Schroders Global Investor Study 2016: Overconfidence among global investors but a strong appetite to learn more
The Schroders Global Investor Study 2016, which surveyed 20,000 end investors in 28 countries, found that investors are confident in their own investment knowledge but most were unable to identify what an investment management company does. It also highlighted a strong appetite throughout the world to learn more about investment, presenting an opportunity for the industry to help individuals to do so.
Investment knowledge gap?
87% of investors felt their knowledge of investments is average or above that of the average investor. Millennials (those aged 18-35) were more likely to describe themselves as having greater understanding than the average investor, with three-fifths (61%) feeling this way, compared to less than half (45%) of older investors.
Despite this confidence only 37% of investors from around the globe correctly identified what an investment management company does, with millennials less likely to know than those over 35. A third of millennials (32%) correctly identified the right definition, compared to two-fifths (41%) of those older.
Thirst for knowledge
Although investors are likely to over estimate their own understanding of investments, or show over-confidence in their own ability the survey found that they are keen to learn more. 89% of investors want to learn more to help them improve their understanding of investment, whilst 94% of millennials would like to improve their investment knowledge.
Are women more realistic?
Women were more likely to admit a less than average understanding of investments, 18% of women, compared with only 11% of men, admit they have a less than average understanding of investments. The study also found that rather more women (91%) said they would like to learn more about investing, than men (88%).
Millennials more likely to look to online sources
The study found that financial advisers still remain an important part of the investment decision-making process for all investors, but millennials are somewhat more likely to do their own web-based research than older investors; Half (51% millennials vs 49% aged 36+) of investors said they would consult a financial adviser the next time they make an investment decision but this was only slightly ahead of doing their own research, either using independent websites (46% millennials vs 46% aged 36+), investment management websites (47% millennials vs 40% aged 36+) or investment provider websites (45% millennials vs 41% aged 36+).
Sheila Nicoll, Head of Public Policy at Schroders said:
“The study found that investors tend to be overconfident in their own understanding of investments. This combined with other findings, that investors are unrealistic about the income that they can expect from their investments, means they risk missing their future financial targets.
"The fact that consumers are increasingly being expected to take responsibility for their future financial wellbeing, creates an ever more pressing need for them to be engaged and better informed. At Schroders we are committed to helping make investment communications more straightforward. Encouragingly, investors want to learn more. Investors of all ages are looking to financial advisers and online sources to improve their knowledge. In most cases we would recommend getting professional advice.”
For more information on the survey results please visit www.schroders.com/gis.
To learn more about how to make more informed investment decisions to meet your income needs effectively you can visit www.schroders.com/incomeIQ. In particular, this includes an innovative tool which helps you to understand unconscious biases which can get in the way of good decision making.
To discuss the findings of the study in more detail with Sheila Nicoll, Head of Public Policy please contact a member of the Schroders PR team.
For further information, please contact:
Lucy Cotter Tel: +44 (0)20 7658 3365/ email@example.com
Sarah Deutscher Tel: +44 (0)20 7658 6139/ firstname.lastname@example.org
Notes to Editors
For trade press only. To view the latest press releases from Schroders visit: http://ir.schroders.com/media
About the Schroders Global Investor Study 2016
Schroders commissioned Research Plus Ltd to conduct, between 30 March and 25 April 2016, an independent online study of 20,000 investors in 28 countries around the world, including Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, the Netherlands, Spain, the UK and the US. This research defines ‘investors’ as those who will be investing at least €10,000 (or the equivalent) in the next 12 months and who have made changes to their investments within the last five years. These individuals represent the views of investors in each country included in the study.
Schroders is a global asset management company with £343.8 billion (€413.7 billion/US$459.6 billion) assets under management as at 30 June 2016. Our clients are major financial institutions including pension funds, banks and insurance companies, local and public authorities, governments, charities, high net worth individuals and retail investors.
With one of the largest networks of offices of any dedicated asset management company, we operate from 37 offices in 27 countries across Europe, the Americas, Asia, Middle East and Africa. Schroders has developed under stable ownership for over 200 years and long-term thinking governs our approach to investing, building client relationships and growing our business.
Further information about Schroders can be found at www.schroders.com.