The financial wealth of households in France has reached a record level, but this has also sparked criticism of traditional investment approaches.
Record Wealth Driven by Caution
According to the Bank of France, the financial wealth of French households stood at €6,356.4 billion as of December 31, 2024, marking a 1.7% increase from last year. This makes it nearly twice the national public debt and 2.5 times the capitalization of CAC 40. The main driver of growth has been the preference for risk-free savings in a context of economic instability. The Bank of France emphasizes that 'the colossal size of this amount is driven by the high savings rate of the French (18%).'
Criticism of Traditional Investment Products
While the French place their trust in traditional investments, this is not without criticism. In a recently published report, two deputies, Jean-Philippe Tanguy (RN) and François Jolivet (Horizons), have sharply criticized life insurance, describing it as non-transparent and underperforming. They point to 'significant and unclear' management fees and historically low returns. Investments in unit-linked products showed an average performance of -8% from 1999 to 2021, raising questions about the modernization of popular savings.
Prospects for Innovative Financial Solutions
This situation raises an essential question about how to reorient a portion of this €6,000 billion towards innovative and yield-generating vehicles without betraying the legit caution of savers. While traditional financial models are being challenged, and new opportunities like staking and crypto ETFs are beginning to thrive in other European countries, France still exhibits structural inertia. Historical habits, taxation, and traditional banking offerings hinder exploration of alternative solutions.
In the context of a technological and monetary revolution, where traditional financial models are challenged, France must find a balance between caution and the need for innovative changes in managing its wealth.
