Consumers turning to self-investing to boost finances
Increase driven by people's desire to have a firmer grip on their money
People are becoming increasingly confident about self-investing in order to boost their finances, due to the convenience, reduced cost and greater control of taking matters into their own hands, a new study has found.
The research, carried out by AXA, found that the popularity of self-investing grew significantly in 2012, driven by people’s desire to have a firmer grip on their money and the direction of the investments they made.
The Four Cs
Four key reasons – all beginning with the letter C – were cited as the most important factors: control, convenience, cost and confidence.
Of the 2,000 people questioned, 54% said that self-investing makes them feel more in control of their finances, while almost half noted that they find it easier to deal online and hold investments in one place, without the need for an adviser.
When it came to cost, 42% of respondents said that transparent pricing with no hidden charges is a significant factor in the decision to self-invest, while a third of those surveyed said that it helps them to feel more confident about their investment decisions.
“With the growing demand for self-directed investment solutions, it is important to understand motivations, fears and ambitions,” explained Andy Zanelli, head of retirement planning at AXA Wealth.
“While investors, on the whole, are approaching self-investing with confidence and greatly appreciate being in control of their own investments, there are some basic areas which cause them concern,” he added.
Shares and shares alike
According to the survey, stocks and shares ISAs are the most popular product for self-investment, with 72% of consumers choosing this method, though regular monthly investment is prevalent among six in ten respondents.
Those currently self-investing also value another C – clarity – with 76% preferring a transparent pricing model with no hidden charges, while almost nine in ten said that a secure website is an important factor in their decision to self-invest.
As result of this rising trend, Mr Zanelli concluded that it is now important for self-investing platforms to innovate to meet the needs of the “emerging generation” of self-directed investors.