One-quarter of the Dutch population does not invest, even though they have sufficient financial resources to do so.[1] This group of potential investors is young, highly educated, and often owns their own home. The profile of this group matches that of people who already invest, but they have less financial knowledge. One in three expects to start investing in the future. Those who already invest do so primarily in stocks (53%), mutual funds (40%), ETFs (24%), bonds (18%), real estate (18%), and derivatives (6%). These percentages are virtually unchanged compared to the survey conducted two years ago.
Uncertainty and recognition as barriers
What is holding this group back for now is primarily the perception of risk, a strong need for security, and a lack of knowledge. A lack of money clearly plays a lesser role. Saving is associated with safety, while investing is primarily associated with risk. They are also deterred by the way investing is communicated. Four out of five potential investors are turned off by the sheer volume of information and by the mandatory official warning that investing involves risks. Women are more likely than men to be deterred by this.
Barriers can be lowered
According to DUFAS, the results show that the barrier to entry for investing can be significantly lowered. Potential investors most often cite tax benefits and tax simplicity as incentives. Moreover, more than two-thirds of respondents see advantages in the Swedish model. In Sweden, the government encourages residents to invest through tax-friendly and accessible investment accounts, which has led many people to start investing. In addition, non-investors want more certainty about choosing an appropriate level of risk and the ability to get started easily with small amounts.
Jeroen van Wijngaarden, managing director of DUFAS: “Providers of investment products can use this study as an opportunity to communicate more clearly and, together with the government, invest even more in building financial literacy among young people and adults. The government can use it to critically review the amount of mandatory information and warnings associated with investing. This presents a shared mission toward Dutch citizens who are capable of taking steps to improve their financial security but have not yet dared to do so.”
[1] A safe savings buffer is defined as: more than 10,000 euros in savings, or a barely sufficient buffer with at least 101 euros of monthly financial leeway (study, p. 8)
