European Investors Are Mostly Confident Of The DIY Approach

Tom Burroughes

22 November 2016

A survey of more than 1,000 investors in European nations found that 60 per cent of them were either “fairly” or “very” confident in do-it-yourself investing, suggesting they have limited regard for the supposed added value of professional guidance, a report from Cerulli Associates, the analytics firm, says.

In Germany, Switzerland and the UK, these high levels of self confidence in DIY investing were evident, the firm said. This is less the case in Spain, where only 26 per cent had faith in their DIY talents. The findings came from the firm’s European Investor Segmentation 2016: Building Bridges with Clients report.

On a cautionary note, Cerulli said investors' willingness to construct their own portfolios may also reflect the nature of the sample - participants had at least €200,000 ($212,508) of investable assets and wealthier investors tend to be more financially literate than the average person.

"In practice, investors might not have the time to build and monitor a portfolio and they do not necessarily believe that they could do so better than their advisors. Nevertheless, they feel that they could get by with a minimum level of guidance," said Barbara Wall, managing director at Cerulli.

"The high confidence among investors in sophisticated markets reflects the level of financial education in Europe; it also suggests that investors in these countries might have a limited regard for professional advice," Wall said.

Robots getting some love
Robo-advice is also increasingly popular with European investors. The UK has the largest and most developed robo-advice market in Europe and 42 per cent of UK respondents to the survey said that they would consider investing via an automated online investment tool, the report said.

The report also noted that younger investors are keener to use online tools to manage their money, but that this was by no means a market out of the older generation's interest. The ages of the 1,500 investors who used Italian retail bank CheBanca's robo-advisory tool, Yellow Advice, in its first six months ranged from 35 to more than 55, Cerulli noted.

Among other findings, 34 per cent of Swiss respondents say they have no knowledge of robo advisors.

In its third iteration, the Cerulli report examines six markets: the UK, France, Germany, Switzerland, Italy and Spain. It examines the behaviours, attitudes, and evolving needs of mass affluent and high net worth investors. Data included in the report comes from proprietary research, including more than 50 interviews with asset managers, independent financial advisors, private bankers and wealth managers.