CREALOGIX Study: Majority of UK Savers Unaware of Opportunities to Access New Generation of Digital Investment Products

20 September 2018

The arrival of new app-based investment services with low minimum investment requirements has opened up a wealth of choice for savers, but many UK consumers are unaware of the new options open to them.

A study from CREALOGIX, the provider of digital banking solutions, has found that only a fifth of UK consumers are aware that wealth management services can be accessed with as little as a £1 investment. Alongside this, almost half of consumers have not made any investment of £100 or more in the last decade. This is despite the fact that the average British consumer tries to put away £171 into savings each month, and regular savers have an average cash balance of £4,212.40 [SWNS / Independent, 20 March 2018]. In an era of very low interest rates this highlights the potential for the mass market of savers to discover easy-access investment opportunities that could perform much better.

Once only accessible by investors considered “high net worth individuals”, sophisticated investment management is now available through a growing selection of digitally accessible services. Automation and innovation in self-service digital portals and apps are set to change the traditional wealth management market by lowering the barrier to entry and thus dramatically widening the potential consumer market. Consumers in the UK now have more choice than ever before when it comes to finding ways to grow their money, and wealth management firms are in a strong position to attract huge numbers of new investors. Nevertheless, both consumers and the established wealth management firms have been slow to grasp the opportunity.

The independent study of 1,200 UK consumers commissioned by CREALOGIX revealed that those with £100,000 to invest would likely to turn to their family (35%), their partner (32%), or their existing retail bank (29%) for advice before they would seek out a dedicated wealth manager (19%). Negative views of the financial industry post 2008 may play a part: the survey revealed 19% view traditional City of London wealth managers as “elitist” and 18% regard them as “old-fashioned”. Respondents associated professional wealth management service with in-person services: 40% said they would choose a wealth manager based on access to face-to-face time with an advisor. This is despite the fact that many of established wealth management firms now offer self-service and digital channels, while a growing range of fintech investment services aim to eliminate the need for human advice altogether.

Jo Howes, Commercial Director at CREALOGIX UK said: “Many consumers still hold a negative perception of the wealth management industry as behind the times. Investment services are often seen as intimidating and associated with expensive, opaque fees. In fact, wealth management services are now becoming more accessible and flexible than ever, thanks to new digital offerings which democratise access to a wide choice of high quality investments. These are available even for people with small amounts to invest. Instead of viewing wealth management purely as a face-to-face service for the wealthy, greater numbers of ordinary consumers are going to start taking advantage of new digital services, which are well designed to address modern user requirements of transparency and 24/7 access.”

Asked what criteria would be important in choosing wealth management services, 22% of consumers cited ease of access to their investments, while almost a fifth (19%) cited aspects of mobile app design, app-delivered advice, and app-based features.

New digital services from wealth management firms aim to balance the scalability and automation of digital self-service portals with the high quality investment options and active portfolio management previously available only from an expert (human) relationship manager. Some 47% of UK consumers are either very receptive or somewhat receptive to the idea of receiving robo-advisory type investment services online and via mobile apps. This matches a picture of increasing digital self service across UK consumers’ financial lives, as 61% are managing most of their bills online, 52% are managing savings and a quarter are managing mortgages and property-related payments digitally.

Anton Zdziebczok, Head of Product Strategy at CREALOGIX UK commented: “Lack of financial resources is no longer a barrier to accessing wealth management: as technology is developing so fast, the barrier is simply a lack of awareness of the many options now on offer. Wealth management firms addressing this awareness question have an opportunity to access a fast-growing market. In addition to bringing on board thousands of new investors, established wealth managers can use digital innovations such as robo-advisory services to foster stronger relationships with existing customers. We expect to see choice – and hence competition – increase rapidly in the next two to three years. Firms that have a roadmap in place to deliver new and improved digital investment services stand to gain from this technology-fuelled democratisation of wealth management.”

The independent study was undertaken by Censuswide between 26th–29th July 2018. It interviewed 1,200 consumers aged 16 and above.

For more information, visit https://crealogix.com/uk/products/crealogix-invest/

Contact
BrightBee, Dan Brown, Press Relations
I would be pleased to arrange an interview with the management of CREALOGIX for you. Please call me on +44 (0)208 819 3170 or send an e-mail to: crealogix@brightbee.co.uk

The economic projections and predictions contained in this information relate to future facts. Such projections and predictions are subject to risks, uncertainties and changes which cannot be foreseen and which are beyond the control of CREALOGIX Holding AG. CREALOGIX Holding AG is therefore not in a position to make any representations as to the accuracy of economic projections and predictions or their impact on the financial situation of CREALOGIX Holding AG or the market in the securities of CREALOGIX Holding AG.
 

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development