Investor Confidence Barometer 2024 - Research round-up

Here, we provide a round-up of other interesting results from our survey of advisers, advised consumers (AC) and non-advised consumers (NAC). All consumers are aged 35-70 with a minimum of £100K in investible assets.

As has been the case in previous surveys, advised consumers are significantly more confident about retirement than non-advised consumers. 64% of advised consumers are confident of meeting their retirement plans versus only 46% of non-advised consumers. Advised consumers are also much more confident that their portfolio will grow enough to meet those plans (62% versus 41%). These results speak to the value, and greater piece of mind, that advice can provide for investors.

All investors are susceptible to a range of emotional and cognitive biases. Both advised and non-advised consumers can be influenced by the news and both get worried when their portfolios fall in value. However, the act of outsourcing the job of investing to a financial adviser reduces the impact that these biases can have on building long-term portfolio wealth. We can see this in the higher agreement from advised consumers that a market correction is a good time to buy, which is surely a result of adviser education. As a result of this coaching, 68% of advised consumers agree that their adviser helps them avoid emotional investment decisions and only 7% disagree. Even non-advised consumers, perhaps via mistakes they have made on a self-directed basis, agree that an adviser would reduce this risk.

As we discussed earlier, investors are increasingly looking for personalised digital access to their portfolios via a portal or an app and advisers are aware of the need to face into to this growing demand. We asked advisers what their main strategy is for personalised digital engagement. While 27% of advisers’ firms have built/are building out client portals or apps, 34% are scraping data from CRM systems or platforms to build personalised digital journeys.

Interestingly, 38% proportion of advisers say they have no strategy in place. Given how worried investors get when their portfolio falls in value however (see above), these advisers might argue that they are carefully managing the frequency and presentation of portfolio performance to their clients by placing short term returns in their proper longer-term context.

The surprise abolition of the pensions lifetime allowance limit under the previous government, its rumoured reversal by Labour, and intense speculation over several revenue-raising tax and savings rule changes in the most recent Budget, have all added complexity to financial planning. And, while they have also created higher workloads for advice firms, they have also provided moments for advisers to demonstrate the value of advice.

Nevertheless, the frequency of recent changes by respective governments has crystallised significant support from large majorities of both advisers and consumers on the idea of an independent body taking a longer-term approach to savings and tax policy that is centred around the support of saving and the growth of national retirement readiness.