Chart of the Week: Choose Life

It’s that time of year again when you go out to find the perfect Christmas gift. But the problem is there’s too much choice, which can often result in buying the wrong present (socks again!) – or, worse still, nothing at all.

I recently watched a TED talk on the paradox of choice. In a world where options seem endless, the paradox of choice often leaves us paralysed. This is especially true in investing, where an overwhelming number of products and strategies can deter people from taking the first step. While variety should empower individuals, it can sometimes feel like a burden, leaving them paralysed. This leads many to stick with the perceived safety of cash, rather than navigating the complexities of investment decisions.

Despite these challenges, the UK investor market is thriving. According to a BlackRock/YouGov survey, the number of investors has grown by 21% since 2022, adding over 3.5 million participants and cementing the UK as Europe’s second-largest investor market. As the chart below shows, this growth has been driven by two key demographics: women and younger investors (those aged 25-34). The number of women surged by 32%, significantly outpacing the 14% growth among men, while the 25-34 age group saw a 30% increase in activity.

However, people clearly still see barriers preventing them from investing. A perceived lack of money remains the primary hurdle, cited by 70% of UK non-investors, which is higher than the European average of 65%. Among younger non-investors, 51% cite a lack of knowledge about where to start, what to invest in, or the benefits of investing. Interestingly, they also cite a lack of time. This highlights a significant opportunity for the financial industry to demystify investing and make it more accessible.

While it’s encouraging to see an increase in the number of people investing, there’s still work to do. Educational initiatives, user-friendly platforms and tailored advice could go a long way in empowering more people to invest. In addition, countering the paralysis caused by too many choices, by providing clear, simple guidance might be the key to unlocking even greater participation in the UK investment market. This is why we offer enough multi-asset investment options to help people make the right decision, without overwhelming them with choice.

Key takeaway: we want to do our bit by working in partnership with advisers to simplify investing, enabling people to make financial decisions that help them lead the life they choose.

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This article is provided for general information purposes only and should not be construed as personal financial advice to invest in any fund or product. These are the investment manager’s views at the time of writing and should not be construed as investment advice. The opinions expressed are correct at time of writing and may be subject to change. Capital is at risk. The value and income from investments can go down as well as up and are not guaranteed. An investor may get back significantly less than they invest. Past performance is not a reliable indicator of current or future performance and should not be the sole factor considered when selecting funds.