The regulator conducted a study to learn about retail investor behavior.
Twenty-two percent of investors made their decisions based on promotions and endorsements.
The Cyprus Securities and Exchange Commission (CySEC) published the results of a survey that established the behavior of retail investors. It provided a clearer picture of the decision-making process of retail investors. Additionally, it highlighted the challenges regulators are facing in protecting investors.
CySEC Studies the Behavior of Retail Investors
The survey focused its questions on the investors’ decision to invest in a product and how they researched the product and the investment platform.
For the survey, the regulator questioned people who invested in varying frequencies. Among all respondents, 25 percent traded financial products every month, whereas 19 percent invested in these products within 4 to 6 months and another 17 percent took the plunge on a weekly basis.
The study found that about 22 percent of retail investors made their investment decision based on digital promotions and celebrity endorsements, whereas 42 researched the products and another 37 percent depended on recommendations from friends and family. Only 31 percent of the investors sought advice from financial experts.
In contrast, 48 percent of French and 34 percent of British and German investors sought advice from financial experts. However, in the UK, 24 percent of retail investors decided on product promotions compared to 14 percent in both France and Germany.
Blind Trust in Finfluencers?
Further, 31 percent of respondents to the CySEC survey make financial investments based on the advice of a financial influencer on ducts. With platforms such as TikTok, YouTube, Instagram, and Twitter. In France, such decisions go as high as 42 percent, while only 24 percent of Germans rely on fin-influencers and 34 percent in the United Kingdom.
“Social media now has a direct influence on investment decisions, but not all the information can be trusted,” a CySEC spokesperson said.
“Too many investors including young people are taking real risks with their money because they are taking advice and recommendations from unreliable sources, ranging from family members and friends to celebrity endorsements on social media platforms, without properly checking out the entity they’re buying from.”
Moreover, the survey concluded that only 25 percent of the investors in Cyprus spent 6-7 days researching a particular product, whereas 7 percent did it for less than 30 minutes. Moreover, 26 percent of Cypriot investors had invested more than they could afford to lose. Also, more than 34 percent of the respondents showed buyer’s remorse, meaning they regretted their investment.
The Cypriot regulator highlighted that financial market supervisors should “play a much greater role to enhance their ability to protect investors.”
“The patterns identified by our survey were identified across a range of countries and investor groups, demonstrating an opportunity for national authorities to work together to raise awareness of the tools available to investors and to signpost information that will help them make informed decisions,” the spokesperson added.
The Cyprus Securities and Exchange Commission (CySEC) published the results of a survey that established the behavior of retail investors. It provided a clearer picture of the decision-making process of retail investors. Additionally, it highlighted the challenges regulators are facing in protecting investors.
CySEC Studies the Behavior of Retail Investors
The survey focused its questions on the investors’ decision to invest in a product and how they researched the product and the investment platform.
For the survey, the regulator questioned people who invested in varying frequencies. Among all respondents, 25 percent traded financial products every month, whereas 19 percent invested in these products within 4 to 6 months and another 17 percent took the plunge on a weekly basis.
The study found that about 22 percent of retail investors made their investment decision based on digital promotions and celebrity endorsements, whereas 42 researched the products and another 37 percent depended on recommendations from friends and family. Only 31 percent of the investors sought advice from financial experts.
In contrast, 48 percent of French and 34 percent of British and German investors sought advice from financial experts. However, in the UK, 24 percent of retail investors decided on product promotions compared to 14 percent in both France and Germany.
Blind Trust in Finfluencers?
Further, 31 percent of respondents to the CySEC survey make financial investments based on the advice of a financial influencer on ducts. With platforms such as TikTok, YouTube, Instagram, and Twitter. In France, such decisions go as high as 42 percent, while only 24 percent of Germans rely on fin-influencers and 34 percent in the United Kingdom.
“Social media now has a direct influence on investment decisions, but not all the information can be trusted,” a CySEC spokesperson said.
“Too many investors including young people are taking real risks with their money because they are taking advice and recommendations from unreliable sources, ranging from family members and friends to celebrity endorsements on social media platforms, without properly checking out the entity they’re buying from.”
Moreover, the survey concluded that only 25 percent of the investors in Cyprus spent 6-7 days researching a particular product, whereas 7 percent did it for less than 30 minutes. Moreover, 26 percent of Cypriot investors had invested more than they could afford to lose. Also, more than 34 percent of the respondents showed buyer’s remorse, meaning they regretted their investment.
The Cypriot regulator highlighted that financial market supervisors should “play a much greater role to enhance their ability to protect investors.”
“The patterns identified by our survey were identified across a range of countries and investor groups, demonstrating an opportunity for national authorities to work together to raise awareness of the tools available to investors and to signpost information that will help them make informed decisions,” the spokesperson added.
Arnab is an electronics engineer-turned-financial editor. He entered the industry covering the cryptocurrency market for Finance Magnates and later expanded his reach to forex as well. He is passionate about the changing regulatory landscape on financial markets and keenly follows the disruptions in the industry with new-age technologies.
Vantage Addresses Consob's Blocking Order in Italy
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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