The OECD study for the AMF, financed by the European Union, reveals a post-pandemic surge in French retail investors, with a significant young demographic drawn to crypto-assets, displaying overconfidence in financial knowledge, and heavily influenced by social media.
The OECD study commissioned by the AMF has uncovered a significant shift in the French investment landscape, revealing that nearly 25% of French citizens are now engaged with financial instruments or crypto-assets. This shift is particularly pronounced among new investors, 12% of the adult population, who began their investment journeys post-pandemic.
Here, a demographic evolution is evident: 64% are men, yet there is an increase in female investors compared to traditional investing circles, and 56% are under 35, contrasting with just 21% in the conventional investor demographic.
These new market participants are situated in affluent spheres and across various social classes, including employees, blue-collar workers, and students, indicating a broader appeal of investment opportunities.
Investment behaviors among these individuals are multifaceted. While three-quarters have diversified their portfolios across multiple products, half have ventured into the volatile realm of crypto-assets, signaling a robust appetite for emerging financial technologies. This is double the proportion of traditional investors holding crypto-assets. Conventional investment vehicles also maintain their allure, with 33% having euro-denominated life insurance policies, 29% contributing to retirement savings plans, and 24% investing in the equities of listed companies.
Their investment horizons are shorter, with two-thirds looking less than a decade ahead. The reasons for investing are diverse, from seeking profitability and diversification to satisfying curiosity or enjoying investing. The prevalence of gambling among these new investors, at 89%, hints at a willingness to embrace risk, though this couples with an interest in sustainable investment options, particularly among the youngest age group.
There’s a notable pivot towards modern platforms regarding sourcing information for investment decisions. Young adults, especially, are turning to social media and influencers, with 41% of the 18–24 age bracket relying on these channels. Nonetheless, a minority of 7% leap into investments without prior research or advice, a trend more common among less affluent backgrounds.
Despite the reliance on less traditional sources of information, these investors have a palpable overconfidence in financial knowledge. A substantial majority of young investors believe they possess a high level of financial understanding, yet their actual ability, as tested on basic economic principles, only sometimes matches this self-assessment.
From this data, the OECD has distilled four investor profiles:
Neophytes: These are typically new investors who are enthusiastic but need more foundational knowledge. They may engage with investment out of a trend or a fundamental desire to grow their savings without a deep understanding of the financial instruments they are using.
Uninformed: Investors in this group may make decisions with minimal research, often influenced by social media or peer recommendations. They may not consult traditional financial advice or deeply analyze their investment choices.
Dynamic: This profile describes investors actively seeking new investment opportunities, including crypto-assets and stocks. They are willing to take risks for potential high returns and are often motivated by the social and experiential aspects of investing.
Conscientious: These investors are more deliberate, seeking to balance risk with sustainable and long-term gains. They are more likely to engage with various information sources and may better understand financial concepts.
The elucidation of these profiles is crucial for AMF’s future educational initiatives. It offers a blueprint for developing targeted strategies that cater to each investor type’s specific needs and knowledge gaps. As articulated by AMF Chair Marie-Anne Barbat-Layani, this tailored approach is integral to the AMF’s mission of investor protection, ensuring that educational resources are informative and resonate with the diverse experiences and expectations of France’s new retail investors.
