Investors turning to professional advice and retreating from ‘finfluencers’

• Almost nine in ten (87%) UK retail investors believe they lack sufficient levels of financial knowledge to better manage their portfolios, according to recent research by Charles Schwab
• 81% of UK retail investors believe it is increasingly important to seek expert advice on their investment strategies; 58% are consulting professional financial advisers (up 7% YOY) and 52% are referring to financial press (up 7% YOY) to make investment decisions
• Celebrity and social media-based finance specialists are declining as a source of influence on investments, particularly amongst younger generations

Almost six in 10 (58%) UK retail investors consult financial advisers and professional fund managers on their investment decisions, whilst 52% refer to investment-related financial press before making changes to their portfolios, according to the latest Investment Forces research from Charles Schwab UK. Increased engagement with professional advice has grown in tandem with retail investors taking an increasingly active approach to investing.

Against a backdrop of macroeconomic and market uncertainty, four in five (80%) UK retail investors increasingly believe it is important to manage their own investments directly in order to react to, and make the most of, fast market movements. However, almost nine in 10 (87%) investors believe they lack sufficient levels of financial knowledge to manage their portfolios effectively in the current environment.

Consequently, retail investors are moving away from previously popular sources of investing advice such as ‘Finfluencers’ – celebrities and social media-based finance specialists – and towards more traditional channels such as financial advisers and investment publications. The most significant shift has taken place amongst Gen X and Millennial investors, who have historically showed more appetite in taking investment advice from ‘Finfluencers’.

Since the end of 2021, the influence of social media influencers who specialise in finance has dropped by 13% (from 50% to 37%) amongst Gen Z and by 10% amongst Millennials (from 52% to 42%). A similar trend is visible with celebrities who discuss their investments; their influence has decreased by 19% (from 51% to 32%) amongst Millennials, and by 10% (from 45% to 35%) amongst Gen Z in the same time period. Instead, the vast majority (81%) of investors across all generations now believe it is crucial to seek expert advice on their investment strategies.

Richard Flynn, UK Managing Director at Charles Schwab, said: “The current macroeconomic climate continues to shape the attitudes and behaviours of retail investors in the UK. Since we began this study at the end of 2021, domestic and international markets have experienced varying levels of volatility and uncertainty. It is therefore reassuring to see a rising – and notable – number of investors proactively seeking professional advice in order to make the most of their investments.”

Charles Schwab’s investment platform provides investors with access to a wide range of global investment products such as equities, exchange-traded funds (ETFs), bonds and options.  In relation to the US market specifically, UK investors can purchase US-listed equities with $0 commission for online trades, no service fees, and a $0 minimum to open an account.

About the Survey  

Charles Schwab conducted an online survey to understand the attitudes and behaviours of UK investors in the context of current conditions affecting financial markets. Respondents were aged 18 or over and held at least one type of investment (based on a list of different asset classes, vehicles and other investment instruments). 

Survey responses were collected and analysed from 1,000 UK respondents. The survey captured a natural spread of demographics across age, region, gender, working status, income and total value of savings and investments.  Research completed in February 2024.