal business strategy, there is one thing that remains constant. In aggregate terms, the US has been, and will remain, by far the world’s largest wealth market.”
CC-BY-SA-2.0, FlickrImran Ahmad. Imran Ahmad Joins Standard Life Investments as Investment Director EMD
Standard Life Investments has added to its team of five emerging market debt specialists with the appointment of Imran Ahmad as Investment Director – Emerging Market Debt (EMD). Imran, who has 12 years’ experience in the industry, joins the company from JP Morgan Asset Management where, since January 2013, he held the role of Currency Portfolio Manager.
Reporting to Richard House, Head of Emerging Markets Fixed Income, Imran will be based in London and will have primary responsibility for emerging market currency overlay strategies across the entire EMD suite of funds.
Richard House said of the appointment: “Imran’s appointment reflects our commitment to, and belief in, the long term opportunities the EMD asset class has to offer. Imran’s skill set compliments the team’s approach to managing EM fixed income portfolios, namely high conviction macro based investing. The team which has over 77 years’ experience in the industry, works ‘hand-in-hand’ with the 40 strong fixed income and global emerging market equities teams, allowing us to seek out the best investment ideas and opportunities for our investors.”
Standard Life Investments this week announced the launch of an Emerging Market Debt (EMD) Unconstrained SICAV – the fourth Emerging Market Debt strategy in the suite of EMD products they offer to both retail and institutional investors. The SICAV was launched in response to demand from European investors for access to the increasingly popular asset class and will be co-managed by Richard House and Kieran Curtis.
CC-BY-SA-2.0, FlickrGlyn Jones
. Glyn Jones, New Independent Non-Executive Chairman at Old Mutual Wealth
Old Mutual Wealth appointed Glyn Jones as the independent non-executive Chairman of the Old Mutual Wealth Board, subject to regulatory approval.
He will replace Bruce Hemphill, CEO of Old Mutual plc, who is stepping down as Old Mutual Wealth’s Chairman. Bruce will continue to be a director of the Old Mutual Wealth Board. Glyn will be working closely with Bruce as Old Mutual plc seeks to execute the managed separation of the wealth business.
Glyn is presently the Chairman of Aspen Insurance Holdings, a New York Stock Exchange listed business, and the Chairman of Aldermore Group, the challenger bank that went public in 2015 on the London Stock Exchange. Previous non-executive roles included being the Senior Independent Director on the Direct Line Insurance Group, a board he joined ahead of its listing on the London Stock Exchange as a FTSE 100 company. Other past chairmanships include: Hermes Fund Managers, BT Pension Scheme Management and Towry, a financial planning and wealth advice business.
Glyn started his career with Deloitte, Haskins & Sells, a predecessor firm to PWC, where he was a senior partner in the consulting practice specialising in financial services. In 1991, he joined Standard Chartered Bank where he ran their international private banking business which was headquartered in Hong Kong. On his return to the UK in 1997, he joined NatWest Bank and was appointed CEO of the Coutts Group, the domestic and international private banking business, as well as having responsibility for NatWest Investments and NatWest Stockbrokers. In 2001, Glyn joined Gartmore Investment Management as CEO until 2004.
Paul Feeney, CEO of Old Mutual Wealth, said: “I am very pleased that Glyn has agreed to join the Old Mutual Wealth Board as Chairman. His depth and breadth of understanding of the financial services industry, which has been gained from leading top industry companies over the last 20 years, will be of great benefit to our business. He also brings extensive experience of chairing both public and private boards. I look forward to working with Glyn as we build on the momentum that exists to transform Old Mutual Wealth into a truly outstanding business. I believe we have an exciting future ahead of us.”
Jones added: “I am delighted to be invited to be the new Chairman of Old Mutual Wealth. This is a unique and leading wealth management business which is well placed to succeed in the fast developing and exciting industry in which it operates. I look forward to helping Old Mutual Wealth in its development and playing my part, alongside my fellow board directors, in supporting and guiding Paul and his executive management team, as well as working closely with Old Mutual plc to help them achieve their strategic objective of managed separation.”
