Digital investment channels are no longer just the domain of the young or tech-savvy, but are increasingly being embraced by a broader demographic of retail investors. This trend is indicative of a larger shift in the asset management industry, reflecting a blend of technological advancement and evolving investor behaviour.
The insights come from a comprehensive survey commissioned by Amundi, Europe’s largest asset manager. The study involved over 4,000 retail investors across 11 European and Asian markets, aiming to capture a panoramic view of the current investment landscape. It brings to light the growing prominence of digital channels in the investment strategies of retail clients, highlighting a departure from traditional, non-digital methods.
“We are witnessing a profound and enduring transformation of our industry – intensified by rapid digitalisation and demographic shifts,” said Fannie Wurtz, head of the distribution and wealth division in Amundi’s Passive Business, in a comment on the survey’s findings.
The survey indicated that 64% of retail investors now invest digitally, with a notable 25% entrusting their entire portfolio to digital services. This high level of digital engagement suggests a growing trust and reliance on online platforms for investment activities. It also points to a significant shift in how investors are choosing to manage their financial assets, embracing the convenience and accessibility that digital platforms offer.
Growing confidence among retail investors
A deeper dive into the survey reveals that the average investor surveyed has over half of their portfolio invested through digital channels, often without the intervention of an investment professional. This finding is particularly noteworthy as it indicates a growing confidence among retail investors in managing their investments independently, aided by digital tools and platforms.
Investors however continue to rely on qualified financial advice when making investments, with two out of five respondents looking to a professional adviser when investing a sum equal to a year’s salary.
More digital use forecast
The study forecasts an increase in the use of digital investment channels. Close to half of the respondents currently investing through digital platforms expect to up their digital allocations. However, this trend is not uniform across all markets. In Switzerland and Singapore, the proportion expecting to increase digital investment reaches 60%, while it drops to 31% in France and 35% in Italy, illustrating diverse digital adoption rates in different regions.
Wealth and confidence levels appear to play a significant role in this digital shift. The survey suggests that wealthier and more confident retail investors are more likely to predict an increase in their allocations to digital services. In the bracket of investors with under 20,000 euro in investable assets, 38% expect to increase their digital investment proportion. This figure escalates to 55% among those with more than 150,000 euro.
Investor confidence
Investor confidence has a significant role to play in relation to increasing digital engagement, with 56% of those confident that they are making the right savings and investment decisions expecting to increase the proportion of their portfolio invested digitally, compared to only 27% among those not confident.
This is similarly true when it comes to values and responsible investing with 71% of confident investors stating that it is important or vital for their views to be reflected in investment decisions – compared to 46% of less confident investors.
Women investors
Amundi said its research shows how the industry needs to take steps to ensure that women investors are better engaged and included to ensure the gender investment gap does not widen further.
Only 16% of women investors are completely confident that they are making the right financial decisions while 27% feel underinformed. Gender also affects product choices. Women are significantly more likely to invest in a fixed-term or savings deposit than men (44% vs 34%) and significantly less likely to invest in ETFs (26% vs 36%) – often because they don’t know how to.
According to Amundi, investment providers have an opportunity to support and capture greater female wealth accumulation if they embrace addressing this confidence and information gap.
Further reading on Investment Officer Luxembourg:
- Amundi Research Institute keeps CIOs, clients on track
- ‘Stunted’ EU fund sector requires more diverse investor base
- Efama DG calls for reframing discourse on retail investments