There are too many obstacles to the investing decision. The barriers to investing differ depending on investor profile. Investors expect simplicity, personal contact, and tailored services.
Nearly one in five (18%) Swiss residents aged 25 to 65 has never invested yet. Apart from a lack of knowledge, other criteria including gender or generation can be decisive for a person’s relationship to investing money. This emerges from a survey of 383 potential private investors in the German and the French-speaking parts of Switzerland conducted on 21 June 2021 by Alpian, a fintech start-up.
Lack of knowledge is the first barrier to investment
Among the identified barriers to investing, lack of knowledge, of concern for 40% of respondents, was mentioned most frequently. The percentage is even higher – more than one in two respondents (53%) – if one considers only inexperienced investors or those who have never invested yet. Too little time to properly manage investments (33%) came second and explains in part the lack of knowledge cited by some respondents. The complexity of investment processes (32%) and distrust in banks (31%) were also cited as major deterrents by more than one third of respondents.
Barriers differ depending on investor profile
Gender and generation are also decisive in determing a person’s relationship to investing. For example, 25% of female respondents say they have never invested, despite the many reasons for women to invest and build up assets. That number is only 15% for men. Moreover, over half of female respondents (54%) cite lack of knowledge as the main obstacle when it comes to investing, compared to only 32% of men, who cite time (37%) as the biggest obstacle.
Trust in banks varies depending on age group
Age is also a significant differentiating factor. While 38% of Millennials (25- to 34-year-olds) named a lack of trust in banks as one major concern they were struggling with when it comes to investing, for the older generation (ages 35 to 54), this was not so much of an issue – only 27% cite lack of trust as a major obstacle.
In addition to simplicity, investors seek alignment with social and environmental concerns
Apart from the lack of financial knowledge, the desire for more simplicity and proximity to current social and environmental issues is very clear among respondents. Nearly two out of three respondents (60%) say that investing would become more important to them if it were easier and more accessible. Moreover, nearly a third cited a lack of clarity about what they are investing in (28%) and the absence of simple platforms for investing in sustainability and impact (29%) as key barriers to investing. This reflects the growing importance of engagement in the investment process. This trend goes hand in hand with the desire for more customised services from banks, with 38% of respondents wanting an experienced financial advisor at their side.
The survey shows that investors want more than a purely transactional relationship with their financial service provider. They are looking for a true partner to help tham align their investments with their convictions and engagement.
