Heading into a year of uncertainty, here at Pretty Pragmatic we were interested in what the country was thinking regarding where they would invest their money during 2017.
So in January, we commissioned our own research via Usurv to people in the UK who were in the £40k+ earning threshold.
The big headline finding?
61% are more likely to invest in stocks and shares than property over the coming year.
The research intended to discover the investment intentions of 200 high earners. A snapshot of respondents’ existing investments showed that stocks and shares and UK property each represented 16% of the average portfolio.
When asked how they would invest during 2017, 32% said it was ‘likely’ or ‘definite’ that they would invest in stocks and shares; the figure was only 17% for UK property.
Long term gain was the top priority for respondents, with 54% citing it as their reason for investing. 17% said their main motivation was the prospect of high returns. Surprisingly, only 11% said that ease of access and liquidity was important to them during a time of such flux.
Meanwhile, the opportunity to win over customers is definitely present in the market, as over half of respondents said they could save and invest more than they currently do.
Most respondents (65%) manage and keep track of their investments independently with the help of technology.
However, personal advice is highly valued when it comes to deciding where to make investments. People tend to turn to independent financial advisors (44%) or friends and family (also 44%) for advice.
Financial publications are considered an important resource for 41%, but only 6% use social media to help guide their investments.
These findings indicate that there could be a significant shift in the way people structure investments during 2017. There is a window of opportunity for IFAs to engage investors as they take their first steps into trading or look to increase the percentage of their portfolio that is invested in the stock market.
Meanwhile, this is also a great chance to become the platform of choice to manage these investments via technology and self-service tools.
One driver of this change could be the Brexit vote. The uncertainty we’re facing over the coming months and years may be prompting people to look to the long term, which naturally results in a heavier emphasis on shares.
The ambiguous property market situation could also be a factor. People want to spread their risk and they are also put off by the stamp duty on second properties.
As we see 2017 unfold, the opportunity to win over investors only seems to be growing, as interest rates stay low, and these high earners look to put their money into areas where they are willing to play the long game.