A study of 2,000 adults has found that seven in 10 Brits are deterred from investing money due to the complexity of financial terminology. However, the study also revealed that many individuals have a better understanding of investment terms than they realize.
Participants were quizzed on the meanings of key investment terms such as ‘dividend,’ ‘FTSE 100,’ and ‘equity,’ and on average, they provided correct answers over 70 percent of the time. The research, conducted by investment firm eToro, also showed that four in five individuals correctly identified Bitcoin as a form of digital currency, demonstrating their knowledge of more technical terms.
Iqbal V. Gandham, UK managing director of eToro, emphasized that investing is not limited to the super-rich or individuals in the financial industry. He highlighted that people often feel initially discouraged by the complicated terminology used in the investment sector, but the study demonstrates that many individuals possess a good understanding of investment concepts. Gandham compared this to learning anything new, noting that with time and confidence, people can grasp the terms involved.
The study also revealed other reasons why individuals are put off from investing, including the perception that it is overly complex or suitable only for those working in financial services. Additionally, more than a quarter of respondents believed that investing is exclusively for bankers or the super-rich, while one in four felt that they did not dress smartly enough to fit the typical investor profile. However, one-third of participants expressed willingness to invest if they had the assistance of an expert.
Gandham emphasized that investments don’t have to be large sums of money and can be equivalent to everyday expenses like a cinema trip or a takeaway. He highlighted the abundance of free resources available on the internet, making it easier than ever to fill knowledge gaps. Gandham stressed that investing is no longer restricted to the upper echelons of society and shared eToro’s mission to encourage more people in Britain to invest. He noted the importance of the industry effectively communicating how individuals can access the market, either through self-directed investing or by copying others using social investing.