- Retirement savings focus increases: Influx of new online investors focused on retirement savings is a positive sign for the industry, despite a slight decline in online investor numbers due to high cash rates.
- Robinhood intensifies competition: Robinhood’s entry into the UK market, with a proposition similar to Trading 212, promises to shake up the industry and drive competition and innovation.
- Multicultural investor opportunities: The diverse preferences and higher trading activity of the 29% of UK online investors with an overseas background present an untapped opportunity.
Leading financial services research firm Investment Trends has released its 2024 UK Online Investing Report, providing an in-depth analysis of the UK online investing market. The report examines consumer attitudes, needs, and product usage.
The report shows the UK online investing landscape is undergoing a transformation as new-to-market investors increasingly turn to online platforms to manage their retirement savings, highlighting a shift in the primary motivation for starting to invest online.
Despite this positive shift, there has been a slight decline in participation among online investors, primarily due to high cash rates impacting equities investing. Dormancy rates have reached a five-year high as some investors grapple with the challenges posed by the current financial landscape.
“The influx of new online investors focused on retirement savings is a positive sign suggesting a long-term commitment to financial planning, despite the short-term challenges posed by high cash rates,” said Lorenzo Vignati, Associate Research Director, Investment Trends. “By addressing the needs of retirement-focused investors, brokers have an opportunity to foster a more resilient and engaged client base to reinvigorate the current market,” added Vignati.
The report highlights that the UK online investing market is set for an exciting shake-up with the recent entry of well-known US-based broker Robinhood. This mirrors the rapid
growth experienced by Trading 212, a platform that has gained considerable traction over the past two years. Both platforms offer zero-commission trading and innovative features aimed at making investing more accessible to the public.
“Robinhood’s entry into the UK market is a game-changer,” remarked Vignati. “Known for its commission-free trading model and user-friendly interface, Robinhood’s presence is expected to drive significant innovation and enhance competition, pushing existing brokers to elevate their platforms and services, ultimately benefiting investors.”
The report also shows that 29% of online investors in the UK identify with an overseas background, with the most prominent groups being European, Indian, and Chinese. Both Indian and Chinese investors tend to place larger-than-average trades, while investors with African, Southeast Asian, or Indian heritage trade more frequently than the typical UK online investor, exhibiting distinct preferences for investment products such as cryptocurrencies and international shares.
Copyright 2024: Investment Trends. 2024 UK Online Investing Report
Vignati said, “The diverse preferences and higher trading activity of UK online investors with an overseas background present an untapped opportunity. Brokers who address their unique and evolving needs through tailored services and marketing strategies will best serve this group and expand market reach.”
