French online investing market has contracted by -17% in the last 12 months, signifying a return to pre-pandemic levels
Uncertain market conditions, rising cost of living and high cash rate pose a challenging feat for online platforms
Brokers collectively leverage innovation to captivate investors and enhance customer satisfaction
Next generation of online investors increasingly turn to social media for insight into investment decisions
7th November 2023, London – Leading research firm Investment Trends released its latest 2023 France Online Investing Report.
The 12th edition of the France Online Investing Report is the most extensive study of retail online investors in France. Examining the complete spectrum of DIY investing activity from long-term investors (buy & hold) to those trading a few times a year, on to frequent traders, this year’s edition highlights:
The total number of French active online investors has contracted in the last 12-months by -17% (360,000 in 2023 from 430,000 in 2022). According to the research undertaken by Investment Trends, the decline can primarily be attributed to reduced inflows of new and reactivated investors, compounded by elevated dormancy rates. In a positive turn, retail participation in cash equities has rebounded to pre-pandemic levels, however the landscape of today’s online investors differs significantly from 2018.
“Our research revealed that today’s online investors are now twice as likely to use ETFs, then back in 2018 (55% in 2023, up from 23% in 2018). And on that, the typical profile of online investors has also changed – where they are now a little younger and more likely to place trades with a smartphone,” said Lorenzo Vignati, Associate Research Director at Investment Trends.
In a rapidly changing financial landscape, cost-conscious investors are paying close attention to their broker’s offerings. The research revealed that 41% of French online investors are now prioritising lower commissions, followed by 33% seeking brokers who provide access to specific markets – demonstrating a shift towards tailored investment strategies. Looking at this group, they have also stated that access to a higher rate of interest on their savings (13% in 2023, up from 1% in 2022) would be an enticing factor to making a switch.
In a positive turn, one in seven (14%) of online investors report noticing a recent innovation from their main online broker that they found useful. This appears to be resonating with investors as overall client satisfaction across the industry has increased – with 80% of online investors rating their main broker as ‘very good’ or ‘good’.
“It’s noteworthy to mention the uplift in the overall satisfaction is consistent with better ratings in a range of areas – including commissions, education material, fee transparency and the mobile app (all up by 3% in composite satisfaction score in the in the last 12-months). This underscores the need for platforms to prioritise what consumers value most, and the method in which they deliver it,” added Vignati.
Taking a closer look at the next generation of online investors (Zoomers & Millennials), research shows that this group are increasingly turning to social media to inform their investment decisions. Amongst the platforms, YouTube (66%), followed by X (previously Twitter) (57%), where the most used social channels consumers used to follow investment-related content.
"We observed that online investors who rely on social media for their investment decisions tend to be the youngest and have, on average, smaller portfolios (average age of 41 and an investment portfolio size of €85k). Here arises a unique opportunity for platforms to embark on a transformative journey with these investors. A segment representing the next generation in the financial world, and by catering to their evolving needs, platform providers can shape a more inclusive and dynamic investment landscape," Vignati concluded.
About the report
The Investment Trends 2023 France Online Investing Report provides a detailed analysis of the French online investing market, examining the attitudes, needs and product usage of active online investors. Based on a survey of 9,342 investors and traders conducted from May to June 2023.