Shanghai Jiaotong University's Shanghai Advanced Institute of Finance (SAIF) and Charles Schwab, a provider of financial services, jointly issued the eighth annual "SAIF-Charles Schwab China Rising Affluent Financial Well-Being Index" in Shanghai on Wednesday.

The index aims to track the financial well-being and shifting investment perceptions and behaviors of the country's rising affluent population, those earning 125,000 yuan ($17,570) to 1 million yuan per year but owning less than 7 million yuan in investable assets.

The 2024 Index shows a small decrease in the overall financial well-being score to 70.51, down from 70.78 in 2023. While the confidence, planning, and management sub-indices also record a drop of 0.46, 3.36, and 1.22 points, respectively.

The engagement level records a slight increase to 79.72, up from 78.95 in 2023, mainly driven by the increased diversity of financial services used by the rising affluent and their improved perception of professional financial advisors, it said.

"As the Chinese economy enters the high-quality development stage, the momentum and structure of economic growth are undergoing significant transformation," said Tu Guangshao, the founding chair of the board at SAIF.

"The importance of expanding domestic demand and promoting consumption in driving economic growth and development is becoming increasingly evident, and the rising affluent are a key force in this process, "he said.

"Expanding the middle-income group has been a key policy focus, and the rising affluent is a key part of this group."

According to the report, the rising affluent's concern for household debt this year has markedly increased, especially among the middle, and high-income groups, those earning 15,000 yuan to 30,000 yuan and above 30,000 yuan per month.

Among them, 22.4 percent of high-income respondents consider debt a key financial concern, which marks an 8.6 percent increase since the previous year and a new high since the inception of this study. There is substantial room for enhanced long-term financial planning, it said.

"A diversified portfolio can mitigate volatility by sustaining relatively stable returns. It is therefore imperative to enhance financial literacy on long-term investments and diversification," said SAIF professor Wu Fei.

This year, while the rising affluent were more proactive regarding retirement planning, insufficient understandings of what retirement planning entails could, in the long-term, undermine the rising affluent's actual preparedness, it said.

"This year's Index findings underscore the importance of long-term financial planning and multi-faceted wealth management for the rising affluent's financial well-being, providing a roadmap for the financial services industry's continued growth," said Thomas Pixley, general manager of Charles Schwab (Shanghai).

"Financial institutions should provide targeted, holistic advice centered around investors' life goals and household needs and covers key components of their financial lives, from assets to liabilities."

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