Irish households are not realising the full benefit of investment options

• Ireland has among the lowest levels in the EU of direct retail participation in capital markets, with people tending to prefer to hold their wealth in property, life assurance and pensions
• Ireland does not yet have all the key factors to success in place to support retail investment
  

The Central Bank of Ireland has today (1 December) published consumer research and analysis of retail investment in Ireland.

Comparing data on the financial assets of Irish households against other EU countries, Ireland has among the lowest levels of direct participation in capital markets through listed equity, debt securities and investment funds; with Irish people tending to a greater extent to hold their wealth and savings in property, life assurance and pensions.

The research finds that wealthier households are responsible for the vast majority of direct and indirect participation in capital markets. Retail investors in Ireland are more likely to have a higher level of educational attainment, be in employment, have higher income levels, be male, be aged between 35 and 54 and live in the greater Dublin area.

The report finds that the decision to invest is driven by a complex interplay of factors and that individuals are motivated to start investing by practical and aspirational financial goals. Key barriers to investment identified in the report include a perceived lack of financial resources, psychological barriers such as fear and lack of trust, lack of knowledge and understanding about investment and lack of support and advice.

The report also points to measures to tackle these barriers and improve retail investment. These include product options and financial education measures.

Some 10% of people report owning crypto-assets, predominately young males. The amounts tend to be small (€2,266 average) and mostly for reasons other than providing for their financial future (e.g. 56% cite curiosity as their reason).

Deputy Governor Colm Kincaid said: “A properly functioning financial market must reflect and serve the needs and preferences of all consumers and investors. This research provides a comprehensive society-wide insight into those needs and preferences which can inform public policy at an important juncture, as we look to improve access to capital markets for retail investors.

In particular the research shows that, as things stand, financial services is not effective in reaching the full population of potential investors. This means Irish households may not be getting the full benefit of what financial services could do to help them provide for their future.”

ENDS