Retirement and saving for a large purchase, such as house or car, are the top priorities for Indian retail investors, shows a survey conducted by CFA Institute.
The survey covered 3,127 retail investors and 829 institutional investors worldwide, including 100 retail investors and 84 institutional investors from India.
While 22% retail investors invest their money to save for their retirement, 20% invest to make large purchase such as buying a house or car. Similarly, 16% of retail investors want to save to pursue their entrepreneurial dreams.
However, retail investors in India lag behind the global average of 56%. Almost six out of ten people in most of the developed nations save for their retirement. “Retail investors in more developed markets are focused on reaching retirement, while in other markets, investors are investing to consume or to maintain financial security. It is important that the advisor defines investment success in the same way the client does,” the report said.
“Retail investor fears are also related to their goals; thus, many have concerns about retirement-related issues, either a financial crisis that reduces the value of their retirement portfolio, or living past their wealth,” the survey report added.
Retail investors’ goals
|
Goals |
% |
|
Retirement |
22 |
|
Large purchase such as buying a house or car |
20 |
|
Saving to start a business |
16 |
|
Estate planning |
14 |
|
Education savings |
12 |
|
Emergency fund |
10 |
The report recommended advisors to focus on personalised goals to grow business. “By understanding client goals better, advisory firms have an opportunity to provide increased customisation and personalisation of products and services. This is in demand: the majority of retail investors responded they are interested in more personalised products and of these, a majority would be willing to pay more for them. This is consistent with the parallel worlds scenario of future state of the investment profession, in which investment firms can provide greater value through customisation,” the report adds.
The report says that while 63% of retail investors are interested in goal based products, they are willing to pay more for such products.
