The French online investment landscape has experienced a significant contraction, shrinking 17% over the past year, as revealed in the latest report by Investment Trends. This decline, marking a return to pre-pandemic activity levels, is attributed to a decrease in new and reactivated retail traders alongside increased dormancy rates.

The Changing Face of Online Investing in France

Investment Trends' “2023 France Online Investing Report”, now in its 12th edition, offers a comprehensive analysis of the nation's retail online investors. It indicates a notable shift in the demographic and behavior of French online investors, who are now younger and more inclined to trade via smartphones.

The numbers presented in the report are clear: the base of active investors in France has shrunk over the last 12 months from 430,000 reported a year earlier to 360,000.

The downward trend has been observed since 2022, during which only the United Arab Emirates reported an upward dynamic of active traders.

Encouraging women to invest could be a solution to the problem of the declining number of traders. A report prepared in March by the financial commission Autorité des Marchés Financiers (AMF) showed that an increasing number of French women would like to trade. However, often, the fear of discrimination and promotional materials typically aimed at men discourage them from taking the first step.

Traders Want Lower Commissions

The report also sheds light on the evolving preferences of investors, with a significant number (41%) prioritizing lower commissions and access to specific markets (33%). Here again, it is worth referring to the latest AMF report, which showed that retail investors additionally want an improvement in the transparency of fee structures of investment firms, as these are often unclear.

Interestingly, 13% of investors are now enticed by higher interest rates on savings, a substantial increase from the previous year.

Moreover, the industry has seen a rise in client satisfaction, with 80% of online investors expressing approval of their main brokers.

“It’s noteworthy to mention the uplift in the overall satisfaction is consistent with better ratings in a range of areas,” Lorenzo Vignati, the Associate Research Director at Investment Trends, commented. “This underscores the need for platforms to prioritize what consumers value most, and the method in which they deliver it.”

ETFs and Mobile Trading on the Rise

Vignati also highlighted the doubled usage of ETFs by today's investors compared to 2018 and the shift towards mobile trading. The research underscored the critical role of broker offerings in attracting cost-conscious investors. A noteworthy 14% of online investors acknowledged recent useful innovations by their brokers, correlating with increased satisfaction rates across various service aspects, including fees and mobile app functionality.

“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),” Vignati added. “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.”

The report further delved into the investment habits of younger generations, revealing a growing reliance on social media for investment insights. YouTube and X (formerly Twitter) are the leading platforms for investment-related content. This is confirmed by data from an earlier Investment Trends report on the American market, where similar conclusions were drawn.

This trend presents an opportunity for investment platforms to engage with the next wave of investors, who are typically younger with smaller portfolios, and to foster a more inclusive investment environment.

The twelfth “France Online Investing Report” was based on a survey of 9,342 online investors and provided insight into the wealth management and online investing industry.