Around two-thirds of young investors believe it is sensible to adopt a low-risk approach, but over h...
Around two-thirds of young investors believe it is sensible to adopt a low-risk approach, but over half make financial decisions based on advice from friends.
Research commissioned by Cavendish Asset Management suggests 52% of people under the age of 30 take investment recommendations and advice from their friends, and only 37% check their performance when the statement arrives.
Most worryingly, almost thwo-thirds of the under-30s questioned place their investment directly in equities, yet 82% of those people have portfolios of less than £10,000.
Cavendish points out that this is in stark contrast to other investors, which sees 53% of the population taking advice from an IFA and 39% base their decisions on the personal finance pages of newspapers.
Primary investment aim among all investors is to achieve financial security (43%), however, of the investors under 30, 19% invest primarily to finance a major one-off expenditure such as buying a house, a wedding or a holiday of a lifetime, and 7% invest so they can take a career break.
It is noticeable that there is no mention of investing for retirement among the under 30s, but half investors in their 50s, with half of these again seeking to save for retirement (33%).
Paul Mumford, senior fund manager at Cavendish Asset Management, comments:
"Although younger investors are less sceptical of the markets and seem more interested, I would warn them that, perhaps they should look at additional methods of market analysis and not just rely on advice from their friends. Although 66 per cent of under 30 year olds agreed that having a low-risk investment portfolio is essential, basing investment decisions on advice from friends is a potentially risky strategy.
Apart from anything, I would imagine a seriously failed investment could put any friendship under enormous strain. And there is also a challenge in restoring investor confidence - particularly among the older age groups."
Feasibility study due
'Let’s be bold enough to demand change'
Joint life second death option added to relieve tax burden on couples gifting assets
Backed by Schroders, LGIM and the IA
New system for funds without without three-year track record