Research from SyndicateRoom, the equity crowdfunding investor platform, finds that equity investment needs to be simplified to attract individuals. The survey found that Britain is a nation of savers and investors, with over half of respondents saying that if they were given GBP10,000, they would either save it or invest it.
Some 22 per cent of respondents said they would spend the money and 17 per cent said they would use the money to pay off debt. While the average UK adult now has around GBP173,000 in personal assets, the majority of those who could be motivated to invest in equities have been put off because they cannot find a simple and easy way to do so.
The survey found that everyday investors are attracted to public markets, but awareness is low. More than half (53 per cent) believe their net worth would increase if they invested in equities. Furthermore, 40 per cent said that they would have invested in some IPOs had they known about them. In addition, SyndicateRoom has identified that 15 per cent of the UK population has never invested in an IPO but have the ability and desire to do so. With three-quarters of individuals surveyed believing that they are better off looking after their own personal finances, rather than using a financial advisor or wealth manager, the public equity markets are missing out on a vital source of retail investment demand.
The survey also found that the technology sector is the industry of choice for retail investment. The firm writes that the results revealed a strong appetite to invest in technology, with this being the preferred sector for 46 per cent of those looking to invest in companies. Crowdfunding has also been spotlighted as supporting growth businesses, with 75 per cent stating that crowdfunding has democratised the way people invest in businesses.
Younger investors are more willing to take greater investment risk, the survey found, with millennials seeing higher-return investment as a means to affording a deposit for a first home. Over a third of millennials (aged 18-30) are focussed on buying a first home, as a priority for their personal finances, though only 20 per cent of those are on track to achieving that goal. That seems to be the driving factor behind a greater appetite for riskier investments among younger generations. 50 per cent of respondents aged 18-30 said that they were willing to take high risks with their investments, compared to those over the age of 50 with half the risk appetite and only 25 per cent of respondents willing to take high risks.
Another finding revealed that older investors are most likely to be self-taught at financial know-how. Individuals over the age of 50 are most influenced by the financial press for their investment decisions. By comparison, only a sixth (17 per cent) of potential investors under the age of 30 read financial press, and are three times as likely to source their financial information from friends and family (45 per cent) showing a desire to learn more about the public markets and an active discourse among younger generations. 28 per cent of respondents claim they don’t source any financial investment information.
Stay-at-home millennials are adversely affecting their parent’s financial position, the survey found. The mean age at which children will be financially independent and not living at their parents’ home is aged 27 years, and only a quarter (27 per cent) of parents with children living at home are on track with their financial priorities.
Women, in general, face greater obstacles to investment according to the research. While almost two thirds (63 per cent) of men believe they determine the investment decisions that affect their future, around one in five (19 per cent) women say they have no input at all to such investment decisions. That is despite a higher level of education among women surveyed, compared with men. With total assets worth an average of GBP68,000 less than men, a lack of opportunities to invest seems to be the key reason why almost a quarter of women (23 per cent compared with 17 per cent of men) feel they are way off track when it comes to their financial goals and priorities.
The launch of the report, entitled Bridging the Equity Divide coincides with SyndicateRoom’s plans to announce its fundraise. It previously raised GBP1.2million, via its own crowdfunding platform in May 2015 in just 33 hours, spreading the number of owner-advocates of the business. The funding round launched today is expected to raise GBP2.3million.
Goncalo de Vasconcelos, CEO and Co-Founder of SyndicateRoom says, “The results of this survey support what we’ve long suspected - that there is a strong and healthy appetite for equity investment in the UK. Many factors have contributed to this, from social change to economic pressures. However, while the desire from consumers is evident, so are the barriers. It’s clear that the public’s money isn’t working as hard as it should be. So it’s crucial that as an industry we support investors to ensure simple, transparent and easy access for all.”
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