The CFA Institute finds that young, wealthy Chinese investors hold ambitious financial goals but concentrate portfolios in cash and bank products. One finding pointed to the use of "financial influencers", a trend that has concerned regulators.

Gen Z and Millennial mass-affluent, high net worth and, even wealthier investors in China, keep most of their portfolios in cash and low-risk instruments despite having ambitious long-term financial goals, according to new research from CFA Institute.

The report, based on a survey of 300 investors, found that cash and cash equivalents account for 72 per cent of holdings, with bank and trust wealth management products making up a further 62 per cent. CFA Institute described this as an "aspiration-implementation gap," in which investors' long-term objectives are constrained by short investment horizons, limited investing knowledge and insufficient access to skilled advice.

China is starting its first major intergenerational wealth transfer, with an estimated $14.1 trillion expected to pass between HNW families in the coming decades. Wealth accumulation and wealth preservation ranked as top priorities for 74 per cent and 61 per cent of respondents respectively, with many aspiring to reach financial freedom by around age 40 for Gen Z and age 50 for Millennials.

The preference for cash, for example, fits with the affection for cash shown in this recent interview with Citi Wealth and its views of how ultra-HNW clients are behaving. 

The CFA Institute said survey respondents cited economic and market uncertainty as their biggest challenge (53 per cent), followed by lack of access to a skilled advisor (29 per cent), and lack of investing knowledge (25 per cent). Nearly all respondents (97 per cent), said they used some form of financial advice, with close to 60 per cent combining human advisors and digital platforms. Gen Z investors leaned more towards robo-advisors and digital tools, while Millennials showed a stronger preference for traditional advisors.

Financial professionals remained the most widely used and trusted source of financial information, cited by 57 per cent of respondents and trusted by 76 per cent. Financial influencers were also significant, used by 51 per cent and trusted by 66 per cent, a finding CFA Institute said points to the growing weight of digital credibility alongside professional qualifications.

In Hong Kong, the Securities and Futures Commission announced a regulatory roadmap for FinFluencers.