New research1 from Santander reveals there are 1.8 million SWIFTs (Savers Wanting to Invest for the First Time)2 with £450 million a month in spare cash they are willing to invest, at an average of £247 each. Santander believes these potential investors may be falling down the “advice gap3”, unable to access financial advice or understand the various options available to them and has launched its Digital Investment Adviser (DIA) to help bridge this gap.
The study uncovered the biggest barriers to investing among those with no previous experience are a lack of understanding and a feeling of exclusion. Almost one in five (19 per cent) were put off because they didn’t know how to go about it, while financial jargon discourages 13 per cent from exploring options. Around 12 per cent say they don’t have the money for a financial adviser and around one in six (16 per cent) say they simply can't be bothered to look in to how to do it. Those polled said they would be more likely to keep spare money in a cash savings account, current account, or even under their mattress rather than invest.
Alexia Kilby, Head of Investments at Santander UK said: “Investing today shouldn’t be just for those with thousands to spare – the launch of our Digital Investment Adviser (DIA) is designed for a new type of investor with investment levels set at just £20 a month.
“Our research shows there are lots of people out there who have cash available to invest but are losing out as they just don’t know where to start. DIA’s online tool is carefully designed to walk even the most unsure of investors through a number of questions and activities to deliver easy to understand, regulated investment advice from a trusted high-street name. ”
There is a belief amongst those who haven’t invested before that it is only for high earners. One in eight (12 per cent) think it is only for those with an income over £50,000 a year, one in ten think it is just for those who are experts in finance while others claim it is exclusively for ‘city boys’ or those who know which stocks and shares to pick themselves.
It is not only first-time investors that have spare money they could invest, the Santander figures suggest that those who already have experience of saving or investing could put on average £289 a month into investments, or a cumulative £11 billion.
About the Digital Investment Adviser (DIA)
Santander’s DIA takes around 25 minutes to complete with investments starting at just £20 a month. It guides people through straightforward questions about their current financial position, what they want to achieve and assess the level of risk they are prepared to take with their money. Customers can choose to select specific long-term investment goals, such as paying for a child’s wedding or a property.
Once they complete their advice session, DIA will indicate whether their financial goal is achievable. They then have the option to pay £20 for a personalised report directing them to a recommended Santander Asset Management fund4 they could invest in.
To ensure customers get the best outcome, it will also point to other options if it identifies that investing isn’t currently right for them free of charge. For instance, a customer without any emergency savings may be directed to a savings account while one with outstanding debt would be advised to repay that first.
The information contained in our press releases is intended solely for journalists and should not be used by consumers to make financial decisions.
Notes to Editors
1) Research amongst a representative sample of 2,003 UK adults conducted by Opinium Research, 17th – 20th August 2018.
2) Those who have never had any investments excluding workplace pensions
3) FCA report - Financial Advice Market Review 2016 defined the advice gap as situations in which consumers are unable to get advice and guidance on a need they have at a price they are willing to pay.
4) The four Santander Asset Management funds available have been specifically created to match the profiles and risk attitude score calculated through DIA. The assets in the funds are a mixture of bonds and equities, which are assessed every quarter to ensure they still match the required risk rating:
I. Santander Asset Management Multi Index Fund 1
II. Santander Asset Management Multi Index Fund 2
III. Santander Asset Management Multi Index Fund 3
IV. Santander Asset Management Multi Index Fund 4
Santander has created personas of the type of customer it believes could benefit from using DIA, these can be found in the attached pack, along with screen shots showing the engaging and interactive nature of the DIA.
Santander UK is a financial services provider in the UK that offers a wide range of personal and commercial financial products and services. It has brought real competition to the UK, through its innovative products for retail customers and relationship banking model for UK SMEs. At 30 June 2018, the bank has c24,200 employees. It serves around 15 million active customers, via a nationwide branch network, telephone, mobile and online banking; and 64 regional Corporate Business Centres. Santander UK is subject to the full supervision of the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) in the UK. Santander UK plc customers are protected by the Financial Services Compensation Scheme (FSCS) in the UK.
Banco Santander (SAN SM, STD US, BNC LN) is a leading retail and commercial bank, founded in 1857 and headquartered in Spain. It has a meaningful market share in 10 core markets in Europe and the Americas, and is the largest bank in the euro zone by market capitalization. At the end of June 2018, Banco Santander had EUR 981 billion in customer funds (deposits and mutual funds), 140 million customers, 13,500 branches and 200,000 employees. Banco Santander made attributable profit of EUR 3,752 million in the first half of 2018, an increase of 4% compared to the same period last year.
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