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UK Consumer Investments 2018: Consumer Research Report

  • ID: 4751490
  • Report
  • November 2018
  • Region: United Kingdom
  • 77 Pages
  • IRN Research
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The aim of the Consumer Investments Consumer Research Report is to study how UK consumers behave when they make financial investments. Consumer investing behaviour is studied in terms of consumers who currently own investments and consumers who hold money in a form which could potentially be released to invest into investment products (e.g. held in cash or defined contribution pensions if the consumer is aged 55+). The report considers what types of assets consumers hold, how they purchase and invest and what factors influence their purchases. It also considers how consumer investment behaviour has been influenced by developments like fund platforms.

The report found, for example, that 78% of consumers can be considered as Investors, that is they own one or more of three types of asset: risky investment products (e.g., equities, unit trusts, investment property, self-invested pension plans), cash or defined contribution pensions which they have the right to access and withdraw money from. Investors fall into two prime groups: Uncertain Investors (around one-in-four Investors) and Positive Investors (around three-quarters of Investors).These two groups are differentiated by their attitudes to taking risks, their levels of wealth, financial knowledge, approaches to investing and their gender and social grade.

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1. Executive Summary

  • Two main groups of Investors
  • Consumers are confident managing their money but are less confident handling their investments
  • Investors like to do it for themselves
  • But that doesn't mean professional support is not needed
  • Investors shift their judgements according to their wealth and confidence
  • The typical Investor invest in two asset classes
  • And Investors are showing some caution about the coming year

2. Introduction

  • Definitions
  • Abbreviations

3. Who Are Retail Investors?

  • Key findings
  • Almost half of consumers own investment products
  • Three types of consumer
  • Age, gender and income the great discriminators
  • The typical Risk-Taking Investor has £261,000 invested
  • Remember averages can be deceptive
  • Wealth begets wealth

4. Where Do Retail Investors Invest Their Money?

  • Key findings
  • Shares and SIPPS the most popular form of investments
  • Larger portfolios allow more diversity and risk taking
  • Seven-in-ten Investors have an ISA
  • Stocks and share the main component of Investment ISAs
  • And they form a significant component of Investment funds/pension products
  • Fund holders like their fund actively managed
  • Strong movement into cash over the coming year
  • Investors with low or medium portfolio diversification the most likely to invest more
  • Further caution despite a good year
  • Satisfaction comes from earning a return of 3% or more
  • Investors may be cautious about Brexit, but they still expect a better return

5. How Retail Investors Approach Investing

  • Key findings
  • While most consumers feel confident managing their money
  • This confidence does not extend to making investment decisions
  • Because investors are risk averse
  • More motives drive wealth accumulation which provides more reasons to invest
  • The Circle of Investment life

6. How Retail Investors Manage Their Financial Affairs

  • Key findings
  • Investors are doing it for themselves
  • Investors may like to self-manage but that doesn't mean they do not need any help
  • The more advice, guidance and support needed, the more professional help is sought
  • They may like to self-manage but they put most faith in IFAs if seeking advice
  • If you get Professional help, you also tend to let them press the “buy” button
  • When doing it for themselves, it is done online
  • Will online tools push more Investors into DIY Investing?
  • Fund platforms appeal to young male Investors adopting a mixed approach
  • Young, confident investors power online investing

7. How Retail Investors Judge What To Buy

  • Key findings
  • Investors prefer monthly investment products
  • Investors like their returns balanced or tipped towards income generation
  • Investors check frequently but judge over the medium term
  • Investment judgements change according to the level of wealth owned
  • And according to the type of investor
  • And according to the motives or goals of investing
  • Investors weigh up returns versus risk when buying
  • The More wealth you have the more factors you weigh up
  • The bigger the risks taken the more you deliberate about your choices

8. Two Main Groups Of Investors

9. Appendix

List of Figures
Figure 1 The breakdown of consumers based on their investment holdings, 2018
Figure 2 The demographic profile of consumers by their investment holdings
Figure 3 Graphic view of the income and age effects
Figure 4 The average (mean) wealth held by Investors and Potential Investors
Figure 5 The median and mean wealth held by Investors and Potential Investors by wealth group
Figure 6 The financial and demographic profile of consumer wealth groups
Figure 7 The ownership of investment, pension and cash assets by type of consumer
Figure 8 The ownership of investment, pension and cash assets by wealth group
Figure 9 ISA holdings by Investors
Figure 10 The assets held within Investment ISAs
Figure 11 The assets held in collective investment and pension products
Figure 12 The types of investment funds held
Figure 13 Consumer investment intentions over the coming year
Figure 14 The net %* of consumers planning to invest more next year by type of consumer and product
Figure 15 The net percentage* of consumers planning to invest more over the coming year by wealth group
Figure 16 Investor satisfaction with the growth of their wealth over the past year
Figure 17 The financial returns earned in the past year by investor satisfaction
Figure 18 Consumer confidence managing their money (score between 1 and 10)
Figure 19 Confidence buying a financial product without professional help by type of consumer and wealth
Figure 20 Net confidence* buying without professional help by gender, age and social grade
Figure 21 The main motives for investing
Figure 22 The motiving for investing by wealth groups
Figure 23 Correspondence Analysis of the motivations for investing
Figure 24 How investment affairs are managed
Figure 25 The topics on which advice, guidance or support is needed by investment approach
Figure 26 The relationship between needing advice, guidance and support and taking it
Figure 27 The best source of advice, guidance and support to recommend the course of action
Figure 28 The most favoured types of professional advisor used
Figure 29 How Investors wish to execute trades/investment changes
Figure 30 The percentage of investors personally using fund platforms
Figure 31 The percentage of owners of specific risky investments that use fund platforms
Figure 32 Net %* increasing their purchases via fund platforms over the past two years
Figure 33 A picture of the investment preferences of Investors
Figure 34 A Correspondence Analysis of investment judgement by wealth group
Figure 35 A Correspondence Analysis of investment judgement by type of investor
Figure 36 How Investors invest by investment motive
Figure 37 The most important factors when selecting an investment
Figure 38 The factors used to determine and investment decision by wealth group
Figure 39 Average number of factors considered before making an investment
Figure 40 Pictorial description of the investment profile of the two Investor groups
Figure 41 Pictorial description of the demographic profile of the two Investor groups
Figure 42 How Investors invest by wealth group
Figure 41 How Investors invest by type of investor
Figure 42 The key investment characteristics of the two Investor group
Figure 42 The key demographic characteristics of the two Investor group

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