Shift in retail investing trends towards a younger demographic, redefining market patterns due to new research findings

The World Economic Forum, in collaboration with Robinhood Markets Inc and BCG, has released the Global Retail Investor Outlook 2024. The survey, conducted by Dynata in September 2024, gathered insights from 13,000 respondents aged 18 and above across 13 countries: Australia, Brazil, China, France, Germany, India, Ireland, Japan, Singapore, South Africa, United Arab Emirates, United Kingdom, and the United States.

The survey aimed to examine investor and non-investor preferences, behaviors, and needs. One of the key findings is a sustained shift towards younger retail investors. By the time they enter the workforce, 86% of Gen Z have learned about personal investing, compared to 47% of Baby Boomers.

Investors under 44 who hold cryptocurrencies are increasingly allocating a significant portion of their portfolios to digital assets. Over half of these investors have allocated at least a third of their portfolio to cryptocurrencies. Interestingly, retail investors increasingly view cryptocurrency as more understandable and easier to understand than traditional investments like ETFs, mutual funds, bonds, and stocks.

The survey also found that 30% of Gen Z start investing in early adulthood, compared to 9% of Gen X and 6% of Baby Boomers. The biggest barriers for non-investors were lack of funds and fear of financial loss. However, 48% of individuals from emerging markets across all ages would allow an AI assistant to manage their investments. This openness to technology was also reflected in younger generations, with 41% of Gen Z and Millennials expressing a willingness to let an AI assistant manage their investments.

Innovative financial advisory tools, such as AI-enabled products, could fill gaps where traditional financial advisory may be too expensive or out of reach. Developing financial products and platforms that prioritise individual investors is crucial for evolving investor needs.

The findings from the survey suggest that effective policies should empower and protect retail investors. Such policies could include expanding auto-enrolment in pensions, promoting fee-only and conflict-free advisory models, and implementing robust investor protection frameworks. The aim is to help individuals manage risks in alignment with their financial goals while fostering innovation.

In 2024, 51% of investors prioritised emergency savings, up from 41% in 2022. Only 14% of Baby Boomers said the same. This shift towards prioritising savings could indicate a growing awareness of financial security among retail investors.

The Global Retail Investor Outlook 2024 underscores the importance of leveraging technology to enhance affordability and accessibility for retail investors. By making financial advice, portfolio building, and education more accessible, we can empower a new generation of investors to take control of their financial futures.

Shift in retail investing trends towards a younger demographic, redefining market patterns due to new research findings