Conclusions from the survey: “The French, their Wealth and Finance with a Purpose”
As the ongoing debate on the role of companies for society and more broadly, the role of the financial sector within the economy is bustling, we have decided to question those most directly affected by these matters: the French public. We therefore conducted a survey in partnership with Patrimonia – the French annual conference for wealth management professionals - with a view to understanding how the population relates to the idea of “Finance with a purpose”. How much do they know about it? What investments have they already made? Which topics are they most receptive to? A panel of 1,000 participants, representative of the French population, has been surveyed by the INFOPRO DIGITAL ETUDES research institute during the first quarter of 2018. Here are the main findings.
Savings: a core concern for the french population
First, putting money aside is a key concern in France: overall, 8 people out of 10 build up their savings, even if occasionally; 50% started saving when they were aged 19 to 34, in their early working life. What are their reasons? Most said they save to fund unforeseen expenses (63%) while feeling relatively safe financially. Other main reasons are to plan for their future: either to prepare for their retirement (27%), to provide and protect for loved ones (21%) or to build up their wealth (21%).
8 out of 10 french people build up their savings (...) 50% started saving when they were aged 19 to 34
The French respondents seem familiar with the concepts of diversification and returns: nearly 53% of those with savings declare they invest in financial products in order to diversify their investments, and 30% in order to enhance their returns.
A concept that deserves greater recognition
Few of the French respondents were able to explain the idea of a Finance with a Purpose when asked to give their own definition. Those who did tended to associate Finance with a Purpose with a notion of public interest (13%), a contribution to economic development (12%) and a support to companies (12%) while being mindful of generating a return on invested capital (8%).
For the purposes of this study, we therefore explained clearly our definition of “Finance with a Purpose”.
Once the concept clarified, 67% of respondents said they were interested in “purposeful savings products”, and almost 20% were convinced: they could change their investment habits to align with the values of Finance with a Purpose. And while 32% admit they have never invested “usefully”, they claim this is due to a lack of awareness of these types of savings products.
67% of french public claimed to be interested in “purposeful savings products”, and almost 20% were convinced:they could change their investment habits to align with the values of finance with a purpose
Nevertheless,the study shows that 26% have already made “purposeful investments” via savings products (PEA, LDD, PEE, life insurance), 10% through their bank (cooperative or solidarity bank…) and 5% by investing directly in responsible companies. Note also that Millennials (18-34 years) display the lowest reluctance to change (18%) in terms of investment habits.
What are the priority areas? Which sectors are most concerned?
For an investment in a given company to be considered “purposeful”, our survey indicates that it must benefit the company’s environmental impact (71%), its own growth (65%) as well as French society as a whole (63%). The relationship forged between the company and its suppliers also stands out as a key factor (54%).
Furthermore, some sectors stand out clearly as being more representative of the idea of Finance with a Purpose in people’s minds: French craftmanship (20%), energy (19%), and healthcare (15%) are the clearest illustrations. Conversely, the survey shows that banking (31%) and grocery retailers (29%) are the least representative. It’s worth noting that from the point of view of Millennials (18-34 years), the energy sector is the industry most closely associated with the concept of Finance with a Purpose, while for the quiet generation (73 years +), healthcare comes first: undoubtedly a reflection of these group’s respective concerns for the future…
More education is required
Turning to labels and their relevance, our study shows that labels can increase client confidence (29%), but should mostly have an educational purpose. When it comes to “purposeful investing”, it appears that almost 20% of respondents give considerable credit to the recommendations of their advisor. Looking at the LDD (Livret de Développement Durable – a French sustainable development savings account), few people truly know what their money is used for. However, associating this product with the concept of Finance with a Purpose makes it attractive to 38% of the participants – this is also the case for green life-insurance (23%) and “responsible” PEA equity schemes (21%).
In light of the ambition from French Minister of Economic Affairs and Finance Bruno Le Maire, to “ensure all French investors have access to savings products that fund the energy transition and the adjustments to climate change, and that all life insurance contract bearers benefit from ‘climate’ certified unit-linked vehicles”, the stars seem to be aligning in support of a broader adoption of purposeful investment products.
Furthermore,while Finance with a Purpose offers a genuine opportunity to reunite societal issues and financial interests, French retail investors are well aware of its potential for generating attractive returns: one respondent out of three expects a responsible investment to deliver a performance of 3 to 6%.
Some promising results
Naturally, figures should always be used with caution. However, the outcome of this survey is rather encouraging: the French people, and in particular the next generations of investors, seem convinced by the concept of Finance with a Purpose and are sensitive to the issues of responsible investment. As of today, the public should be educated and reassured on the useful nature of these investments, what they finance and to whom they benefit. It is up to us, as professional investors, to live up to their expectations!
For more information on the results of the survey on “The French, their Wealth and Finance with a purpose”, please do not hesitate to contact the Sycomore AM team.
The french people,and in particular the next generations of investors,seem convinced by the concept of finance with a purpose and are sensitive to responsible investment