Old Mutual Wealth is a subsidiary of Old Mutual plc. Old Mutual plc is in the process of executing a managed separation strategy that will separate the Group into its four constituent businesses: Old Mutual Wealth, Old Mutual Emerging Markets, Old Mutual Asset Management and Nedbank.
CC-BY-SA-2.0, FlickrPhoto: Nimalan Tharmalingam. London Remains the Top Leading Global Financial Centre
London, New York, Hong Kong, Singapore and Tokyo remain the five leading global financial centres according to the twentieth Global Financial Centres Index (GFCI 20). Published by Z/Yen in collaboration with the China Development Institute (CDI), the GFCI rates 87 financial centres. London is one point ahead of New York (on a scale of 1,000 points this is insignificant). Singapore is 42 points behind New York in third place. Tokyo, in fifth place, is 60 points behind New York.
The UK ‘Brexit’ referendum result is not reflected in the GFCI 20 results so far. GFCI 20 was calculated based on data collected up to the end of June 2016 – a few days after the referendum result on 24 June. Looking ahead to GFCI 21, assessments given to London in July and August are significantly down from previous levels. GFCI 21 may show some significant changes. London, New York, Singapore and Hong Kong remain the four leading global financial centres.
All North American centres except Calgary are up in the ratings. Calgary focuses on energy finance and the recent volatility in oil prices is likely to have caused a decline in Calgary’s rating. San Francisco and Boston are second and third in North America – reflecting the growing importance of FinTech. Chicago re-enters the GFCI top ten and Toronto, the leading Canadian centre, is now 13th having been eighth a year ago.
Western Europe remains a region in flux. Luxembourg and Dublin show strong rises in the ratings whilst Geneva and Amsterdam fall. Early indications following the Brexit referendum result are that decision-makers are looking around and considering Luxembourg and Dublin as potential locations if they need to leave the UK. Wealth management in Geneva may be suffering from increased transparency requirements of international regulators. Seven of the top ten Asia/Pacific centres see a fall in their ratings.
Some Eastern European and Central Asian centres prosper whilst others struggle. Warsaw, Tallinn and Riga are now the leaders in this region. Istanbul, Moscow, St Petersburg and Athens continue to languish. Turkey and Russia are both involved in armed conflict. Although geographically removed from the fighting, the financial centres in these countries are clearly affected by the uncertainty this creates.
Australasian centres are doing well. Three of the top five global centres are Asian. Hong Kong and Singapore had some small declines. Sydney and Melbourne both saw solid increases in their ratings.
Offshore financial centres are recovering lost ground. Jersey, Guernsey, the Isle of Man, the Cayman Islands, Bermuda, the British Virgin Islands, and are all up in the GFCI 20 ratings.
Middle Eastern centres decline. With the exception of Bahrain which saw a modest rise, all Middle Eastern centres were somewhat down although Dubai only fell by a single point remaining well ahead of other centres in the region.
Latin America down, Caribbean Up. Sao Paulo, Rio de Janeiro and Mexico continue to struggle. Trinidad & Tobago have entered the index for the first time in 71st place.
Mark Yeandle, Associate Director at the Z/Yen Group and the author of the GFCI, said “Changes in perceptions following the Brexit referendum are not yet reflected in the GFCI. However, early signs are that London could see a decline next time round. Which centres may gain from this is hard to predict.”
Fan Gang, CEO of the CDI, said “We are delighted to be working with Z/Yen Group in producing this index. It is a very exciting time for financial centres in China as Shanghai, Shenzhen and Beijing all rose in the GFCI ratings in GFCI 20. Dalian and Qingdao were also seen as performing well in recent editions. We anticipate that Chinese financial centres will rise rapidly in importance around the world.”
