Only 20% of Italy’s investors ready to take extra risks, BlackRock finds
Almost half of Italians are dissatisfied with their financial well-being but only one in five are willing to take on higher risks to achieve better returns, BlackRock’s Investor Horizons survey on 2,066 individuals in Italy has found.
Italians continue to feel pessimistic about the economic outlook, eurocrisis and potential tax increases, and as a result are hoarding cash rather than investing for the long term.
The global financial crisis has been a financial and psychological blow to investors, with 75% of Italians pessimistic about the economic outlook for the next six months, and 62% describing themselves as risk averse and unwilling to take any risks with their money.
On the same line, less than one third believe the stock market offers attractive investment opportunities.
Over half of Italians are saving in cash or in a deposit account. Of the main reasons driving them to hold cash, 46% said they were putting the money aside for an emergency with 37% want instant access to savings, BlackRock found.
Meanwhile, people are adopting a wait and see attitude and are unwilling to take any action.
“One in five said that they are actively making changes to their investments. Living within budget (97%) and preserving current wealth (93%) are people’s top financial priorities,” the asset manager said.
The survey found that 76% of Italian people are interested in increasing their level of financial knowledge, and that the more financially savvy people are, the better they feel about their financial wellbeing.
Financial wellbeing is higher amongst those with high financial knowledge (83%), compared to those with low levels of financial knowledge (66%).
The research also showed a clear divide between peoples’ hopes and the reality for retirement in this new world of investing.
There is a strong feeling in Italy that the State, rather than the individual, is responsible for planning retirement for its people (41% compared to a 32% European average), with almost one in five expecting to rely on the State pension and over 50% currently taking no action to plan for retirement themselves.
People listed retirement (30%), growing and preserving wealth (35% and 31%) and drawing an income (34%) as the key reasons to see a financial adviser.
Italians trust their spouse or partner (32%) for financial advice, and 52% are using the internet to increase knowledge. However less than 1 in 5 (15%) are currently relying on a financial adviser for advice.
“Over half Italian investors are in cash, but many do not understand how inflation can erode savings, or the necessity of saving early and often. It is important that the industry pulls together and encourages people to look beyond cash, learn to understand risk once again, and look at new ways of investing,” said Bruno Rovelli, head of investments advisory for Italy.