Climbing the prosperity ladder

The company which did the research report – Standard Chartered bank

About the company - Standard Chartered plc is a British multinational banking and financial services company headquartered in London, England. It is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. 

Area of research - The study provides fresh insights into the social mobility of the emerging affluent across these regions. It reveals that there is space for improved investment strategies for those who want to reach higher through smarter choices but they feel held back by a lack of financial knowledge.

Name of the organization which did the survey – Standard Chartered

Participants of the survey - 11,000 interviews were conducted either online or face-to-face in China, Hong Kong, India, Indonesia, Kenya, Malaysia, Nigeria, Pakistan, Singapore, South Korea and the UAE.

Duration of the research - Survey June and July 2018

The main points of discussion in the survey:

1.  how people maximise opportunities to advance themselves and their children.

2. emerging affluent experiencing social mobility

3. socially mobile whose earnings have significantly increased in recent

4. socially mobile who hold management positions or own a business compared to their parents

5. socially mobile who have achieved a university or a college degree compared to their parents

6. the ratio of men to women among the socially supercharged

7. abundant opportunities for scaling the social pyramid

8. rate of economic growth and symbols of success in different societies

9. strategies adopted by emerging effluents in achieving their financial goals

10. emerging entrepreneurs

11. digital dividends 

Findings of the survey: We believe their economic power represents a significant driver of market growth. 

1. Percentage of the emerging affluent experiencing social mobility – on an average52% Supercharged socially mobile, 7% socially mobile, 42% not socially mobile. Career progression has resulted in a significant increase in earnings for the socially mobile: more than a third (35%) have enjoyed a salary increase of 10% or more in the past year, in contrast to 16% of those who are not socially mobile.

2. Percentage of the socially mobile whose earnings have significantly increased in recent years - On average 35% Increased by 10% or more in the least year and 28% Increased by 50% or more in the last five years. Perhaps three-quarters of the socially mobile are in management positions or running their own business whereas 52% of their fathers and 34% of their mothers were in this position at the same age.

3. Percentage of the socially mobile who hold management positions or own a business compared to their parents -  On an average 75% Socially mobile, 52% Fathers of the socially mobile, 34% Mothers of the socially mobile. 

4. Percentage of the socially mobile who have achieved a university or a college degree compared to their parents - On an average 85% Socially mobile, 50% Fathers of the socially mobile, 41% Mothers of the socially mobile.

5. Percentage of men and women among the socially supercharged - More than half of those achieving supercharged social mobility are women (55%), meaning they are enjoying more accelerated mobility and climbing the hierarchy faster than men.

6. It is exciting to see that women are more empowered than ever. They are accelerating their careers, growing businesses and buying homes at a rapid pace- 84% have a university degree, while 96% are earning a salary.

7. The fast-growing economies of China, India and Pakistan are providing abundant opportunities for scaling the social pyramid - While the emerging affluent in China are more cautious about salary growth than their counterparts in fast-growing Pakistan and India, workplace remuneration is just one side of the social mobility equation. Education has been considered crucial to improving social standing in China for a long time, but the generational shift towards university access among the socially mobile is larger than any other market.

8. The steady climbers: South Korea, Singapore and Hong Kong - With economic growth not increasing as quickly as it did for their parents’ generation, emerging affluent millennials (aged 25-34) in these markets hold a more pessimistic view of their social status than their peers in other economies. In South Korea, where challenges resulting from an ageing population are a concern and general standards of living are higher, 60% of millennials do not consider themselves to be affluent, followed by 52% in Hong Kong. By comparison, around half that amount in China (28%) and India (28%) think the same.

9. On the up: Nigeria, Kenya, Indonesia, Malaysia and the UAE - In Kenya more than 6 in 10 (61%) of the emerging affluent are socially mobile, and more than half are on the rise in Nigeria (56%) and Indonesia (54%). The UAE is a commodity-rich market that also has an established business infrastructure, this developed economy has an impressive upward mobility rate of 57%. 

10. Symbols of success - 53% of the emerging affluent think that the most important sign of achievement is increasing personal wealth over time. In Nigeria, leaving a legacy to your children is especially important, with nearly a quarter describing this as a sign of success, with 32% believing that business ownership is an important sign of success. Hong Kong is the only market where getting on the property ladder is considered to be the ultimate marker of achievement. In China, buying luxury goods is more than twice as important as on average. In Kenya and the UAE, being able to put your children through university defines financial success.

11. Difference between the socially mobile and the emerging affluent that feel they are better off than their parents - On average, 59% are the emerging affluent who are socially mobile; 70% of the emerging effluents who are better off than their parents.

12. The rise of the supercharged - Most of the emergent affluent in the markets we have studied are mobile, but some are moving at speed. These are known as the supercharged socially mobile. Making up 7% of the emerging affluent, they are a small but mighty force. The supercharged socially mobile have achieved great personal success and are experiencing extreme upward mobility through the vast gap between their parents’ situation and their own, and a steep increase in earnings across their own careers. Wealth is the ultimate sign of success for the supercharged.

13. Percentage of the emerging affluent who would use the following strategies to meet their financial goals and increase their wealth - Strategy Average Investing in financial products (e.g. stocks, bonds, mutual funds) 56%; Career progression and salary increase 43%; Starting a business 27%; Having a side hustle 24%; Part-time second job 18%; Making use of the ’gig economy’ 12%; Expected inheritance 3%.

14. Emerging affluent who believe managing their finances effectively is key in achieving social mobility - The research findings highlight that 42% of the emerging affluent feel their lack of financial knowledge is holding them back. Additionally, almost eight in 10 use only one investment product or none at all, as they may not understand all the solutions available to them, or have access to relevant market insights. 

