Investors are shunning advisors and looking to buy investment products on the internet, survey reveals

News - Living

Written by Ray Clancy

Tuesday, 26 January 2010 09:20

Two thirds of people are investing their money without seeking financial advice because they feel let down by advisors, according to research by a financial services provider.

Just 36% of people sought advice before making a decision about where to invest their money, the survey by investment, savings and pensions services firm Fair Investment Company reveals.

‘This research simply backs up the general feeling amongst private investors. Many feel let down by advisers who have not provided an adequate service and are starting to take matters into their own hands,’ said head of investment and pension research George Ladds.

More are also looking to buy investment products on the internet. Online shopping now represents 15% of all sales, up from 2% in 2002 as people realise they can get a much bigger choice via the internet.

‘With so many investment and savings products available online it is now so much easier for people to do their own research and then make an informed decision about their own assets. They can cut out the middle man, and often get a much better deal than they would on the high street,’ explained Ladds.

The survey shows that despite recent market volatility, investors are not scared to move away from cash investment products. Just over half, 51%, still have the greatest exposure in cash, but it seems this may soon no longer be the case, with most investors looking to diversify their assets further. Some 37% said that going forward they were most likely to invest in structured products, with 22% saying they would look at cash investments.

‘With the interest rate right down at just half a per cent, savings rates are simply not producing the returns people are looking for. Even when they opt for tax free options the returns are often still very poor. So people are considering other options,’ added Ladds.

Some 35% said the current low interest rate environment has made them review their investments in search for higher returns, with 51% saying returns are the most important investment element, compared to just 34% which state safety as more important.

‘Our clients are realising that they are going to have to start taking some risks and move their money away from safer cash investments in order to start getting better returns. People’s perception of investment is changing. Low savings rates and a lack of choice on the high street combined with the fact that there are services like ours available means that people are starting to realise that they don’t have to seek advice to make good investment choices,’ concluded Ladds.