Investment habits in Luxembourg: a shift towards equities

Insights from the ABBL Retail Banking Cluster

Even without comprehensive national figures, banks are observing a shift in client behaviour towards greater allocation to securities. According to Hirtzig:

“We see, particularly among people who are new to Luxembourg, that their first priority is not always to buy a property – especially if they expect to move abroad again in a few years. Their focus is often on how to invest their money so that it gains value before they leave. More generally, younger generations today are showing more interest in investments than a few years ago. This includes traditional equity markets, but also crypto-assets and other types of investment.”

The sector is experiencing annual growth of 3 to 4% in investment volumes. The banking community welcomes this evolution, given that a significant portion of Europeans’ savings remains in low-yield accounts rather than being channelled into the economy to support areas such as the energy transition or defence.

Local and international dynamics

Luxembourg’s market for investment apps remains relatively modest compared to neighbouring countries. Globally, the Grand Duchy ranks 32nd for downloads, with private wealth traditionally well served by the strong domestic private banking sector. Banks therefore do not see online investment platforms as a major threat, unlike in countries such as Germany, where downloads rank third worldwide after the United States and China, and where banks have lost significant funds to online competitors.

Key considerations for retail investors

Whether investing via an app or through a bank, individuals should start by assessing their risk appetite and investment horizon. For short-term needs, funds are better kept in secure accounts. For longer-term goals, patience and a disciplined approach are key. Both channels are considered relatively safe, with investors retaining ownership of their securities even in the event of a provider’s bankruptcy. However, taxation of investment returns should always be clarified in advance.