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The annual suvey carried out by Fidelity on the confidence of European and French investors, was conducted with almost 1200 Europeans in 14 countries[[About the survey – Methodology
Population sample : 12057 interview in 14 countries of which:
– 10 countries each each had 1000 interviews (Germany, Austria, Belgium, Spain, Italy,
Holland, Poland, United Kingdom, Switzerland)
– 4 countries each had 500 (Denmark, Finland, Norway Sweden)
Target : Population representative of active people over the age of 18, having or having had saving products
Quotas on the sex, age, profession and the country.
Time Period of poll From 12 July to 1 August 2011
Method of data collection Online
]]
The bank remains the preferred partner for European investors.
In 2011, the banks were the leading partners of European savers for the purchase of
financial products and services. In a context in which priority is given to the “known”, the
“simple” and the “reassuring”, the importance of this applies as much to the products and
financial investments as it does for the partners themselves. Among the attributes of
stability and loyalty, a long term relationship is the primary reason quoted (by the 37% of
those who say they have reasons for their loyalty), followed closely by the quality of advice
(35%). Whilst the poll reveals that the 68% of Europeans who subscribed to financial
products during the last 12 months, did so via a bank, in France that percentage is clearly
more since the investors are 78% more likely to prefer using a bank as their intermediary.
Compared with 2010, the European average is down by 6 points (68% against 78%) whilst
the French remain at the same level (78%)
It is interesting to note that in 7 out of 14 countries, it is the independent advisor which is the second most popular intermediary after the banks, with insurance companies following.
As for the more autonomous investors, they make up 15% who prefer to use internet brokers.
…but this relationship of trust does have some failings
Despite the crisis, the above- mentioned poll of 2010 reveals a continued global
confidence : 78% of Europeans declared that they had confidence in their financial
advisor. Yet, the confidence that European savers have in their financial intermediaries in
2011 has been rocked globally, with nearly a third (31%) saying that they had less
confidence in their financial intermediary since the 2008 crisis – 33% from France. Apart
from Poland, all the countries, showed a decline in confidence ( on average 11 points
difference with those who said they had more confidence)
More than the quality of advice, which the savers realise is difficult to give in such times,
the aspects about which savers are the most critical, are the lack of responsiveness (first
criteria at 25%) and secondly, the lack of communication between them and their banking
intermediaries. (second criteria at 22%).
In general, the distributor seems less influential in purchasing decisions. 45% of
Europeans however think that their bank or insurer does influence their choices ; this
figure rises to 53% in France. Lagging far behind are the independent financial advisors
(16%), suppliers’ internet sites (12%) and finally family and friends (8%).
A reassuring finding, however, is that 47% of Europeans and 48% of the French, state that
they have good reasons to remain with their financial intermediaries and no reason to
change. And even out of the 43% which, on the other hand, may have reasons to change,
only 10% (and 14% in France) of them have more reasons to leave their intermediary than
not to. It is therefore, mainly the increased fees (41% in Europe and 37% in France) and
the level of advice (30%) which stand out as the main reasons.
According to Christophe Gloser, the head of Fidelity in France, “If the results are not
surprising in the context of the crisis, they do show some weakening in the fundamental
relationship of trust with European savers. A detailed understanding of the expectations
which savers have, must form the basis of any new relational contract set up with the
savers. The Fidelity poll on investor confidence allows us to weigh up these expectations
of their financial partners, the degree to which promises and discussions on transparency
are translated into concrete acts, as well as interaction with the clients. According to this
poll, it seems to me that European savers are expecting a more frank and mature
relationship and this also applies to, not only the developers of financial products and
financial solutions, such as Fidelity, but also to the distributors, such as the banks, and
Asset management advisors.”
Personalised explanations and transparency on the costs involved are the core of
restoring confidence.
Financial intermediaries are at the forefront of the expectations of the savers who demand
clear information, good quality advice and transparency of costs involved at each stage of
their mutual relationship. They also want their intermediaries to listen to any of their
questions.
The quality of the information obtained is perceived as excellent or good for 64% of
Europeans and 66% of the French. A quarter (26% of Europeans and 22% of the French)
however, consider the information as mediocre, even poor, to a certain degree. As far as
the understanding of investments goes, the main aspects quoted by the Europeans
concern investment horizons (30%), the concept of liquidity of the product (27%) and
finally, the level of risk (26%). As for the French they specifically mention, as a priority, the
possibility of recovering their costs without penalties (26%), followed by tax advantages
(22%), and finally, equality between the level of risk and expected performances (20%).
Those who say they do not understand, highlight the difficulty in comparing information
(26%) and the use of technical vocabulary (18%).
As far as advice goes, 7 out of 10 savers say they are generally satisfied with the quality of
advice and 10% are completely satisfied. In France, the situation is slightly less, with 6
savers out of 10 generally satisfied and 7%, fully satisfied..A more alarming fact is that
there is 1 out of 5 Europeans who feels that his advisor puts his own interests ahead of his
client’s. The costs are the highest in Italy and France with 32% and 31% respectively
questioning the integrity of their advisors.
In the context of weak performance and high volatility, the costs often determine the
discussions. Costs are at the heart of the savers’ demand for transparency. Although, for
37% of respondents, transparency of costs is a pivotal criteria, the majority (72%) want to
know more about costs.
However a significant number of investors (56%) still don’t want to hear about invoicing
consultancy fees – a little practiced custom. The percentage of respondents who say this in
France reaches 76%. The main reason for this, according to the 59% of European savers
and 71% of French savers, is that they feel that their advisor already receives a salary
from the society employing him. The 44% who do not mind the fees, do so on condition
that the advice is personalised and transparency of costs exists.
Christophe Gloser, Head of Fidelity in France, indicates: “this survey shows that,
despite some weaknesses, Europeans still have confidence in their financial partners. As
for the manifestation of this confidence – there is no confidence – the cursor moves in the
opposite direction. Certainly, some of the aspects taken in context explain this situation – in
particular, the 2008 crisis which still lives on in people’s minds, as well as the present
crisis which is also casting a shadow over the outlook for European investors and their
wealth.
It is imperative to restore confidence It is the only way to allow investors to get back on
track with investing in order to, on one side prepare for their future and meet the
challenges of retirement and dependence and on the other hand to encourage long-term
saving which the economy needs for growth. Here at Fidelity, we work daily side by side
with the distributors of financial products to assist them in their efforts to better understand
the needs of individuals , the way the financial markets function and to find appropriate
financial solutions. We believe now, more than ever before, in the return to fundamentals
and basic rules of investment for savers”
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