Research: Why don't more people invest? They don't know how
/A new study from the World Economic Forum has found that financial education gaps prevent entry to retail investment markets, with 40 per cent of non-investors choosing not to invest because they don’t know how or find the process confusing.
Key findings include:
About 70 per cent of respondents would be more likely to invest or invest more with expanded financial education
Addressing gaps in financial literacy and improving tailored advice and product awareness can improve investment behaviour and market participation
Those investing are getting younger with up to 70 per cent under the age of 45, looking for long-term financial security
Younger investors has a greater knowledge of newer investment vehicles such as cryptocurrencies, compared with older more traditional investments such as stocks and bonds
Half of those investing were doing so to build long-term wealth, particularly in emerging markets, investing for retirement or to build generational wealth
Non-investors are less confident in achieving long-term financial objectives and learnt about investing later in life, with the main reasons for avoidance of capital markets being fear of losing money and investing knowledge gaps
Generational wealth plays a vital role, with those whose parents invested beginning their investment journey earlier
The research was undertaken with BNY Mellon and Accenture, with The Future of Capital Markets: Democratization of Retail Investing finding that increased retail investing is a positive trend. Retailers are showing themselves to be prudent. The survey had over 9,000 respondents from nine countries.