15. The wealth wish-list - Education is a key lever of upward social mobility, so the emerging affluent want to use their money to increase their family’s prosperity in the future. Other highly-ranked savings priorities also aim to build security for the long term rather than being short-term luxuries. The emerging affluent generally describe impressive investment habits, but the products they actually use suggest there is a gap between their perception and reality.

16. Using investments - Savings accounts are the most popular method of achieving wealth targets, with nearly half (49%) using them to reach their top financial goal across all markets. This is followed by time deposits (29%) and then property investment, with less than a quarter (23%) using real estate to increase their wealth.

17. The need for financial knowledge and advice - The emerging affluent want to know more about money management and believe that a lack of financial understanding is stopping them from succeeding further. 42% said that they felt held back in their aspirations by their lack of financial knowledge. 

18. Emerging entrepreneurs - The emerging affluent are keen to use other enterprising strategies to make money, with 24% saying they would have a side hustle alongside their day job, while 18% say the same of a part-time job, and 12% would use the gig economy as a strategy for increasing their wealth. Business income is more likely to be a top source of revenue for women (56%) than it is for men (49%).

19. Digital dividends: technology holds the key to financial success- ‘Fintech’ – or financial technology – is a secret weapon for the emerging affluent, with almost two-thirds (65%) saying that their familiarity with digital tools has been vital to their personal success. On top of this, digital money management has helped 61% of the emerging affluent get closer to achieving their financial goals. A new source of financial control could be helping the emerging affluent drive their social mobility, with Smartphone apps revolutionising money management in emerging economies and driving financial inclusion. Older generations have embraced mobile banking, with little difference between age groups when it comes to using a Smartphone once a week or more to monitor bank balances and make payments via banking apps. On an average56% of emerging affluent would invest in financial products online, but only if they had an on-demand adviser available to assist and 53% would accept a high level of risk for a high level of return when investing in online financial products. Digital savviness goes hand-in-hand with success, as 62% who demonstrate it are socially mobile, compared to half of those who are not. Three-quarters of confident, frequent users of tech products also consider themselves better off than their parents, compared to just 61% of those who are not. Digital banking and wealth management tools can help the emerging affluent to set and track their goals, and provide portfolio performance reports and market commentary which help them to achieve them sooner.

To sum up, dynamic economic conditions have helped the socially mobile to flourish, but they have also worked to elevate themselves by achieving high levels of education, increasing their wealth through employment, entrepreneurship and investment, and becoming homeowners. And with the world becoming faster and more complex, the best money management opportunities are constantly changing and, therefore, being plugged into our digital world has never been more important.

Questions : 

1. The study was done by?
   1. Standard chartered
   2. Global markets
   3. Societe generale
   4. Synchrony
2. What is the title of the study report?
   1. Achieving financial goals
   2. Climbing the prosperity ladder
   3. Social mobility
   4. Economic growth
3. What kind of service is provided by Standard chartered plc?
   1. Auditing
   2. Human resource
   3. Banking and financial services
   4. Investment policies
4.  When was this survey conducted?
   1. 2020
   2. 2017
   3. 2018
   4. 2019
5. What represents a significant driver of market growth?
   1. Increase in purchasing power
   2. Economic growth
   3. GDP 
   4. Living standard
6. What has resulted in a significant increase in earnings for the socially mobile?
   1. Career progression
   2. Entrepreneurship
   3. Inheritance of property
   4. Holding a degree
7. What serves as a greater indicator of the gap between the socially mobile and their parents?
   1. Owning a property
   2. Higher education
   3. Entrepreneurship
   4. Salaries
8. Who is experiencing more accelerated mobility?
   1. Women
   2. Men
   3. Both are accelerating equally
   4. None is accelerating
9. What acts as fuel to the impressive growth rates of fast-growing economies?
   1. Higher education
   2. Entrepreneurship
   3. Earnings progression
   4. Luxury possession 
10. Who are called the “tiger” economies?
    1. China, India and Pakistan
    2. Nigeria, Kenya, Indonesia, Malaysia and the UAE
    3. South Korea, Singapore and Hong Kong
    4. None of the above
11. ______ is the only market where slightly more of the emerging affluent are not socially mobile
    1. Hong kong 
    2. Singapore
    3. UAE
    4. South Korea
12. When it comes to defining success, _____ of the emerging affluent think that the most important sign of achievement is increasing personal wealth over time.
    1. 50%
    2. 55%
    3. 53%
    4. 57%
13. Which is the market where getting on the property ladder is considered to be the ultimate marker of achievement?
    1. Hong kong
    2. UAE
    3. India
    4. Singapore
14. What % of emerging effluents makes supercharged socially mobile?
    1. 10%
    2. 7%
    3. 5%
    4. 12%
15. What is the ultimate sign of success for the supercharged socially mobile group?
    1. Wealth
    2. Power
    3. Authority
    4. Higher education
16. What strategy is more likely to be used by emerging effluents to meet their financial goals and increase their wealth?
    1. Career progression and salary increase 
    2. Starting a business 
    3. Investing in financial products (e.g. stocks, bonds, mutual funds) 
    4. Having a side hustle
17. _____of the emerging affluent feel their lack of financial knowledge is holding them back.
    1. 24%
    2. 42%
    3. 12% 
    4. 53%
18. What was ranked as the most important savings priority for the emerging affluent in every market in the study?
    1. build security for the long term rather than being short-term luxuries
    2. Buying a first home
    3. setting up a business
    4. Paying for their children’s education
19. What is considered as the key to effective financial management in today's time?
    1. Taking help of agencies
    2. Online banking tools
    3. On-demand adviser
    4. Availing in-person services 
20. What percentage of the emerging affluent would accept a high level of risk for a high level of return when investing in online financial products?
    1. 53%
    2. 20%
    3. 43%
    4. 60%